Windstream 2013 Annual Report Download - page 53

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PROPOSAL NO. 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
At the Annual Meeting the Board of Directors is providing stockholders of Windstream the opportunity to vote
on the following advisory (non-binding) resolution:
“Resolved, that the compensation paid to Windstream’s named executive officers, as disclosed in
this Proxy Statement, including the Compensation Discussion and Analysis, compensation tables
and narrative discussion, is hereby APPROVED.”
As described in the Compensation Discussion and Analysis, our executive compensation philosophy, policies,
and practices are designed to:
• Provide a high correlation between pay and performance;
• Align management’s interests with the long-term interests of Windstream’s stockholders; and
• Provide competitive compensation and incentives to attract and retain key executives.
Our core program consists of base salary, annual cash incentives and long-term equity incentives.
The following is a summary of key considerations that stockholders should take into account when assessing
our executive compensation program:
• Windstream’s vision is to become the premier enterprise communications and services provider in the
United States while maintaining our strong, stable consumer business. Our goal is to generate solid and
sustainable cash flow over time, and we return a significant portion of this cash flow to our stockholders
through our current dividend practice.
• We believe that Adjusted Operating Income Before Depreciation and Amortization (Adjusted OIBDA) is
the key measure of profitability that ensures our ability to generate solid and sustainable cash flow over
the long-term, which is why we include Adjusted OIBDA as a key performance objective for our short-
term and long-term incentive plans.
• Our 2013 compensation reflected our mixed operating results by paying short-term incentive payouts
below target. Our stock price decline also impacted 2013 compensation by providing a lower value to
executives upon vesting of their equity awards compared to their grant value. In addition, because our
executives are required to own a significant amount of company stock, the value of our executive’s total
stock holdings declined during the year.
The Board of Directors values and encourages constructive dialogue on compensation and other important
governance topics with Windstream’s stockholders, to whom it is ultimately accountable. The Board of Directors
requests stockholder approval of Windstream’s overall executive compensation philosophy, policies and practices.
Although your vote is advisory and will not be binding upon Windstream or the Board of Directors, nor will it create
or imply any change in the fiduciary duties of Windstream or the Board of Directors, the Compensation Committee
will take into account the outcome of the vote when considering future executive compensation decisions.
The Company’s current policy is to provide stockholders with an opportunity to approve the compensation of
the named executive officers each year at the annual meeting of stockholders. It is expected that the next such vote
will occur at the 2015 annual meeting of stockholders.
Board Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE
“FOR” APPROVAL OF PROPOSAL NO. 2.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED “FOR” PROPOSAL NO. 2
UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.