Windstream 2014 Annual Report Download - page 29

| 25
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis provides information regarding the compensation paid to our
Chief Executive Officer, Chief Financial Officer and certain other current and former executive officers who were
the most highly compensated in fiscal year 2014. These individuals, referred to as “named executive officers” or
“NEOs”, are identified by name in the Summary Compensation Table.
Compensation Philosophy
Windstream’s executive compensation program is designed to achieve the following objectives:
 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.
Below are certain executive compensation practices we employ to further these objectives. Also listed below
are certain compensation practices we do not employ because they are inconsistent with our compensation objectives.
What We Do:
 Equity-Based Compensation – A substantial portion of total NEO compensation is paid in equity-based
compensation in the form of restricted stock and restricted stock units, whose value is directly correlated to
the performance of our stock. This practice achieves a strong alignment between interests of management
and our stockholders.
 At-Risk Compensation – A substantial portion of NEO pay is contingent upon achievement of certain
corporate performance goals.
 Clawback Policy – We maintain a clawback policy that allows us to recover incentive compensation
derived from financial statements that are subsequently subject to restatement and certain other conditions
are satisfied.
 Robust Stock Ownership Guidelines – We have robust stock ownership guidelines that apply to all
executive officers and require that, among other things, our CEO own Windstream stock valued at
10 times his base salary.
 Independent Compensation Consulting Firm – The Compensation Committee benefits from its utilization
of an independent compensation consulting firm which provides no other services to the Company.
 Regular Review of Share Utilization – We evaluate share utilization by reviewing overhang levels (dilutive
impact of equity compensation on our stockholders) and annual run rates (the aggregate shares awarded
as a percentage of total outstanding shares).
What We Don’t Do:
 No Dividends or Dividend Equivalents on Unearned Performance-Based Equity Awards – No dividends
or dividend equivalents are paid on performance-based equity awards unless and until all performance
conditions are met.
 No Single Trigger Change-in-Control Provisions – Our equity awards provide for accelerated vesting of
future awards after a change in control if an employee is also terminated within two years of the change
in control (a double trigger) rather than upon the closing of the transaction itself (single trigger).
 No Hedging Transactions – Our directors and executive officers are prohibited from engaging in any
transaction involving derivative securities intended to hedge the market risk in our stock.
 No Tax Gross-ups – Our compensation programs do not provide for the gross-up or reimbursement of
taxes for executive officers in any situation.
 No Special Perquisites for Former Executives – We do not have perquisites for former and/or retired
executives that differ materially from those available to employees generally.