Windstream 2014 Annual Report Download - page 30

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2014 Executive Compensation
The Compensation Committee believes that the 2014 actual pay results are aligned with the Company’s actual
2014 performance results and support the view that the executive compensation program creates a strong linkage
between pay and performance. Windstream’s financial and operating performance fell short of expectations during
2014, and this performance resulted in a significant reduction in executive compensation payouts compared to
the target opportunities available to our executives. The compensation payouts to Mr. Thomas illustrate the high
correlation between executive compensation payouts and performance. A significant portion of Mr. Thomas’s total
compensation in 2014 was in the form of at-risk compensation, and Mr. Thomas achieved only 37% of his total
compensation as reported in the Summary Compensation Table due to the following payouts under our at-risk
compensation plans:
 100% of his performance-based equity awards that were scheduled to vest in 2015 based on 2014
performance, representing $576,000 in value based on December 31, 2014 trading prices, lapsed and were
forfeited due to the failure to achieve threshold performance objectives.
 72% of his target annual incentive awards were not earned due to failure to achieve target performance
objectives.
To illustrate the design of our at-risk compensation framework, the following chart compares the actual
compensation amounts paid to each NEO currently employed by Windstream during, and following completion of,
2014 (referred to in the table below as “Total Realized Compensation”) to his total compensation as reported in the
Summary Compensation Table. The table is intended to supplement the Summary Compensation Table, which, as
required by the SEC rules, provides the grant date fair value of all equity awards granted during 2014.
NEO
Total Compensation
as Reported ($)
At-Risk
Compensation
Total Realized
Compensation ($) (1)
Total Realized
Compensation
as a % of Total
Compensation as
Reported
Anthony W. Thomas 3,367,476 78% 1,247,283 37%
Robert E. Gunderman 1,166,469 59% 517,478 44%
John P. Fletcher 2,053,026 76% 1,109,602 54%
J. David Works, Jr. 1,407,321 71% 970,672 69%
John C. Eichler 621,663 57% 444,377 71%
(1) Total Realized Compensation for each NEO includes (i) all compensation reported in the Summary
Compensation Table except amounts reported in the “Stock Awards” column and (ii) the value realized upon
vesting of time-based equity awards following completion of 2014.
In addition, in 2014 the Windstream Board and Mr. Gardner, who had served as Windstream’s CEO since its
formation in 2006, each determined a change in perspective was needed in order to accelerate the pace of change
within the company and to more effectively respond to the rapidly evolving needs of our customers. As a result,
effective December 11, 2014, Mr. Gardner resigned as Chief Executive Officer, and Mr. Thomas was appointed Chief
Executive Officer. The Board believes that Mr. Thomas is the right executive to lead Windstream and position the
Company for long-term success.
Say on Pay. As required by section 14A of the Exchange Act, stockholders at the 2015 Annual Meeting will
be asked again to approve, on an advisory basis, the compensation of our named executive officers. Stockholder
advisory votes on executive compensation are currently solicited on an annual basis. The following is a summary of
key considerations that stockholders should take into account when assessing our executive compensation program:
 Our goal is to improve our customer experience; operate a best-in-class network; and deliver improved
financial performance and increased value for stockholders. Our path for creating value for stockholders
is to grow revenue and adjusted Operating Income before Depreciation and Amortization (OIBDA), with
prudent capital investments.