Windstream 2014 Annual Report Download - page 32

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Given the limited number of direct industry peers with a similar business model and of comparable size, the
competitive market analysis focuses on compensation survey data from reputable surveys that are size-adjusted
using regression formulas. The 2013 market analysis used compensation surveys from Watson Wyatt, Mercer, and
PM&P, and all data was size-adjusted to reflect annual revenues of $6 billion. In considering the survey data, the
Committee does not request the identity of or review the specific companies that are included in any of the surveys
reference above.
In addition to compensation levels, the Committee often requests that PM&P provide proxy data with respect
to compensation plan designs and company performance. Because these elements are less impacted by company
size, PM&P’s 2013 market analysis included plan design and company performance data from a specific group of
companies which included:
DISH Network Corp. NII Holdings
ADP Western Union
United States Cellular Fidelity Information Services
Time Warner Telecom TDS
Charter Communications Frontier
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The Committee believes that the consideration of plan designs and performance levels among these companies
provides an additional useful reference point for the plan designs and degree of pay and performance alignment at
Windstream. Examples of plan design include the number and weighting of performance metrics and the types of
performance metrics used in incentive plans, the allocation of cash and equity in total direct compensation, and the
allocation of fixed compared to performance-based compensation. This group of companies represents a broad group
of FORTUNE 500 companies in telecom, technology and services industry.
While consideration is given to the competitive market data, the Compensation Committee uses it primarily as
a reference point and does not specifically target compensation to any market percentile. In addition to competitive
market data, the Committee reviews and considers factors such as:
 company performance
 individual executive performance
 the critical nature of an individual’s role to organizational success
 internal pay equity among colleagues
 retention risks
Only after careful consideration of all relevant facts and circumstances does the Committee exercise judgment and
make compensation decisions.
Windstream Management
General. Windstream’s management assists the Compensation Committee’s consultant in its survey of executive
compensation by providing historical compensation information and by reviewing and commenting on preliminary
drafts of the survey reports. At the first Compensation Committee meeting of each year (which is generally held
in February of each year), the Compensation Committee reviews and approves executive compensation for such
year. Based on the compensation surveys and compensation principles previously specified by the Compensation
Committee, our CEO and members of Windstream’s human resources department prepare recommendations for
compensation levels for executive officers in consultation with the Compensation Committee’s consultant, except
that no recommendation is made for our CEO’s compensation. The Compensation Committee then meets to review
and determine our CEO’s compensation and reviews and recommends the compensation for all other executive
officers. The Compensation Committee determines our CEO’s compensation, and recommends the compensation
of all other executive officers, based in part on discussions with Windstream management, including our CEO,
and discussions with the compensation consultant. The Windstream Board approves or, in the case of our CEO’s
compensation, ratifies the actions of the Compensation Committee.