Windstream 2014 Annual Report Download - page 34

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Mr. Gardner’s Separation Agreement. At the time of his resignation as President and Chief Executive Officer on
December 11, 2014, the Board and Mr. Gardner agreed that he would remain employed by Windstream in an advisory
capacity and remain on the Board through February 1, 2015 to ensure an orderly leadership transition. During this
advisory period, he continued to receive the same base salary and benefits that were in effect on the date he stepped
down as President and Chief Executive Officer. Mr. Gardner will not participate in Windstream’s annual or long-
term incentive programs for 2015 or to receive additional compensation for his services as a member of the Board of
Directors in 2015. In connection with his departure, Windstream was obligated to pay Mr. Gardner a lump sum of
$3,000,000 as severance benefits pursuant to the terms of his existing employment contract. This severance benefit
equaled three times his annual base salary. In addition, in recognition of Mr. Gardner’s leadership and contributions
in transforming Windstream from a rural wireline telephone business to a FORTUNE 500 company, the Board
elected to vest 250,000 equity awards held by Mr. Gardner. Mr. Gardner’s remaining equity awards for the 2015,
2016 and 2017 performance periods (518,285 in total) were forfeited and cancelled. In exchange for these benefits,
Mr. Gardner executed a waiver and release of all claims in favor of Windstream. Mr. Gardner remains subject to the
confidentiality, non-competition, and non-solicitation provisions contained in his employment agreement for a one
year period and remains subject to Windstream’s clawback policy. The terms of Mr. Gardner’s separation agreement
were determined and recommended to the Board by the Compensation Committee after considering the advice of
Pearl Meyer & Partners, LLC.
Elements of 2014 Compensation
For 2014, the compensation of Windstream’s named executive officers consists of three principal components:
 Base salary;
 Short-term (annual) cash incentive payments; and
 Long-term incentives in the form of equity-based compensation.
The compensation program for the named executive officers also includes the Windstream 2007 Deferred
Compensation Plan, the Windstream 401(k) Plan, change-in-control agreements, and limited perquisites.
Base Salary. Base salary represents a stable means of cash compensation to our executive officers. Our goal
in setting base salary amounts is to provide competitive compensation that reflects the contributions and skill levels
of each executive. However, consistent with our philosophy of tying pay to performance, our executives receive a
relatively small percentage of their overall compensation in the form of base salary.
We generally implement any base pay increases on a calendar year basis, with occasional mid-year increases
to reflect a promotion or additional experience or responsibilities. The table below includes each named executive
officer’s base salary as of December 31, 2014 in comparison to his base salary as of December 31, 2013. Messrs.
Gardner and Whittington are not included in the table below because they are no longer employed by Windstream.
NEO
Base Salary at
December 31, 2013
Base Salary at
December 31, 2014 % Increase
Anthony W. Thomas $500,000 $ 1,000,000 100%
Robert E. Gunderman (1) N/A $ 450,000 N/A
John P. Fletcher $500,000 $ 515,000 3%
J. David Works, Jr. $430,000 $ 465,000 8%
John C. Eichler (1) N/A $ 290,000 N/A
(1) Messrs. Gunderman and Eichler were not named executive officers in 2013, therefore 2013 base salary
information is not presented in this table.
Messrs. Thomas and Gunderman’s current base salaries were established in connection with their promotions
in December 2014. The Compensation Committee determined their current base salaries after considering the advice
and comparative market analyses provided by PM&P and considering the salary they were receiving at the time
of promotion.