Windstream 2015 Annual Report Download - page 34

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as Chair, Mr. Beall, and Carol Armitage. The Compensation Committee assists the Board in fulfilling its oversight
responsibility related to the compensation programs, plans, and awards for Windstream’s directors and principal
officers. The Compensation Committee annually reviews and approves goals relevant to our CEO’s compensation
and, based on an annual evaluation of these performance goals, determines and approves our CEO’s compensation.
The Committee conducts this review using a survey of compensation data of comparable employers that is prepared
by the Committee’s outside compensation consultant based on criteria specified by the Committee.
Independent Consultant. The Compensation Committee has the authority to retain and terminate any executive
compensation consultant to be used in the evaluation of director, CEO or executive officer compensation and to approve
the consultant’s fees and other retention terms. It is the policy of the Compensation Committee that the compensation
consultant should perform no services for Windstream other than services as consultant to the Compensation
Committee. During 2015, the Compensation Committee engaged Pearl Meyer & Partners, LLC (“PM&P”) to assist
the Committee in the review and design of Windstream’s executive compensation program. PM&P reports directly to
the Compensation Committee. During 2015, PM&P conducted a competitive review of Windstream’s executive pay
levels and executive pay program designs, with such data and information being used by the Committee, along with
all other relevant information, to inform the Committee’s decisions regarding the executive compensation program.
PM&P provided a self-assessment to the Compensation Committee in 2015 relative to the independence standards
required by the stock exchanges. The self-assessment included the following information:
• PM&P performs no other services for Windstream, other than the engagement with the Compensation
Committee;
• FeespaidbyWindstreamtoPM&Parelessthan0.5%ofPM&P’stotalrevenue;
• PM&P has policies and procedures to prevent conflicts of interest;
• The individual advisor to the Compensation Committee does not own any Windstream stock;
• There is no business or personal relationship between the individual advisor and a Committee member;
and
• There is no business or personal relationship between the individual advisor or PM&P and an executive
officer of Windstream.
Competitive Market Analysis. As part of the process of approving executive compensation levels and plan
designs, the Compensation Committee regularly reviews and considers competitive market data. This competitive
market analysis generally takes place in the fall of each year and is used as part of the decision-making process for
the following year. During 2014, PM&P provided, and the Compensation Committee reviewed, competitive market
data as part of its process for approving 2015 executive compensation levels and plan designs.
Given the limited number of direct industry peers with a similar business model and of comparable size, the
competitive market analysis focused on compensation survey data from reputable surveys that are size-adjusted
using regression formulas. The 2014 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 did 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 2014 market analysis included plan design and company performance data from a specific group of
companies which included:
• DISH Network Corp.
• ADP
• United States Cellular
• Time Warner Telecom
• Charter Communications
• CenturyLink
• Level 3
• Western Union
• Fidelity National Information Services, Inc.
• TDS
• Frontier