Windstream 2015 Annual Report Download - page 35

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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 (generally
held in February), 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 Board approves or, in the case of our CEO’s compensation, ratifies the actions
of the Compensation Committee.
Stockholder Outreach. Windstream takes into account issues raised and information shared by stockholders
regarding its compensation practices during outreach meetings. In 2015, Windstream met with stockholders
representingapproximately22%ofouroutstandingsharestoensurethatweunderstand,andtotheextentpossible,
address any concerns raised concerning executive compensation. Our 2016 compensation program is, in part, based
on our stockholders’ feedback during the past two years regarding their preferences for different performance metrics
for short-term and long-term incentive compensation plans.
Elements of 2015 Compensation
For 2015, the compensation of Windstream’s NEOs 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 NEOs also includes the Windstream 2007 Deferred Compensation Plan, the
Windstream 401(k) Plan, change-in-control agreements, and limited perquisites.