Windstream 2015 Annual Report Download - page 8

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individually to obtain his or her assessment of the effectiveness of the Board and its committees. As a result of the
process, SpencerStuart concluded that the Board is functioning well, and in addition, made some suggestions for
improvement, and the Board and management have updated plans and processes consistent with the suggestions.
2015 EXECUTIVE COMPENSATION
Our compensation objectives are to pay for performance, align management’s interests with those of our
stockholders, and attract and retain key executives. Highlights of our compensation practices for our executive
officers include:
What We Do: What We Don’t Do:
üSignificant portion of pay “at risk” × Excessive perquisites or special perquisites for
former executives
üRobust stock ownership requirements
üClawback policy × Excessive severance benefits
üAnti-Pledging and Anti-Hedging Policies × Single-trigger equity acceleration
üIndependent Compensation Consultant ×Excise tax gross ups
× Dividends on unvested performance-based
restricted stock
Overview of 2015
The Board of Directors believes that the 2015 actual pay results are aligned with the Company’s actual 2015
performance results and support the view that the executive compensation program overseen by the Compensation
Committee creates a strong link between pay and performance. Consistent with our historical compensation practices,
our fiscal 2015 executive compensation program, which is discussed in detail in this Proxy Statement under the
section titled “Compensation Discussion and Analysis,” featured the following attributes:
At Risk Compensation A substantial portion of our executive officers’ compensation in 2015 was at-risk through
allocation of short-term cash incentives and long-term equity-based incentives.
Base Salary No increases in base salaries for executive officers in 2015.
Incentive Awards As with previous years, executive officers participated in short- and long-term incentive
programs based principally on Windstream’s achievement of certain Adjusted OIBDA
amounts (OIBDA is operating income before depreciation and amortization). The
Compensation Committee set target amounts for Adjusted OIBDA, and the other
incentive award performance measures, at levels it believed was difficult but achievable
and designed to drive results.
Following the Company’s spin-off of Communications Sales & Leasing, Inc. (“CS&L”)
in April 2015, the Compensation Committee revised the Adjusted OIBDA metric to
Adjusted OIBDAR to retain comparability and consistency with the external financial
presentation of the Company. Adjusted OIBDAR is defined as operating income before
depreciation and amortization before restructuring charges, pension expense, share-
based compensation and the annual rent payment due under the lease with CS&L. All
references in this Proxy Statement to Adjusted OIBDA include Adjusted OIBDAR,
unless otherwise noted.