Windstream Compensation: Down For Jeff Gardner, Up For Other Execs

Total compensation for Windstream Holdings Inc. CEO Jeffrey Gardner was down by almost $1 million in 2013 compared to 2012, but other named executive officers saw their compensation increase.

With a base salary of $1 million, stock awards of $5 million, almost $1 million in incentives and other compensation of $90,840, Gardner made just above $7 million in 2013.

The numbers were released in Windstream's proxy statement, filed Friday with the U.S. Securities & Exchange Commission.

In 2012, Gardner made almost $8 million. The changes came mostly from about $200,000 less in stock awards and $245,000 less in incentives. Gardner's base salary in 2012 was $998,000.

Salary and stock awards for the other executives went up, while incentives went down. CFO Tony Thomas received $2.12 million; COO Brent Whittington, $2.77 million; and EVP, General Counsel and Secretary John Fletcher, $2.11 million.

J. David Works, EVP and chief human resources officer, became a named executive officer in 2013. He realized $1.29 million.

According to the proxy, the dips in incentive pay had to do with dips in Windstream's revenue between 2012 and 2013. Windstream's revenue in 2013 was $5.99 billion, down 2 percent from 2012.

Severance Pay

Also noted in the proxy was example severance payouts for the company's executives in case Windstream were to be acquired. The payments were calculated using Dec. 31 as the example time period.

Gardner, for example, would receive $7 million in cash, a $1.35 million bonus, $56,122 cash equivalent for health care premiums, $50,000 in outplacement services and $7 million in accelerated vesting of restricted shares for a total of $15.5 million.

Notably, one proposal for the company's annual meeting of shareholders suggests limiting the amount of restricted shares that executives could receive if the company is acquired.

"We are unpersuaded by the argument that executives somehow 'deserve' to receive unvested awards," the proposal states. "To accelerate the vesting of unearned equity on the theory that an executive was denied the opportunity to earn those shares seems inconsistent with a 'pay for performance' philosophy worthy of the name."

Windstream's board opposes the proposal, citing the "substantial amount of merger and acquisition activity" that occurs in the company's sector, among other reasons.

Beneficial Owners and Annual Meeting

The proxy also included a list of all persons or corporations in possession of 5 percent or more of Windstream's common stock. The two named, both considered to be beneficial owners, were:

  • Blackrock Inc. of NewYork, 33.7 million shares, or 5.7 percent.
  • The Vanguard Group Inc. of Malvern, Pa., 40.5 million shares or 6.8 percent.

The company (NYSE: WIN) announced its annual shareholders' meeting will take place at 11 a.m., May 7, at the Capital Hotel in Little Rock.

Nine items were listed for consideration at the meeting:

  • Electing nine directors.
  • Vote on an advisory (non-binding) resolution for executive compensation.
  • Approve an amendment to Windstream's equity incentive plan to increase authorized shares by 15 million and re-approve the plan's performance goals.
  • Approve an amendment to Windstream's certificate of incorporation to eliminate certain voting provisions.
  • Approve amendments to Windstream's bylaws to allow stockholders to call special meetings under certain circumstances.
  • Approve amendments to Windstream's bylaws to eliminate super-majority voting provisions.
  • Ratify appointment of PricewaterhouseCoopers LLP as the company's independent registered public accountant.
  • Consider two stockholder proposals, including the one regarding severance compensation for Windstream executives.
  • Transact other business if needed.