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Windstream CEO Tony Thomas’ Pay Increased in 2017; Reverse Stock Split Recommended

3 min read

Windstream Holdings Inc. President and CEO Tony Thomas’ total compensation increased by $1 million to $5.4 million in 2017 from $4.4 million in 2016, according to the publicly traded telecommunications company’s preliminary annual proxy statement.

The proxy also asks shareholders to approve a reverse stock split, which which would collapse five shares of stock into a single share. (Windstream stock was trading at $1.52 late Wednesday morning.) The total number of shares of common and preferred stock that Windstream could issue would also drop, from 375 million and 33 million to 75 million and 6.7 million respectively.

Thomas’ salary of $1 million did not change in 2017, but Thomas earned more in stock awards, more in non-equity incentive plan compensation, more for a change in pension value and nonqualified deferred compensation earnings and more in other compensation.

His stock awards were worth $3.1 million in 2017 compared to $2.2 million in 2016, and he earned $1.2 million in non-equity incentive plan compensation, compared to $1.1 million in 2016. 

Thomas’ total compensation also included $22,270, up from $14,423 in 2016, for a change in pension value and nonqualified deferred compensation earnings; and $85,659 in other compensation, up from $81,718 in 2016.

CFO and Treasurer Bob Gunderman’s total compensation increased in 2017, by $409,492 to $2 million. His total compensation included his $475,000 salary and stock awards of $1.1 million. His salary went up by $25,000 from 2016, and he earned $323,579 more in stock awards.

John Fletcher, former chief human resources and legal officer, received total compensation of $2 million, down from $2.1 million in 2016. His 2017 compensation included his $515,000 salary, unchanged from the year before, and stock awards of $1 million, down from $1.2 million in 2016. Fletcher resigned earlier this year. 

Sarah Day, former president of consumer and small- and medium-sized business, earned $1.1 million in 2017, up $303,277 from the year before despite resigning in May. Her total compensation included her $147,692 salary, down $150,923 from the year before, and $459,984 in stock awards, up $179,986 from 2016.

Layne Levine, president of enterprise and wholesale, earned $2.7 million in 2017. His total compensation included his $187,500 salary, a $1 million bonus and $1.5 million in stock awards.

Jeff Small, president of consumer and SMB, earned $1.1 million in 2017. His total compensation included his $325,577 salary, a $186,667 million bonus, $262,846 in stock awards and $312,985 in non-equity incentive plan compensation. 

Levine and Small appeared on the company’s list of highest-paid executives for the first time because Windstream announced in April 2017 that it was adopting a new business unit structure that includes combining its operations into two units: Cloud & Connectivity and Consumer & SMB. 

Levine and Small were tapped to lead the new units.

Controller John Eichler and J. David Works Jr. dropped off the list of named executive officers for 2017. Eichler is still employed by Windstream as controller, but Works left the company in 2016. 

The company plans to hold its 2018 annual meeting via webcast at 10 a.m. May 21. In addition to the reverse stock split, shareholders will consider proposals to:

  • Re-elect nine directors to the company’s board. Last year, Windstream had 12 directors, but its board decided in February 2018 to return to a smaller, nine-member board. The move reduced expenses associated with board activities and simplified its overall structure. As a result, Carol Armitage, Larry Laque and Marc Stoll will not run for re-election at the annual meeting and their service as directors will end as of the meeting.
  • Ratify the appointment of PricewaterhouseCoopers LLP as Windstream’s independent registered public accountant for 2018.
  • Approve an amendment to the Windstream 2006 Equity Incentive Plan to increase the number of shares of Windstream common stock available for issuance under the plan by 9.6 million shares, or by 1.9 million post-reverse stock split shares if the preceding proposal is approved. 
  • Approve an amendment to extend the term of the Windstream’s Rights Plan designed to protect the substantial tax benefits of Windstream’s net operating loss (NOL) carryforwards.
  • Approve amendments to the Certificate of Incorporation and Bylaws of Windstream to enable stockholders to call special meetings of stockholders under certain circumstances.
  • Approve amendments to the Certificate of Incorporation and Bylaws of Windstream to eliminate super-majority voting provisions.
  • Approve a shareholder proposal to enable shareholder action by written consent.
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