Cincinnati Bell 2013 Annual Report Download - page 45

The Company also provides certain retirement benefits and post-termination compensation to the NEOs, as
described in more detail later in this CD&A.
Compensation Practices
The Company reviews and modifies its executive compensation program and practices regularly to address
changes in the Company’s short- and long-term business objectives and strategies, new regulatory standards and
to implement evolving best practices. Listed below are compensation practices that the Company has adopted in
support of its pay-for-performance philosophy:
•Performance-based Compensation. The Company believes that a significant percentage of each NEO’s
total compensation should be performance-based or “at-risk.” Base salary was 37.5% of the Chief
Executive Officer’s 2013 target compensation and 41% of the other NEOs’ 2013 target compensation.
Performance-
Based Stock
Options/SARs
12.5%
Long-Term
Performance-
Based Awards
12.5%
Annual
Performance-
Based Cash
Incentive
37.5%
Base Salary
37.5%
Chief Executive Officer*
Performance-
Based Stock
Options/SARs
6%
Long-Term
Performance-
Based Awards
20%
Annual
Performance-
Based Cash
Incentive
33%
Base Salary
41%
Other NEOs*
* In 2013, the Company granted Mr. Torbeck restricted shares with a grant date value of $900,000 that vest
over a three-year period. This was the final installment of awards made in consideration of the
compensation he forfeited when he left his previous employer to accept employment with the Company and
is not included in the above chart. Consequently, Mr. Torbeck did not receive any additional long term
incentive grants during 2012 or 2011. The percentages for the other NEOs reflect the fact that Messrs.
Heimbach, Fox and Duckworth were not executive officers at the beginning of the year.
•Stock Ownership Guidelines. The Company believes that equity ownership creates alignment between
executive and shareholder interests. In support of this objective, we maintain stock ownership guidelines
under which our NEOs are expected to accumulate specified ownership stakes over time.
•Compensation Risk Assessment. The Company conducts annual compensation risk assessments to ensure that
our policies and programs do not unintentionally encourage inappropriate behaviors or lead to excessive risk
taking. We have concluded that our compensation plans, policies and practices do not encourage excessive or
unnecessary risk-taking and are not reasonably likely to have a material adverse effect on the Company.
•Repricing Prohibition. We maintain prohibitions against the repricing of underwater stock options.
Effective January 28, 2014, the Company amended its existing policy to expand the definition of a
repricing to include cash buyouts of underwater stock options and stock appreciation rights. This change
applies to all grants, including existing grants.
•Double-Trigger Equity Vesting. Existing employment agreements with executives incorporate a “double-
trigger” requirement for vesting equity grants in the event of a change in control (“CIC”). Effective
January 28, 2014, the Company amended the 2007 Long Term Incentive Plan and revised award
agreements for all future grants, beginning with the 2014 equity grants, to provide that in the event of a
CIC, an employee must be involuntarily terminated without cause by the Company during the 24-month
period following a CIC for equity grants to vest.
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Proxy Statement