US Cellular 2008 Annual Report Download - page 39

the amendment or termination of U.S. Cellular’s existing stock option or other long-term compensation or
incentive plans.
Under its charter, the Stock Option Compensation Committee may delegate its power and authority
to the Chairman of U.S. Cellular or any executive officer of U.S. Cellular or as otherwise permitted by any
applicable long-term incentive plan, except that the Stock Option Compensation Committee may not
delegate its power and authority with respect to the long-term compensation of executive officers of
U.S. Cellular who are subject to the requirements of Section 16 of the Securities Exchange Act of 1934,
as amended, or as otherwise provided in any applicable long-term incentive plan. The Stock Option
Compensation Committee has not delegated any authority with respect to the officers identified in the
below Summary Compensation Table. The Stock Option Compensation Committee has delegated
authority to the Chairman or an executive officer of U.S. Cellular only with respect to persons who are
not officers.
As discussed above, the Chairman and Stock Option Compensation Committee may also rely on the
services of U.S. Cellular’s compensation and employee benefits consultant.
Objectives and Reward Structure of U.S. Cellular’s Compensation Programs
The above Overview generally describes the objectives and reward structure of U.S. Cellular’s
compensation programs. This section further discusses, with respect to the officers identified in the
Summary Compensation Table, (1) the objectives of U.S. Cellular’s compensation programs and (2) what
the compensation programs are designed to reward.
The objectives of U.S. Cellular’s compensation programs for executive officers of U.S. Cellular, and
their relationship to the reward structure, generally are to:
• support U.S. Cellular’s overall business strategy and objectives;
• attract and retain high quality management;
• link individual compensation with attainment of individual performance goals and with attainment
of business unit and U.S. Cellular objectives; and
• provide competitive compensation opportunities consistent with the financial performance of
U.S. Cellular.
The primary financial focus of U.S. Cellular is the increase of long-term shareholder value through
growth, measured primarily in such terms as customer additions, customer disconnects, revenues, cash
flow and return on capital. Compensation decisions are made subjectively, considering these
performance measures, as well as all other appropriate facts and circumstances. U.S. Cellular’s
compensation policies for executive officers are designed to reward the achievement of such corporate
performance goals, as discussed below.
U.S. Cellular’s compensation programs are designed to reward for the performance of U.S. Cellular
on both a short-term and long-term basis. With respect to the officers identified in the Summary
Compensation Table, the design of compensation programs and performance rewarded is similar but
with some differences for (1) the President and CEO and (2) the other executive officers.
The non-equity compensation of the President and CEO of U.S. Cellular is approved by the
Chairman, LeRoy T. Carlson, Jr., functioning as the compensation committee. The Chairman evaluates
the performance of the President and CEO of U.S. Cellular in light of the annual and ongoing objectives
for U.S. Cellular and the attainment of those objectives, and sets, or, with respect to equity
compensation, recommends to the Stock Option Compensation Committee, the elements of
compensation for the President and CEO based on such performance evaluation and compensation
principles, as discussed below.
With respect to the officers identified in the Summary Compensation Table other than the President
and CEO, the Chairman reviews the President’s evaluation of the performance of such executive officers
and sets the annual base and bonus compensation levels for such executive officers, and recommends
long-term compensation to the Stock Option Compensation Committee based on such performance
evaluations and compensation principles, as discussed below.
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