US Cellular 2008 Annual Report Download - page 44

The overall average percentage achieved with respect to 2007 was calculated to be 87.5%.
Nevertheless, the entire amount of the bonus pool is discretionary and subject to approval by the
Chairman. Pursuant to this discretionary authority, the Chairman adjusted the overall bonus pool to
107.0% of target. This was done because U.S. Cellular had a number of key accomplishments in 2007,
including the year-to-year change in Gross Customer Additions which was favorable compared to
performance by the national carriers.
The achievement levels of objectives and performance measures that are stated in non-quantitative
terms are discussed below under Performance Objectives and Accomplishment.
Performance Objectives and Accomplishments
In addition to Company and/or business unit performance, the Chairman and the President consider
personal objectives and performance. The personal objectives that the President considered in his
evaluation of each of the named executive officers other than the President are almost entirely composed
of team objectives of the management group. There was no minimum level of achievement of any of
those objectives required before salary could be increased. The following identifies the significant
objectives as well as the accomplishment of these objectives in 2007 relating to the bonus earned and
paid in 2008. The Chairman also considered these team objectives and performance in his evaluation of
the President, as discussed below.
• U.S. Cellular did not fully achieve its target for Consolidated Cash Flow. However, the Chairman
considered that the company achieved growth of 18.5% in 2007 over 2006.
• U.S. Cellular over-achieved with respect to its target for Consolidated Revenue.
• U.S. Cellular over-achieved with respect to its target for Postpay Customer Disconnects.
• U.S. Cellular did not fully achieve its target for Return on Capital Percent. However, the Chairman
considered that the company achieved improvement to 7.93% in 2007 from 6.26% in 2006.
• U.S. Cellular did not achieve its target for Gross Customer Addition Equivalents. However, the
Chairman considered that the company achieved growth of 3.1% in 2007 over 2006.
• U.S. Cellular strengthened its competitive positioning in the market with the launch of several new
products and services, the introduction of 21 new handset devices and the completion of almost
300 retail and agent store builds, remodels and redesigns.
• U.S. Cellular improved its network coverage, capacity and performance through the addition of
441 new cell sites, upgrades to all of its switches and other enhancements.
• U.S. Cellular won the J.D. Power and Associates Award for overall call quality among wireless
telephone users in the North Central Region for the fourth consecutive reporting period.
• U.S. Cellular’s retail postpay churn of 1.43%, which was improved from 1.56% in 2006.
• Total service ARPU of $51.13 increased by $3.90 or 8.3% from the 2006 level.
• U.S. Cellular demonstrated progress and improved results in certain of its recently launched
markets.
Each of Steven T. Campbell, Jay M. Ellison, Michael S. Irizarry and Jeffrey J. Childs was considered
to have made a significant contribution to the aforementioned performance achievements and,
accordingly, each such named executive officer was considered to far exceed expectations.
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