US Cellular 2008 Annual Report Download - page 45

Annual Cash Compensation
Annually, the Chairman determines the President and CEO’s base salary. With respect to the other
executive officers, the President recommends and the Chairman approves annually each such executive
officer’s base salary based on his evaluation of the performance of U.S. Cellular and each executive
officer. In connection with the foregoing, the President and/or Chairman consider such factors and
circumstances as they may deem relevant, as discussed below.
Significant facts and circumstances that the Chairman considered in approving the annual cash
compensation of all of the named executive officers, and that the President considered in recommending
the annual cash compensation of the named executive officers other than the President, are as follows:
the fact that U.S. Cellular is a public company; the fact that U.S. Cellular is primarily a regional
competitor and that some of its competitors are national or global telecommunications companies that
are much larger than U.S. Cellular, possess greater resources, possess more extensive coverage areas
and more spectrum within some coverage areas, and market other services with their communications
services that U.S. Cellular does not offer; U.S. Cellular’s performance in 2007, as discussed above; the
performance objectives and achievements and the extent to which the officer was considered to have
contributed to such achievements in 2007, as discussed above; the publicly-available benchmark
information of cash compensation of U.S. Cellular’s publicly-held peers and other publicly-held
companies, as discussed above; certain ranges and metrics for the individual officers based on such
benchmarks, as discussed below; and the overall views and feedback of U.S. Cellular personnel. In
addition, the President and/or Chairman considered additional facts and circumstances with respect to
each of the named executive officers as discussed below.
The Chairman uses the above sources and makes a determination of appropriate ranges of base
salary for each named executive officer, based on the recommendations of the President of U.S. Cellular
with respect to all named executive officers other than the President of U.S. Cellular. The base salary of
each executive officer is set at a level considered to be appropriate in the judgment of the Chairman
based on an assessment of the responsibilities and performance of such executive officer, taking into
account the facts and circumstances discussed above. No specific performance measures are
determinative in the base salary compensation decisions of executive officers. Instead, all such facts and
circumstances are taken into consideration by the President and the Chairman in their executive
compensation decisions. Ultimately, it is the informed judgment of the Chairman based on the
recommendation of the President that determines an executive officer’s base salary based on the total
mix of information rather than on any specific measures of performance.
The following discusses annual cash compensation with respect to each of the named executive
officers.
Base Salary
President and CEO. The 2007 base salary of John E. Rooney was $790,000. On February 21, 2008,
the Chairman approved an increase in the base salary of John E. Rooney to $855,000 for 2008,
representing an increase of approximately 8.2%.
The range considered to be appropriate in the judgment of the Chairman in approving John E.
Rooney’s base salary for 2008 as President was approximately $780,000 to $935,000. This range was
based on a survey from U.S. Cellular’s compensation consultant, Towers Perrin, and represented the
50th to 75th percentiles, respectively, of a population of comparable base salaries. The population of
comparable base salaries was comprised one-half of the base salaries of the chief executive officers of
public companies and one-half of the base salaries of the chief executive officers of subsidiaries of
publicly-held companies, similar in size to U.S. Cellular, recognizing the fact that U.S. Cellular is both a
public company as well as a subsidiary of a public company. See ‘‘Benchmarking’’ above. The base
salary approved for Mr. Rooney for 2008 of $855,000 was approximately 110% of the 50th percentile
salary. The salary of the President and CEO is believed to be within the median of the range considered
to be appropriate in the judgment of the Chairman.
38