CenturyLink 2015 Annual Report Download - page 65

adversely affect us. In reaching this determination, we have taken into account the risk exposures of our
operations and the following design elements of our compensation programs and policies:
• our balance of annual and long-term compensation elements at the executive and management levels,
• our use of a diverse mix of performance metrics that create incentives for management to attain goals
well aligned with the shareholders’ interests,
• the multi-year vesting of equity awards, which promotes focus on our long-term performance and
mitigates the risk of undue focus on our short-term results,
• “clawback” policies and award caps that provide safeguards against inappropriate behavior, and
• bonus arrangements that generally permit either the Committee (for compensation payable to senior
officers) or senior management (for compensation payable to other key employees) to exercise
“negative discretion” to reduce the amount of certain incentive awards.
We believe these features, as well as the stock ownership requirements for our executive officers, result in a
compensation program that aligns our executives’ interests with those of our shareholders and does not promote
excessive risk-taking on the part of our executives or other employees.
Use of “Benchmarking” Data
General.With assistance from its compensation consultant, the Committee reviews each year “peer groups”
of other companies comparable to CenturyLink for purposes of assessing our comparative compensation and
performance. We generally endeavor to perform this analysis in the second half of each year in order to ensure
they remain well-suited for its intended purposes and uses during the upcoming year.
Compensation Benchmarking.The Committee, based on input from its compensation consultant, adopted
the following two peer groups in support of pay decisions for our senior officers in 2015 in order to benchmark
compensation levels for our executives against individuals who work in similarly-situated positions at companies
that are comparable to ours based on revenue size, market cap, industry and business model:
Core Peer Group
For our named executive officers, our compensation consultant utilized the compensation data publicly
disclosed by companies included within the Core Peer Group below:
Core Peer Group for Compensation Benchmarking
Cablevision Systems Corporation Level 3 Communications, Inc.
Charter Communications, Inc. Liberty Global PLC
CISCO Systems Inc. Motorola Solutions, Inc.
Comcast Corporation QUALCOMM Incorporated
Computer Sciences Corporation Sprint Corporation
DIRECTV Time Warner Cable Inc.
DISH Network Corporation Windstream Holdings, Inc.
In selecting these 14 peer companies, the Committee focused principally on telecommunications, cable and
other communications companies that are generally comparable to us in terms of size, markets and operations.
The Committee reviewed the prior year Core Peer Group and elected to remove NII Holdings Inc. and Viacom
Inc. and to add CISCO Systems Inc, Computer Sciences Corporation and Liberty Global PLC. It also once again
elected not to include Verizon or AT&T, both of which are substantially larger than CenturyLink.
For our other senior officers, our compensation consultant utilized survey data containing compensation
information for companies in the telecommunications industry that are generally similar in size to us.
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