Cincinnati Bell 2009 Annual Report Download - page 41

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Determining the Amount of Compensation
The Compensation Committee is primarily responsible for determining executive compensation. The
Compensation Committee has retained Mr. Charles Mazza, an independent compensation consultant who is
retained solely by the Compensation Committee and performs no services for management, to assist it in its
deliberations regarding executive compensation. Pursuant to the Committee’s instructions, Mr. Mazza analyzes
and comments on various compensation proposals made by the Company and on various topics specified by the
Committee and opines and reports on these matters in open sessions of Compensation Committee meetings. In
executive sessions of Compensation Committee meetings, Mr. Mazza addresses subjects of particular interest to
the Compensation Committee, such as compensation of the Chief Executive Officer. In such instances,
Mr. Mazza presents his analysis along with the pros and cons of certain compensation elements and his
recommendations. Pursuant to the Compensation Committee Chair’s request, Mr. Mazza contacts each member
of the Compensation Committee annually as part of the Compensation Committee’s self-evaluation and reports
his conclusions to the Compensation Committee.
The Company retains Towers Watson, a compensation consulting firm, to assist it with various
compensation-related projects during the course of the year. Typically, the Company has a discussion with
Towers Watson about a project, outlining the project’s objectives, and discusses Towers Watson’s approach to
the project before requesting them to complete the project. The projects range from requests for general
compensation data or information to requests for specific guidance and recommendations, such as designing
specific incentive plans.
At the Company’s request, Towers Watson conducts an annual study of marketplace compensation
practices. The Compensation Committee annually benchmarks each executive’s compensation to ensure that it is
in a competitive range and that an appropriate portion of it is “at risk”: that is, subject to payment only if the
Company obtains certain quantitative results and the individual achieves certain qualitative results. Towers
Watson obtains, compiles and supplies to the Company and the Compensation Committee competitive
compensation information. This information covers two peer groups:
The first peer group consists of 18 telecommunications companies. The Company, in consultation with
Towers Watson and Mr. Mazza, annually reviews the list of companies in this group to make certain that the
group is appropriate, and the Compensation Committee, after review, approves the peer group. The
telecommunications peer group currently includes:
•AT&T •Mediacom Communications Corp.
•CenturyLink Inc. •Qwest Communications International
•Level 3 Communications Inc. •Sprint Nextel Corp.
•Comcast Corp. •Telephone & Data Systems
•FairPoint Communications Inc. •Time Warner
•Frontier Communications Corp. •United States Cellular
•PAETEC Holding Corp. •USA Mobility Inc.
•Global Crossing Ltd. •Verizon
•Iowa Telecommunications Services Inc. •Vonage
27
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