Cincinnati Bell 2009 Annual Report Download - page 51

2010 Chief Executive Officer Compensation
The Compensation Committee focused its deliberations primarily on the following factors in determining
Mr. Cassidy’s compensation:
•The objectives of the Company’s compensation programs;
•The compensation of other chief executive officers in the two study company peer groups;
•The overall results achieved by the Company in a highly competitive market environment; and
•Mr. Cassidy’s personal performance, including succession planning and his personal involvement in
community affairs in the greater Cincinnati area.
As a result of the data and deliberations, the Compensation Committee recommended, and the full Board
approved, the following 2010 compensation for Mr. Cassidy:
•Base Salary — Mr. Cassidy’s salary remained unchanged at $645,000, which is 84% of the peer group
benchmark.
•Annual Bonus Target — Mr. Cassidy’s annual target bonus remains at 150% of base salary, which is
146% of the peer group benchmark. Mr. Cassidy became CEO in July 2003, his salary was adjusted
effective January 1, 2004 to its present level and has remained unchanged. Mr. Cassidy’s total cash
compensation, which is the sum of his base salary plus annual target bonus, is 112% of the peer group
benchmark.
•Long-Term Incentives — For the 2009 fiscal year, Mr. Cassidy was granted a cash target of $1,329,904 with
respect to the 2009 – 2011 performance period in January 2009, a stock option of 680,000 common shares in
December 2008 and a grant of 1,000,000 SARs in January 2009. For the 2010 fiscal year, Mr. Cassidy was
granted a $872,500 cash target award with respect to the 2010 – 2012 performance period, a stock option for
304,703 common shares and a grant of 304,703 cash settled SARs, all of which were granted in January
2010. Mr. Cassidy’s total 2010 opportunity is equal to 102% of the peer group benchmark.
Miscellaneous Items
Stock Ownership Guidelines
The Compensation Committee recognizes that executive stock ownership is an important means of aligning
the interests of the Company’s executives with those of its shareholders. To that end, the Compensation
Committee has established the following stock ownership guidelines:
•Chief Executive Officer — 3 times base salary (as adjusted each year)
•Other named executive officers — 1.5 times base salary (as adjusted each year)
Since the personal situation of each executive may vary, the Compensation Committee has not set a specific
period of time in which the ownership level must be achieved, but does expect each executive to make
measurable progress on a year-over-year basis as evidenced by the number of shares owned multiplied by the fair
market value of the Company’s stock. Aside from the Company’s actual performance from one year to the next,
the price of the Company’s stock may vary due to the general condition of the economy and the stock market.
Therefore, the Compensation Committee may measure an executive’s progress more on the basis of the year-
over-year increase in the number of shares owned than the overall market value of the shares owned in relation to
the executive’s ownership goal. For purposes of measuring ownership, only shares owned outright by the
executive (including shares owned by the executive’s spouse or dependent children and shares owned through the
Company’s savings plan or deferred compensation plan) are included. Shares represented by unvested stock
options or any other form of equity for which some condition remains to be completed before the executive earns
a right to and receives the shares (except for shares that have been electively deferred to a future date) are not
counted in determining the executive’s level of ownership.
As of March 5, 2010, Mr. Cassidy owned shares valued at approximately 194% of his ownership target;
Mr. Ross achieved approximately 225% of his ownership goal; Mr. Wojtaszek achieved approximately 53% of
his ownership goal; Ms. Khoury, who joined the Company in March 2009, achieved approximately 57% of her
ownership goal and Mr. Wilson achieved approximately 169% of his ownership goal.
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Proxy Statement