FairPoint Communications 2009 Annual Report Download - page 178

Table of Contents
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The compensation committee determines the level of base salary for our Chief Executive Officer and the other executive officers with the general
goal of providing competitive salaries. In making its decisions, the compensation committee considers independent studies and surveys prepared by
consultants based on publicly available information with respect to other comparable communications companies. In addition, with respect to each
executive officer, including the Chief Executive Officer, the compensation committee considers the individual's performance, including that individual's
total level of experience in the communications industry, his or her record of performance and contribution to our success relative to his or her job
responsibilities and annual goals, as well as his or her overall service to the Company.
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The annual incentive awards are based on a combination of corporate and individual goals having specific financial and operational objectives such
as the following: FairPoint achieving specified milestones under the installation schedule for its Next Generation Network, FairPoint achieving a
specified year-end broadband penetration target, FairPoint achieving certain free cash flow and revenue targets, FairPoint accomplishing certain
budgetary, operational and regulatory goals and providing Company and industry leadership. We generally establish bonus targets and performance
criteria at the end of each year for the following year.
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In determining the long term incentive component of the Chief Executive Officer's compensation, the compensation committee considers, among
other factors selected by the compensation committee, our performance and relative stockholder return and the value of similar incentive awards to chief
executive officers at comparable companies. With respect to the amount of long term incentive awards for other executive officers and key employees,
the compensation committee considers the recommendation of the Chief Executive Officer and takes into account the amount of long term incentive
awards granted to peer executives at comparable companies. The compensation committee also obtains and reviews market compensation data from its
compensation consultant.
The compensation committee determines the vesting schedule and criteria for future equity awards. We do not time our equity awards to the release
of material non-public information.
In 2007, the compensation committee established stock ownership guidelines for certain of our executives which became effective in 2008. These
guidelines are intended to reflect our executives' commitment to the organization and strong alignment with our stockholders. The guidelines, which
must be achieved by 2013 (or if an executive is employed or promoted after 2008 to a position that is subject to the guidelines, within five years of that
date), include ownership of our common stock in an amount equal to or greater than, for our Chief Executive Officer, five times his base salary, for the
NEOs other than the Chief Executive Officer and all other Executive Vice Presidents and Senior Vice Presidents, three times his or her base salary and
for all Vice Presidents, one times his or her base salary.
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We have maintained a nonqualified deferred compensation plan (the "NQDC Plan") for NEOs and other select senior management to enable them
to defer compensation in excess of the limits applicable to them under our 401(k) plan. Matching contributions are made to the NQDC Plan
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