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Windstream Seeks $20 Million Bonus to ‘Motivate’ Executives

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A Chapter 11 bankruptcy court may approve bonuses for Windstream’s five most senior employees.

Windstream's Tony Thomas

Windstream’s Tony Thomas

Windstream hopes to maintain its Key Employee Incentive Program (KEIP), which would benefit President and CEO Tony Thomas, Chief Financial Officer and Treasurer Robert Gunderman, Enterprise and Wholesale President Layne Levine, Kinetic business unit President Jeff Small and Executive Vice President, General Counsel and Corporate Secretary Kristi Moody. The program could dole out a total of $20.1 million if the executives meet their performance requirements throughout 2019.

Windstream filed for bankruptcy in February after a court ruled that it owed $310.5 million to one of its bondholders. The company announced last week that it will cut 15% of its partner base while upping commissions for the remainder.

The five executives are “generally responsible” for Windstream’s strategy and play a “central role” in the company’s Chapter 11 bankruptcy proceedings, according to Willis Towers Watson, which is consulting the reorganization efforts. The advisory firm declared to the U.S. District Court of the Southern District of New York Tuesday that the court should approve the KEIP as Windstream goes through the bankruptcy process.

The court filing states that the five members of senior management would only earn their base salaries without KEIP.

“This outcome could significantly undermine the Debtors’ ability to motivate their senior management to achieve desired business objectives,” wrote Zachary Georgeson, Willis Towers Watson’s senior consulting director. “The KEIP is, in part, designed to reasonably address this shortfall.”

The incentive program isn’t unusual, according to Georgeson, who said Windstream designed its incentive program to match the rest of its market. Its nine-company “executive compensation peer group” includes CenturyLink, Frontier, NetApp and Zayo Group.

Windstream would dish out incentive payments for the first half of 2019 and the respective third and fourth quarters. The maximum possible amount of total bonuses is $20.1 million, but the employees could earn a 0%, 50%, 100% or 200% percent depending if they meet their performance targets. Tony Thomas could accrue an extra $10.2 million if he reaches the “maximum award.” Kristy Moody has the lowest ceiling at $1.6 million.

Windstream Bonuses

Source: United States Bankruptcy Court, Southern District of New York

Reuters first reported the news. Windstream is also trying to retrain its Key Employee Retention Program (KERP), which gives up to $5 million to select “non-insider” employees.

One of the company’s rivals said this week that it is actively pursuing partners cut from Windstream’s program.


17 comments

  1. Avatar Windstream April 27, 2019 @ 8:03 am

    Why would they pay these morons more money for failing in the first place?? This is absurd and should not be done; we cannot already support the customers properly.

    • Avatar Francine Lankford June 10, 2019 @ 7:44 pm

      I have been trying to get in touch with the people whom pay the rent on Windstream buildings. The rent is way passed due. How long does the rent continue go unpaid in Whitney, Texas? I am the owner of the property on FM 2604 Whitney, Tx 76692. Thanks, Francine

      • Avatar Scooby July 12, 2019 @ 2:48 pm

        Francine, the check’s in the mail. Don’t you worry about it —- or maybe you should…hmmm. Doesn’t CH11 give us the ability to pay suppliers when we want or even at all….

  2. Avatar Anonymous manage4 April 27, 2019 @ 8:47 am

    This is pathetic. I say this as a long time employee who is salaried and has not recieved a raise in 4 years while the CEO might get 10 million this year.

  3. Avatar Guess April 27, 2019 @ 8:47 pm

    Where do the top five or anyone get off thinking they deserve a motivational bonus! For what! The bottom, who are micro managed, which are the front line to customers, are the ones who deserves a bonus if any. To continue their exhausting efforts to humble the clinent to believe or convince them that Windstream is still a Company they can rely on. We the bottom 5000 are far more deserving if any, or we get nothing. How dare you think anyone is deserving of a bonus, when we are where we’re at at this juncture. It seems to me and many of us, that all available funds should be used to make good to any creditor’s fist and foremost. Then, getting this company on a path of profitability is what’s needed. Not padding someone’s bank account who’s misguiding decisions led Windstream into bankruptcy.

  4. Avatar Anonymous April 29, 2019 @ 7:44 am

    Right! Because when you run a company into the ground, you should be rewarded.

  5. Avatar Don’t Need May 1, 2019 @ 6:24 am

    Congrats to the top 5. Hope you get your real reward on the other side.

  6. Avatar Seriously May 6, 2019 @ 10:57 am

    When Tony Thomas took over as CEO in December of 2014, Windstream Stock was trading at around $86.00 per share. Five years later, it is on the Pink Sheets at $0.30. Yeah, he deserves another $10mm for valued leadership.

  7. Avatar Bob May 9, 2019 @ 8:46 am

    I was one of the 15% agents that was cut. I am happy to donate my $80K per year if it will help motivate Tony Thomas.

  8. Avatar Fed Up Agent May 9, 2019 @ 10:17 am

    It’s outrageous. It happens time and again. Agents spend YEARS bringing these carriers business, ride all the highs and lows with them, only to be cut off at the knees with no warning whatsoever! I for one will NEVER sell another Windstream service. I will let every client and potential customer I have, know what a horrible Company they are….. Terrible at provisioning and Customer Service! Who’s with me ??? We take these hits and then continue to sell their services and that just encourages the next carrier to do it! They took a great company, “Paetec”, and DESTROYED it. These C Level Executives are a joke!…… They drive one company after another into the ground and walk away with a Golden Parachute!

  9. Avatar Amy Gerber May 10, 2019 @ 9:20 am

    There is absolutely no excuse for companies that go bankrupt to use it as an excuse to cut off agents and deny raises and bonuses to customer-facing employees, while simultaneously insisting that senior executives are so valuable that they need millions more so as not to leave and ruin yet another company.
    They’d get much better value from that money in using it at the customer-facing level. Now they’ve got disgruntled agents and employees not able to say positive things about the company based on their personal experience.
    This industry is being destroyed by greedy executives who use and abuse the people and independent businesses who helped grow these companies.

  10. Avatar Bob May 10, 2019 @ 10:08 am

    This agent hit the nail on the head. Windstream management, quite frankly could give a sh** about the agent. If they did they wouldn’t have terminated the relationships. I guess it’s worth loosing the few million on the front end, but on the back end, it’s going to be worse. But who cares, we’re expendable? If we were still getting paid, we’d at least measure the new progress and then start placing business with Windstream again. But once you cut or knees off the agent, we are going to tell any potential client or existing client avoid them. I wish for once, management would lose their income and see what the results are on their family, seriously. Also, Windstream is willing to put up bonus money to management for performance but again, who cares about the little guy. Finally, you have to be blind, deaf and dumb at Windstream not to have seen you we’re ruining a good company back in the PAETEC days into the ground. My special needs son could have managed Windstream better.

    • Avatar Nunya Damnbusiness May 14, 2019 @ 6:06 pm

      PAETEC was such a great place to work. Then these crooked as****** with no integrity, poor decision making , no accountability took over. Let’s reward them for destroying the company and lay off more meat robots.. er..employees

  11. Avatar Knowledgable agent May 10, 2019 @ 10:10 am

    Tony,

    Switch careers. You suck!

  12. Avatar Ralph S McClure May 11, 2019 @ 8:26 am

    How about the some of the current executives pay 20 million back to company for their poor performance instead? If they quit fine, probably no other company will hire them with their track record.

    Their prior General Counsel was fired probably as a sacrafical lamb so as to avoid blame on others. Doesn’t the current Ceo and board have overall responsibility as to the sale of Uniti Corp? Thomas can determine bonuses? Why is he they not being held accountable? ..Court should appoint other administrators for bankruptcy guidence who can do much better by some in this current group. No one is so indespensible as the current Windstream legal team suggests, especially the current CEO.

  13. Avatar Nunya Damnbusiness May 14, 2019 @ 11:00 am

    Our crooked CEO and his shameless cronies. How motivated do these criminals need to be to drive the company into the ground while outsourcing all the work out and laying everyone off.

  14. Avatar whocares May 15, 2019 @ 3:25 pm

    Wow another example of rewarding bad behavior and poor performance. How could the court approve this? Because we now live in a country where there are no consequences for f___ing up if you are in a high position, but if you’re are a normal hardworking longtime employee, you get f___ed. Excuse the language but considering the nerve of what is being asked I think it is appropriate.

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