ASSOCIATION OF US WEST RETIREES
8223 E. ROMA AVENUE, SCOTTSDALE, AZ 85251
May 2013
DEAR FELLOW CENTURYLINK SHAREOWNER:
We urge you to VOTE FOR TWO IMPORTANT SHAREHOLDER PROPOSALS ON
CENTURYLINK'S PROXY CARD for the upcoming Annual Meeting scheduled for
May 22 at the corporate headquarters in Monroe, Louisiana.
ITEM 4(C): VOTE FOR THE "PROXY ACCESS PROPOSAL" FOR SHAREHOLDER
DIRECTOR NOMINATIONS
We believe long-term stockholders should have a meaningful voice in
nominating candidates for the Board of Directors. Even if shareholders
elect the Board's entire slate of nominees, simply adding the possibility
that incumbent directors could face a challenger and closer scrutiny by
stockholders will encourage independence and a better alignment with
shareholder interests, we believe.
This proposal allows large, long-term shareholders, or a group of
shareholders, to nominate candidates for election to the Board. It would
establish the same strict 3% ownership and 3-year eligibility thresholds
for nominating directors that the Securities and Exchange Commission (SEC)
adopted in the agency's now-vacated 2010 proxy access rule.
The proposal also provides that the number of shareholder-nominated
candidates cannot exceed 20% of the number of directors then serving.
AN IDENTICAL PROPOSAL WAS ADOPTED AT VERIZON THIS MONTH WITH THE SUPPORT
OF 53.2% of the shares voted at Verizon's Annual Meeting on May 2.
The eligibility limitations in this proposal also are identical to the
Bylaw amendment proposed by Hewlett Packard's Board of Directors AND A
DOPTED WITH THE SUPPORT OF 68.1% OF H-P'S OUTSTANDING COMMON STOCK at
the company's annual meeting on March 20, 2013 (with only 2% opposing).
This cautious approach promises to add some competition and choice to
director elections, while avoiding the potential disruption or abuse that
could allegedly occur if a larger share of the Board could be elected
from among candidates nominated by shareholders.
The need for greater accountability at CenturyLink is compelling in our view:
* Performance-Based Restricted Shares pay out 50% of Target for relative
total shareholder return as low as the bottom 25th percentile among S&P
500 companies (including for negative returns).
* "Golden Parachutes" - If CEO Glen Post terminates after a change in
control he'd receive an estimated $24.6 million (as of year-end 2012),
more than ten times his 2012 base salary plus target bonus (2013 Proxy,
pages 39, 62).
* "Pension Parachutes" - Senior executives terminated after a change in
control receive extra years of age and service credits, boosting their
qualified and non-qualified pension benefits.
ITEM 4(D): VOTE FOR THE "CONFIDENTIAL VOTING PROPOSAL" ON UNCONTESTED PROXY
MATTERS
This Confidential Voting Proposal asks our Board of Directors to adopt a
policy that prior to the Annual Meeting, the running tally of votes cast for
and against uncontested matters shall not be available to management or the
Board and shall not be used to solicit votes.
This enhanced confidential voting requirement would apply to (i) Board-
sponsored resolutions seeking approval of executive compensation
arrangements; (ii) proposals required by law, NYSE rules, or the Company's
Bylaws to be put before shareholders for a vote (e.g., say-on-pay advisory
votes); and (iii) shareholder resolutions submitted for inclusion in the
proxy pursuant to SEC Rule 14a-8. It would not apply to elections of
directors, or impede the Company's ability to monitor the number of votes
cast for the purpose of achieving a quorum.
Despite "confidential voting" rules that guarantee a secret ballot,
management is able to monitor voting results and take active steps to
influence the outcome - even on matters, such as ratification of stock
options or other executive compensation plans, where they have a direct
personal stake in the outcome.
A Yale Law School study concluded that as a result: "Management-sponsored
proposals (the vast majority of which concern the approval of stock options
or other bonus plans) are overwhelmingly more likely to win a corporate
vote by a very small amount than lose by a very small amount - to a degree
that cannot occur by chance."
While most votes are not close, close votes are won by management at a rate
that "should occur by chance less than one in one billion times," Yale Law
School Professor Yair Listokin concluded.
Based on examining the results of 13,000 company-sponsored resolutions over
a seven-year period, a majority of which related to approving executive
compensation, the Yale study found that "at some point in the voting process,
management obtains highly accurate information about the likely voting outcome
and, based on that information, acts to influence the vote."
We believe "corporate democracy" is distorted if, in close elections, senior
executives can change the outcome of votes on executive compensation by
monitoring voting results and using corporate resources to solicit the votes
needed to win.
As Professor Listokin concluded, "management's ability to obtain accurate
information while voting is still occurring should be stopped because it
gives management an important advantage relative to opponents of a resolution."
We hope you will join us and VOTE YOUR SHARES FOR ITEMS 4(C) AND 4(D).
Sincerely yours,
Mary M. Hull
President
Mm5hull@msn.com
Please note that the cost of this letter is being borne entirely by the retiree
organizations affiliated with the Association of US West Retirees. This
letter is not a solicitation. Do not return proxy cards to the Association.