DISH DISH Network Corporation

Implementation of Executive Compensation Program Objectives and Policies

Weighting and Selection of Elements of Compensation

As described in “General Compensation Levels” above, we have not assigned specific weights to any factors considered in determining compensation, and none of the factors are more dispositive than others.

Elements of Executive Compensation

The primary components of DISH Network’s executive compensation program have included:

These elements combine to promote the objectives and policies described above. Base salary, 401(k) benefits and other employee benefits and perquisites provided generally to DISH Network employees provide a minimum level of compensation for its NEOs. Short-term incentives reward individual performance and achievement of annual goals important to DISH Network. Long-term equity-incentive compensation aligns NEO compensation directly with the creation of long-term shareholder value and promotes retention.

DISH Network has not required that a certain percentage of an executive’s compensation be provided in one form versus another. However, our goal is to award compensation that is reasonable in relation to DISH Network’s compensation program and objectives when all elements of potential compensation are considered. Each element of DISH Network’s historical executive compensation and the rationale for each element is described below.

Base Cash Salary

DISH Network has traditionally included salary in its executive compensation package under the belief that it is appropriate that some portion of the compensation paid to its executives be provided in a form that is fixed and liquid occurring over regular intervals. Generally, for the reasons discussed in “Long-Term Equity Incentive Compensation” below, among others, DISH Network has weighted overall compensation towards equity components as opposed to base salaries. The Board of Directors has traditionally been free to set base salary at any level deemed appropriate, with the Compensation Committee setting the base salary of the Chairman. The Compensation Committee and the Board of Directors typically review base salaries once annually. Any increases or decreases in base salary on a year-over-year basis have usually been dependent on a combination of the following factors, as assessed by the Compensation Committee and/or the Board of Directors, as applicable:

Short-Term Incentive Compensation

This compensation program, if implemented for a particular year, generally provides for a bonus that is linked to annual performance as determined by the Compensation Committee at the beginning of each fiscal year when it establishes the short-term incentive plan for that year. The objective of the short-term incentive plan is to compensate NEOs in significant part based on the achievement of specific annual goals that the Compensation Committee believes will create an incentive to maximize long-term shareholder value. This compensation program also permits short-term incentive compensation to be awarded in the form of discretionary cash bonuses based on individual performance during the year.

Long-Term Cash Incentive Compensation

Generally, the objective of the Corporation’s long-term cash incentive plans is to compensate NEOs in significant part based on the achievement of specific annual goals over a period of time that the Compensation Committee believes will create an incentive to maximize long-term shareholder value.

Long-Term Equity Incentive Compensation

DISH Network has traditionally operated under the belief that executive officers will be better able to contribute to its long-term success and help build incremental shareholder value if they have a stake in that future success and value. DISH Network believes this stake focuses the executive officers’ attention on managing DISH Network as owners with equity positions in DISH Network and aligns their interests with the long-term interests of DISH Network’s shareholders. Equity awards therefore have represented an important and significant component of DISH Network’s compensation program for executive officers. DISH Network has attempted to create general incentives with its standard stock option grants and conditional incentives through conditional awards that may include payouts in cash or equity.

General Equity Incentives

With respect to equity incentive compensation, DISH Network attempts to ensure that each NEO has equity incentives at any given time that are significant in relation to such individual’s annual cash compensation to ensure that each of DISH Network’s NEOs has appropriate incentives tied to the performance of DISH Network’s Class A Shares. Therefore, DISH Network may grant more equity incentives to one particular NEO in a given year if a substantial portion of the NEO’s equity incentives are vested and the underlying stock is capable of being sold. In addition, if a NEO recently received a substantial amount of equity incentives, DISH Network may not grant any equity incentives to that particular NEO. In particular, in granting awards for 2022, the Compensation Committee took into account, among other things, the amount necessary to retain our executive officers and that our executive officers had been granted equity incentives under the 2013 LTIP, the 2017 LTIP, the 2019 LTIP, the 2022 Incentive Plan and the Wireless Incentive Plan, discussed below.

In granting equity incentive compensation, the Compensation Committee also takes into account whether the NEO has been promoted in determining whether to grant equity awards to that individual. Finally, from time to time, the Compensation Committee may grant one-time equity awards based on a number of subjective criteria, including, but not limited to, the NEO’s position and role in DISH Network’s success and whether the NEO made any exceptional contributions to DISH Network’s success.

To aid in our retention of employees, non-performance options granted under DISH Network’s stock incentive plans generally vest at the rate of 20% per year and have exercise prices not less than the fair market value of DISH Network’s Class A Shares on the date of grant or the last trading day prior to the date of grant (if the date of grant is not a trading day). Other than performance-based awards, including awards granted under the 2013 LTIP, the 2017 LTIP, the 2019 LTIP, the 2022 Incentive Plan, and the Wireless Incentive Plan, DISH Network’s standard form of equity award agreement given to executive officers has included acceleration of vesting upon a change in control of DISH Network for those executive officers that are terminated by DISH Network or the surviving entity, as applicable, for any reason other than for cause during the twenty-four month period following such change in control.

The principal provisions of our equity incentive plans, and certain material equity incentive grants under such plans, are summarized below. This summary and the features of these equity incentive plans and grants set forth below do not purport to be complete and are qualified in their entirety by reference to the provisions of the specific equity incentive plan or grant.

Practices Regarding Grant of Equity Incentives

Prior to 2013, DISH Network generally awarded equity incentives as of the last day of each calendar quarter and set exercise prices at not less than the fair market value of Class A Shares on the date of grant or the last trading day prior to the date of grant (if the last day of the calendar quarter was not a trading day). Beginning April 1, 2013, DISH Network generally awards equity incentives as of the first day of each calendar quarter and will set exercise prices at not less than the fair market value of Class A Shares on the date of grant or the last trading day prior to the date of grant (if the date of grant is not a trading day), although we may make certain one-time or special grants during other times of the year, as previously discussed. The Ergen 2020 Performance Award, discussed below, was not granted on the first day of a calendar quarter, but, consistent with DISH Network’s typical practice, the exercise price was set at the fair market value of Class A Shares on the date of the grant. In addition, the initial stock options granted under the 2022 Incentive Plan, discussed below, were not granted on the first day of a calendar quarter, but, consistent with DISH Network’s typical practice, the exercise price was set at the fair market value of Class A Shares on the date of the grant.

2019 Stock Incentive Plan

In May 2019, we adopted an employee stock incentive plan, which we refer to as the 2019 Stock Incentive Plan. The purpose of the 2019 Stock Incentive Plan is to allow us to grant new equity awards after the expiration of the 2009 Stock Incentive Plan on May 11, 2019. The 2019 Stock Incentive Plan allows the Corporation to continue to provide incentives to attract and retain executive officers and other key employees. Awards available to be granted under the 2019 Stock Incentive Plan include: (i) stock options; (ii) stock appreciation rights; (iii) restricted stock and restricted stock units; (iv) performance awards; (v) dividend equivalents; and (vi) other stock-based awards.

Class B Chairman Stock Option Plan

DISH adopted a Class B Chairman stock option plan, which is referred to as the 2002 Class B Chairman Stock Option Plan. The purpose of the 2002 Class B Chairman Stock Option Plan is to promote the interests of DISH Network and its subsidiaries by aiding in the retention of Charles W. Ergen, the Chairman of DISH Network, whom the Board of Directors believes is crucial to assuring our future success, offer Mr. Ergen incentives to put forth maximum efforts for our future success and afford Mr. Ergen an opportunity to acquire additional proprietary interests in DISH Network. Mr. Ergen abstained from our Board of Directors’ vote on this matter. Awards available to be granted under the 2002 Class B Chairman Stock Option Plan include nonqualified stock options and dividend equivalent rights with respect to DISH Network’s Class B Shares.

Employee Stock Purchase Plan

We have adopted an employee stock purchase plan, which we refer to as our ESPP. The purpose of the ESPP is to provide our eligible employees with an opportunity to acquire a proprietary interest in us by the purchase of our Class A Shares. All full-time employees who are employed by DISH Network for at least one calendar quarter are generally eligible to participate in the ESPP. Employee stock purchases are made through payroll deductions. Under the terms of the ESPP, employees are not permitted to deduct an amount that would permit such employee to purchase our capital stock in an amount that exceeds $25,000 in fair market value of capital stock in any one year. The ESPP is intended to qualify under Section 423 of the Code and thereby provide participating employees with an opportunity to receive certain favorable income tax consequences as to stock purchased under the ESPP. On March 14, 2023, our Board adopted an amendment and restatement of the ESPP, which is subject to approval by our shareholders at the Annual Meeting. The proposed amendment and restatement of the ESPP would increase the number of Class A Shares that may be purchased under the ESPP from 6,800,000 to 9,800,000. For information regarding the proposed amendment and restatement of the ESPP, see Proposal No. 3.

Exchange Offer

On June 24, 2022, we commenced a tender offer to eligible employees (which excludes our co-founders and the independent members of our Board of Directors) to exchange eligible stock options (which excludes the Ergen 2020 Performance Award discussed below) for new options as detailed in our Schedule TO filed June 23, 2022 with the Securities and Exchange Commission (the “Exchange Offer”), to, among other things, further align employee incentives with the current market. The Exchange Offer expired on July 22, 2022. As a result of the Exchange Offer, the exercise price of approximately 13 million stock options, affecting approximately 700 eligible employees, was adjusted during the third quarter of 2022 to $20.00.

Ergen 2020 Performance Award

On November 4, 2020, the Compensation Committee of DISH Network approved an award to Mr. Ergen of long-term performance-based options (the “Ergen 2020 Performance Award” or the “Award”) to purchase up to 12,500,000 Class A Shares. The Award is subject to the achievement of performance vesting goals based on specified stock price targets (the “DISH Stock Price Targets”) as set forth in the table below over the ten-year period following the date of grant (except for the first two DISH Stock Price Targets (Tranche 1 and Tranche 2)). The Award was granted on November 6, 2020, with an exercise price of $27.71 (equal to the closing stock price of the Class A Shares as reported on NASDAQ on November 6, 2020). The Award will expire on February 6, 2031.

In approving the Ergen 2020 Performance Award, the Compensation Committee recognized, among other things, the unique blend of leadership, experience, and knowledge of our industry and business that Mr. Ergen brings to DISH Network and the continued importance of Mr. Ergen’s role as the individual who identifies strategic priorities and leads the execution of DISH Network’s long-term strategy, including, without limitation, its wireless business, which is expected to drive long-term value for DISH Network and its shareholders. In an effort to further incentivize Mr. Ergen’s continued long-term performance, the Compensation Committee designed the Award to be a challenging long-term incentive for future performance, and the Compensation Committee noted in particular that the performance thresholds could take many years to achieve, if they can be achieved at all. In addition, the Compensation Committee sought to ensure that the Ergen 2020 Performance Award would further align Mr. Ergen’s interests with those of DISH Network’s shareholders over the long-term.

In connection with its design, evaluation and approval of the Ergen 2020 Performance Award, the Compensation Committee retained an independent compensation consultant, Compensia, to consider various designs for the structure of the award related to the grant value and award structure. Compensia’s review included an assessment of comparable long-term incentive awards granted to other leaders of a range of technology and media companies. In addition, Compensia prepared a competitive market assessment of Mr. Ergen’s projected annual compensation relative to the annual pay of leaders at a peer set of similar industry and size/value competitors to DISH Network. This analysis determined that Mr. Ergen’s annual compensation (including the annualized fair value of the Ergen 2020 Performance Award) was generally lower than the compensation of the leaders of these peer companies.

Subject to Mr. Ergen’s continued employment in his position as Chairman of DISH Network (or a substantially equivalent role as determined by the Compensation Committee in its discretion) through the date on which the DISH Stock Price Targets are achieved, the Ergen 2020 Performance Award will vest in the following tranches upon achievement of the following DISH Stock Price Targets:

In the event that a DISH Stock Price Target is determined by the Compensation Committee to have been achieved during an applicable calendar quarter (or at its ten-year anniversary) as set forth below: (i) that applicable DISH Stock Price Target will be retired; and (ii) the corresponding tranche of the option will vest and shall become exercisable contemporaneously with the filing of the Corporation’s financial results for that quarter or year, as applicable, with the SEC. 

For purposes of the DISH Stock Price Targets, except for Tranches 1 and 2, the DISH Stock Price Target will be considered achieved if the average closing stock price, as reported on NASDAQ, of the Class A Shares for the thirty (30) calendar day period immediately prior to the end of any calendar quarter exceeds the respective DISH Stock Price Target (and the thirty (30) calendar day period prior to the Award’s ten-year anniversary on November 6, 2030) during the period that is ten years following the date of the grant.

With respect to Tranche 1, the applicable DISH Stock Price Target will be considered achieved if the average closing stock price, as reported on NASDAQ, of the Class A Shares for the thirty (30) calendar day period immediately prior to the end of any calendar quarter exceeds the respective DISH Stock Price Target during the first four years following the date of the grant.

With respect to Tranche 2, the applicable DISH Stock Price Target will be considered achieved if the average closing stock price, as reported on NASDAQ, of the Class A Shares for the thirty (30) calendar day period immediately prior to the end of any calendar quarter exceeds the respective DISH Stock Price Target during the first seven years following the date of the grant.

In the event a “change in control” of the Corporation occurs while any portion of the 2020 Ergen Performance Award is unvested, the value of the transaction consideration per share for a Class A Share will be used to determine whether any additional portion of the Ergen 2020 Performance Award will vest. For purposes of the Award, a “change in control” of the Corporation is generally deemed to occur upon: (i) a transaction or a series of transactions the result of which is that any person (other than Mr. Ergen (our controlling shareholder) or a related party) individually owns more than fifty percent (50%) of the total equity interests of either: (A) the Corporation; or (B) the surviving entity in any such transaction(s) or a controlling affiliate of such surviving entity in such transaction(s); and (ii) the first day on which a majority of the members of the Board of Directors are not continuing directors.

The Ergen 2020 Performance Award was granted under the terms of the Corporation’s 2019 Stock Incentive Plan and a non-qualified stock option agreement that includes, among other terms and conditions, a post-exercise holding period requirement (net of taxes and exercise price) on the Class A Shares obtained upon exercise that is equal to the longer of: (i) five years from the date of grant; or (ii) one year following the date of exercise for applicable shares exercised under the Award.

During 2021, the price targets for Tranche 1 and Tranche 2 were achieved, resulting in the vesting of 2,500,000 stock options, as determined by the Compensation Committee. No additional price targets were achieved during 2022.

2013 Long-Term Incentive Plan

On November 30, 2012, the Board of Directors and the Compensation Committee approved a long-term, performance-based stock incentive plan, the 2013 Long-Term Incentive Plan, or 2013 LTIP, within the terms of DISH Network’s 2009 Stock Incentive Plan. The purpose of the 2013 LTIP is to promote DISH Network’s interests and the interests of its shareholders by providing key employees with financial rewards through equity participation upon achievement of specified long-term cumulative free cash flow goals while achieving and maintaining a specified long-term subscriber threshold and total net subscriber goals. The employees eligible to participate in the 2013 LTIP generally include DISH Network’s executive officers, senior vice presidents, vice presidents and director-level employees. Employees participating in the 2013 LTIP received a one-time award of: (i) an option to acquire a specified number of shares priced at the market value as of the first day of the calendar quarter in which the option was granted or the last trading day prior to the date of grant (if the first day of the calendar quarter is not a trading day); and (ii) rights to acquire for no additional consideration a specified smaller number of Class A Shares. Initial awards granted under the 2013 LTIP were made as of January 1, 2013. Under the 2013 LTIP, the cumulative free cash flow goals and the total net subscriber threshold are measured on the last day of each calendar quarter. The cumulative free cash flow goals commenced April 1, 2013. The total net subscriber goals are measured on the last day of each calendar quarter commencing on January 1, 2013. For purposes of the total net subscriber goal and total net subscriber threshold under the 2013 LTIP, the calculation of “subscribers” is a formula that takes into account, among other things, Pay-TV subscribers and broadband subscribers (including, without limitation, the applicable characteristics of such subscribers). In addition, for purposes of the cumulative free cash flow goals under the 2013 LTIP, the calculation of “cumulative free cash flow” is a formula that takes into account, among other things, free cash flow as set forth in the Corporation’s financial results for that quarter or year, as applicable, filed with the SEC, but excluding free cash flows from the Corporation’s wireless line of business. The Compensation Committee has final authority to, among other things, interpret and calculate any and all aspects of the 2013 LTIP, including vesting and all other aspects of calculating the achievement of the goals under the 2013 LTIP. As of July 2016, we no longer grant new awards under the 2013 LTIP.

In the event that a cumulative free cash flow goal and/or total net subscriber goal is achieved, and the total net subscriber threshold is met, as of the last day of any such calendar quarter, as determined by the Compensation Committee: (i) the applicable cumulative free cash flow goal and/or total net subscriber goal will be retired; and (ii) the corresponding increment of the option/restricted stock unit will vest and shall become exercisable contemporaneously with filing of the Corporation’s financial results for that quarter or year, as applicable, with the SEC, in accordance with the following vesting schedules:

Employees who were granted equity awards after April 1, 2014 under the 2013 LTIP received: (i) an option to acquire a reduced number of Class A Shares; and (ii) rights to acquire for no additional consideration a reduced number of Class A Shares, relative to the amounts that were granted to employees at the same level prior to April 1, 2014.  Such awards are subject to a vesting schedule that varies based upon the date on which such awards were granted.

Messrs. Ergen, Carlson and Cullen were each granted an option to purchase 60,000 Class A Shares and 30,000 RSUs under the 2013 LTIP on January 1, 2013. Mr. Orban was granted an option to purchase 30,000 Class A Shares and 15,000 RSUs under the 2013 LTIP on January 1, 2013. Mr. Swieringa was granted an option to purchase 15,000 Class A Shares and 7,500 RSUs under the 2013 LTIP on January 1, 2013. Mr. Swieringa was granted an additional option to purchase 15,000 Class A Shares and 7,500 RSUs under the 2013 LTIP on April 1, 2014, as a result of his promotion to Chief Information Officer in March 2014. Finally, Mr. Swieringa was granted an additional option to purchase 15,000 Class A Shares and 7,500 RSUs under the 2013 LTIP on January 1, 2016, as a result of his promotion to Executive Vice President, Operations in December 2015.

Exercise of the stock awards is contingent on achieving these performance conditions by September 30, 2022. During 2013, none of the goals under the 2013 LTIP were achieved. During 2014, we achieved the cumulative free cash flow goal of $1 billion while achieving and maintaining a minimum threshold of 14.5 million total net subscribers, which resulted in the cumulative vesting of 10% of the 2013 LTIP stock awards during 2014, as determined by the Compensation Committee. Accordingly, the $1 billion cumulative free cash flow goal under the 2013 LTIP was retired. In addition, during 2014, we achieved the 14.5 million total net subscriber goal, which resulted in the cumulative vesting of 10% of the 2013 LTIP stock awards during 2014, as determined by the Compensation Committee. Accordingly, the 14.5 million total net subscriber goal under the 2013 LTIP was retired. None of the goals under the 2013 LTIP were achieved prior to the September 30, 2022 performance conditions achievement deadline. The 2013 LTIP expired on January 1, 2023 and all outstanding and unvested options were cancelled.

2017 Long-Term Incentive Plan

On December 2, 2016, the Board of Directors and the Compensation Committee approved a long-term, performance-based stock incentive plan, the 2017 Long-Term Incentive Plan, or 2017 LTIP, within the terms of DISH Network’s 2009 Stock Incentive Plan. The 2017 LTIP provided stock options, which were subject to vesting based on company-specific subscriber and financial performance conditions. Awards were initially granted under the 2017 LTIP as of January 1, 2017. Exercise of the stock awards was contingent on achieving these performance conditions by December 31, 2020, however, none of the performance conditions were achieved. No further stock options have been granted under the 2017 LTIP.

Messrs. Ergen, Carlson, Cullen and Swieringa were each granted an option to purchase 60,000 Class A Shares under the 2017 LTIP on January 1, 2017. Mr. Orban was granted an option to purchase 30,000 Class A Shares under the 2017 LTIP on January 1, 2017.

2019 Long-Term Incentive Plan

On August 17, 2018, the Board of Directors and the Compensation Committee approved a long-term, performance-based stock incentive plan, the 2019 Long-Term Incentive Plan, or 2019 LTIP, within the terms of DISH Network’s 2009 Stock Incentive Plan. The purpose of the 2019 LTIP is to promote DISH Network’s interests and the interests of its shareholders by providing key employees with financial rewards through equity participation upon achievement of specified long-term goals. The employees eligible to participate in the 2019 LTIP generally include DISH Network’s executive officers, senior vice presidents, vice presidents and director-level employees. Employees participating in the 2019 LTIP receive a one-time award of an option to acquire a specified number of shares priced at the market value as of the first day of the calendar quarter in which the option was granted or, if the first day of the calendar quarter is not a trading day, the last trading day prior to the date of grant. Initial awards granted under the 2019 LTIP were made as of October 1, 2018.

Under the 2019 LTIP: (i) the net Pay-TV subscriber growth goals, top-line revenue growth goals, top award for customer service and/or satisfaction goals, and annual average employee survey score goals are measured at the end of each calendar year during the period between and including January 1, 2019 and December 31, 2023; and (ii) the wireless buildout and revenue goal, Smart Home Services and fulfillment third-party revenue goals, and cumulative free cash flow goals are measured at the end of each calendar quarter during the period between and including October 1, 2018 and December 31, 2023.

In the event that a goal under the 2019 LTIP is achieved as of the last day of any calendar quarter or year, as applicable, as determined by the Compensation Committee: (i) the applicable goal will be retired; and (ii) the corresponding increment of the options will vest and become exercisable contemporaneously with filing of the Corporation’s financial results for that quarter or year, as applicable, with the SEC, in accordance with the following vesting schedules; provided, however, that although the potential goal achievements add up to one hundred twenty percent (120%), only one hundred percent (100%) of the option award may vest:

The Cumulative Free Cash Flow Goals will be achieved if the Corporation achieves the respective amounts of cumulative free cash flow above during the measurement period, which calculation of “cumulative free cash flow” is a formula that takes into account, among other things, free cash flow as set forth in the Corporation’s Form 10-K, Form 10-Q, or Form 8-K for that quarter or year, as applicable, filed with the SEC, subject to certain exclusions.

The Smart Home Services and Fulfillment Third-Party Revenue Growth Goals (collectively, the “SHS Goals” and each a “SHS Goal”) will be achieved if the Corporation achieves the respective amounts of revenue above from the Corporation’s Smart Home Services and third-party fulfillment businesses during the measurement period.

The Top Award for Customer Service and/or Satisfaction Goal (collectively, the “Top Award Goals” and each a “Top Award Goal”) will be achieved if DISH and/or Sling win certain qualifying customer service and/or satisfaction awards in a calendar year during the measurement period.

The Annual Average Employee Survey Goal (collectively, the “Employee Survey Goals” and each an “Employee Survey Goal”) will be achieved if the Corporation receives a certain average employee satisfaction score across all surveys provided to employees in a calendar year during the measurement period.

The Wireless Buildout and Revenue Goal will be achieved: (i) if the Corporation meets certain buildout and revenue milestones related to its wireless business; or (ii) upon closing of the acquisition of certain assets and liabilities associated with Sprint’s Boost Mobile, Virgin Mobile and Sprint-branded prepaid mobile services businesses.

The Net Pay-TV Subscriber Growth Goal will be achieved if the number of total Pay-TV subscribers at the end of a given year is higher than the number of total Pay-TV subscribers at the end of the immediately preceding year, as measured by the net Pay-TV subscriber additions announced in the Corporation’s Form 10-K or 8-K filed with the SEC announcing annual financial results for each calendar year during the measurement period.

The Top-line Revenue Growth Goal will be achieved if total revenue in a given year that is higher than the total revenue in the immediately preceding year, as measured by the total revenue announced in the Corporation’s Form 10-K or 8-K filed with the SEC announcing annual financial results for each calendar year during the measurement period.

The Compensation Committee has final authority to, among other things, interpret and calculate any and all aspects of the 2019 LTIP, including vesting and all other aspects of calculating the achievement of the goals under the 2019 LTIP.

Employees who are granted equity awards after October 1, 2018 under the 2019 LTIP will be eligible to receive an option to acquire a reduced number of Class A Shares, relative to the amounts that were granted to employees at the same level on October 1, 2018. Such awards are subject to a vesting schedule that varies based upon the date on which such awards were granted.

During 2019, we achieved: (i) the cumulative free cash flow goals of $1 billion and $2 billion; (ii) the SHS Goal of $100 million, (iii) the Employee Survey Goal for 2019; and (iv) the Top Award Goal for 2019, which resulted in the cumulative vesting of 21.33% of the 2019 LTIP stock awards during 2019, as determined by the Compensation Committee. Accordingly, the $1 billion and $2 billion cumulative free cash flow goals, the SHS Goal of $100 million, the Employee Survey Goal for 2019, and the Top Award Goal for 2019 were retired.

During 2020, we achieved: (i) the cumulative free cash flow goals of $3 billion, $4 billion and $5 billion; (ii) the SHS Goal of $200 million and $300 million, (iii) the Employee Survey Goal for 2020; (iv) the Top Award Goal for 2020; (v) the Top Line Revenue Growth Goal; and (vi) the Wireless Buildout and Revenue Goal, which resulted in the cumulative vesting of 44.67% of the 2019 LTIP stock awards during 2020, as determined by the Compensation Committee. Accordingly, the $3 billion, $4 billion and $5 billion cumulative free cash flow goals, the SHS Goal of $200 million and $300 million, the Employee Survey Goal for 2020, the Top Award Goal for 2020, the Wireless Buildout and Revenue Goal, and the Top Line Revenue Growth Goal for 2020 were retired.

During 2021, we achieved: (i) the SHS Goal of $400 million, (ii) the Employee Survey Goal for 2021; and (iii) the Top Line Revenue Growth Goal, which resulted in the cumulative vesting of 6.67% of the 2019 LTIP stock awards during 2021, as determined by the Compensation Committee. Accordingly, the SHS Goal of $400 million, the Employee Survey Goal for 2021, and the Top Line Revenue Growth Goal for 2021 were retired.

During 2022, we achieved: (i) the SHS Goal of $500 million, (ii) the Employee Survey Goal for 2022; and (iii) the the Top Award Goal for 2022, which resulted in the cumulative vesting of 4.67% of the 2019 LTIP stock awards during 2022, as determined by the Compensation Committee. Accordingly, the SHS Goal of $500 million, the Employee Survey Goal for 2022, and the Top Award Goal for 2022 were retired.

Mr. Carlson was granted an option to purchase 200,000 Class A Shares under the 2019 LTIP on October 1, 2018. Messrs. Ergen and Swieringa were each granted an option to purchase 100,000 Class A Shares under the 2019 LTIP on October 1, 2018. Messrs. Cullen and Orban were granted an option to purchase 50,000 Class A Shares under the 2019 LTIP on October 1, 2018. Mr. Orban was granted an additional option to purchase 50,000 Class A Shares under the 2019 LTIP on July 1, 2019, as a result of his promotion to Executive Vice President and Chief Financial Officer in June 2019.

As previously discussed, on June 24, 2022, we commenced an Exchange Offer to eligible employees (which excludes our co-founders and the independent members of our Board of Directors) to exchange eligible stock options for new options to, among other things, further align employee incentives with the current market. As a result of the Exchange Offer, options to purchase shares under the 2019 LTIP were exchanged and the exercise price of these options was adjusted to $20.00 effective July 22, 2022.

2022 Incentive Plan

On December 30, 2021, the Board and the Compensation Committee approved a performance-based incentive plan (the “2022 Incentive Plan”) under DISH’s 2019 Stock Incentive Plan. The purpose of the 2022 Incentive Plan is to promote the Corporation’s interests and the interests of the Corporation’s shareholders by generally providing certain executive officers, senior vice presidents, vice presidents and director-level employees within our established businesses with financial rewards through equity participation and cash incentives upon achievement of certain specified goals. Employees participating in the 2022 Incentive Plan are generally expected to receive cash awards and a one-time option to purchase a specified number of Class A Shares with an exercise price per share equal to the closing price of the Class A Shares on the date of grant or the last trading day prior to the date of grant (if the date of grant is not a trading day). The options were granted as of February 1, 2022. The amount of the cash award is tied to a certain percentage (based on the employee’s level) of the applicable employee’s base salary.

Under the 2022 Incentive Plan, all goals are measured at the end of each calendar quarter during the period between and including January 1, 2022 and December 31, 2026 (the “measurement period”).

In the event that a goal under the 2022 Incentive Plan is achieved as of the last day of any calendar quarter or year, as applicable, as determined by the Compensation Committee: (i) the applicable goal will be retired; (ii) the corresponding increment of the options (if applicable) will vest and become exercisable contemporaneously with filing of the Corporation’s financial results for that quarter or year, as applicable, filed with the SEC; and (iii) the corresponding increment of the cash award will be paid out. The 2022 Incentive Plan goals are below:

The Cumulative Free Cash Flow Goals will be achieved if the Corporation achieves the respective amounts of cumulative free cash flow above during the measurement period, which calculation of “cumulative free cash flow” is a formula that takes into account, among other things, free cash flow as set forth in the Corporation’s Form 10-K, Form 10-Q or Form 8-K announcing quarterly or annual financial results for that quarter or year, as applicable, filed with the SEC, subject to certain adjustments.

The Cumulative Revenue Goals will be achieved if the Corporation achieves the respective amounts of cumulative revenue above during the measurement period, which calculation of “cumulative revenue” is a formula that takes into account, among other things, the total revenue announced in the Corporation’s Form 10-K, Form 10-Q or Form 8-K announcing quarterly or annual financial results for that quarter or year, as applicable, filed with the SEC, subject to certain adjustments.

The Wireless Subscriber Goal will be achieved if the Corporation achieves more than 30 million wireless subscribers during the measurement period, which calculation of “subscribers” is a formula that takes into account, among other things, the total number of wireless subscribers announced in the Corporation’s Form 10-K, Form 10-Q or Form 8-K announcing quarterly or annual financial results for that quarter or year, as applicable, filed with the SEC, subject to certain adjustments.

The Compensation Committee has final authority to, among other things, interpret and calculate any and all aspects of the 2022 Incentive Plan, including vesting and all other aspects of calculating the achievement of the goals under the 2022 Incentive Plan.

Employees who are granted equity awards after February 1, 2022 under the 2022 Incentive Plan will be eligible to receive a reduced award under the 2022 Incentive Plan. Such awards are subject to a vesting schedule that varies based upon the date on which such awards were granted.

During 2022, we achieved: (i) the $1.0 billion Cumulative Free Cash Flow Goal; and (ii) the $2.0 billion Cumulative Free Cash Flow Goal, which resulted in the cumulative vesting of 33.34% of the 2022 Incentive Plan stock awards during 2022, as determined by the Compensation Committee. Accordingly, the $1.0 billion and $2.0 billion Cumulative Free Cash Flow Goals were retired.

Mr. Carlson was granted an option to purchase 200,000 Class A Shares and is eligible for a cash award payout equal to fifty percent (50%) of his annual salary per goal under the 2022 Incentive Plan. Mr. Swieringa was granted an option to purchase 100,000 Class A Shares and is eligible for a cash award payout equal to fifty percent (50%) of his annual salary per goal under the 2022 Incentive Plan. Mr. Orban was granted an option to purchase 40,000 Class A Shares and is eligible for a cash award payout equal to fifty percent (50%) of his annual salary per goal under the 2022 Incentive Plan.

As previously discussed, on June 24, 2022, we commenced an Exchange Offer to eligible employees (which excludes our co-founders and the independent members of our Board of Directors) to exchange eligible stock options for new options to, among other things, further align employee incentives with the current market. As a result of the Exchange Offer, options to purchase shares under the 2022 Incentive Plan were exchanged and the exercise price of these options was adjusted to $20.00 effective July 22, 2022.

Wireless Incentive Plan

Those executive officers, senior vice presidents, vice presidents and director-level employees that are not participating in the 2022 Incentive Plan, will generally be eligible to participate in the Corporation’s wireless incentive program for certain of our employees focused on our wireless business (the “Wireless Incentive Plan or “WIP”). These employees are generally eligible to receive cash payments tied to a certain percentage (based on the employee’s level) of the applicable employee’s base salary if the Corporation were to achieve certain specified wireless goals. On December 30, 2021, the Compensation Committee added an additional goal to the Wireless Incentive Plan. The Wireless Incentive Plan’s goals are below:

The 1^st Major City Build Out Goal will generally be achieved when the Corporation has completed its wireless build out of at least one major metropolitan city (with a population of 1 million or greater) and is able to successfully process commercial wireless traffic through its core wireless network as determined by the Compensation Committee. The 20% Coverage Goal, 70% Coverage Goal and 75% PEA Coverage Goal will generally be achieved when the Corporation has offered 5G broadband service to the coverage areas described in the table above by certain applicable deadlines for each goal (e.g., June 14, 2022, June 14, 2023 and June 2025, respectively), all as determined by the Compensation Committee.

The Cumulative Revenue Goal and the Wireless Subscriber Goal will be determined in the same manner described above with respect to the 2022 Incentive Plan.

The Compensation Committee has final authority to, among other things, interpret and calculate any and all aspects of the Wireless Incentive Plan, including vesting and all other aspects of calculating the achievement of the goals under the Wireless Incentive Plan.

During 2022, we achieved: (i) the 1^st Major City Build Out Goal; and (ii) the 20% Coverage of US Population Goal, as determined by the Compensation Committee. Accordingly, the 1^st Major City Build Out Goal and the 20% Coverage of US Population Goal were retired.

401(k) Plan

DISH Network has adopted the 401(k) Plan, a defined-contribution tax-qualified 401(k) plan, for its employees, including its executives, to encourage its employees to save some percentage of their cash compensation for their eventual retirement. DISH Network’s executives participate in the 401(k) Plan on the same terms as DISH Network’s other employees. Under the 401(k) Plan, employees generally become eligible for participation in the 401(k) Plan upon completing ninety (90) days of service with DISH Network and reaching age 19. 401(k) Plan participants are able to contribute up to 50% of their compensation in each contribution period, subject to the maximum deductible limit provided by the Code. DISH Network may also make a 50% matching employer contribution up to a maximum of $2,500 per participant per calendar year. In addition, DISH Network may also make an annual discretionary profit sharing contribution to the 401(k) Plan with the approval of its Compensation Committee and Board of Directors. 401(k) Plan participants are immediately vested in their voluntary contributions and earnings on voluntary contributions. DISH Network’s matching employer contributions and any annual discretionary profit sharing contributions to 401(k) Plan participants’ accounts vest 20% per year commencing one year from the employee’s date of employment.

Perquisites and Personal Benefits, Post-Termination Compensation and Other Compensation

DISH Network has traditionally offered numerous plans and other benefits to its executive officers on the same terms as other employees. These plans and benefits have generally included medical, vision and dental insurance, life insurance and the employee stock purchase plan, as well as discounts on DISH Network’s products and services. Relocation benefits may also be reimbursed, but are individually negotiated when they occur. DISH Network has also permitted certain NEOs and their family members and guests to use its corporate aircraft for personal use. DISH Network has also paid for annual tax preparation costs for certain NEOs.

DISH Network has not traditionally had any plans in place to provide severance benefits to employees. However, certain non-performance based stock options and restricted stock units have been granted to its executive officers subject to accelerated vesting upon a change in control.

Non-Binding Shareholder Advisory Vote on Executive Compensation

DISH Network provided its shareholders with the opportunity to cast a non-binding shareholder advisory vote on executive compensation, commonly referred to as the “say on pay” vote, at the annual meeting of shareholders held in May 2020. Over 98% of the voting power represented at the meeting and entitled to vote on that matter voted in favor of the executive compensation proposal. The Compensation Committee reviewed these voting results. Since the voting results affirmed shareholders’ support of our approach to executive compensation, we did not change our approach in 2022 as a direct result of the vote. For information regarding this year’s non-binding shareholder advisory vote on executive compensation, see Proposal No. 4.

Also based on the results of a separate non-binding advisory vote on the frequency of future shareholder advisory votes regarding executive compensation, commonly referred to as the “say on frequency” vote, held at our annual meeting of shareholders held in May 2017, we determined that we will hold our “say on pay” vote every three years. For information regarding this year’s non-binding advisory vote on the frequency of future shareholder advisory votes regarding executive compensation, see Proposal No. 5.

2022 Executive Compensation

Generally, DISH Network has historically made decisions with respect to executive compensation for a particular compensation year in December of the preceding compensation year or the first quarter of the applicable compensation year. With respect to the executive compensation of each NEO for 2022, the Compensation Committee (along with Mr. Ergen, for each of the NEOs other than himself) reviewed total compensation of each NEO and the value of, among other things: (a) historic and current components of each NEO’s compensation, including the annual base salary and bonus paid to the NEO in the prior year; and (b) equity incentives held by each NEO in DISH Network’s stock incentive plans. The Compensation Committee (along with Mr. Ergen, for each of the NEOs other than himself) also reviewed the Proxy Data prepared for 2022 and other information described in “Use of Third-Party Information” above. As described in “General Compensation Levels” above, DISH Network aims to provide annual base salaries and long-term incentives that are competitive in the market with an emphasis on providing a substantial portion of overall compensation in the form of equity incentives. In addition, the Compensation Committee has discretion to award performance based compensation that is based on performance goals different from those that were previously set or that is higher or lower than the anticipated compensation that would be awarded under DISH Network’s incentive plans if particular performance goals were met. From time to time, the Compensation Committee has exercised its authority to, among other things, interpret and calculate any and all aspects of performance-based awards under DISH Network’s incentive plans, including vesting and all other aspects of calculating the achievement of the goals under such performance-based compensation awards in accordance with their terms.

Compensation of our Chairman and our President and Chief Executive Officer

2022 Base Salary of Chairman. Mr. Ergen’s annual base salary for 2022 was determined based on a review by the Compensation Committee of the expected annual base salaries in 2022 of each of DISH Network’s other NEOs. The Compensation Committee did not increase Mr. Ergen’s salary in 2022. The Compensation Committee noted that Mr. Ergen’s base salary continued to be lower than the base salaries of the CEOs of the significant majority of the surveyed companies in the Proxy Data.

2022 Base Salary of President and Chief Executive Officer. In determining Mr. Carlson’s 2022 annual base salary, Mr. Ergen subjectively determined that Mr. Carlson’s existing base compensation was already within the range of market compensation indicated in the Proxy Data in light of DISH Network’s practices with respect to annual base salaries and therefore an increase over Mr. Carlson’s 2021 annual base salary was not necessary.

2022 Cash Bonus. No discretionary cash bonus was paid to Mr. Ergen or Mr. Carlson in 2022.

2022 Equity Incentives.  With respect to equity incentives, DISH Network attempts to ensure that the Chairman and the President and Chief Executive Officer have equity awards at any given time that are significant in relation to their annual cash compensation to ensure that they have appropriate incentives tied to the performance of DISH Network’s Class A Shares. On January 1, 2022, Mr. Carlson was awarded 100,000 restricted stock units under the 2019 Stock Incentive Plan. On December 29, 2022, Mr. Carlson also was awarded 459 Class A shares related to his employment anniversary.

Compensation of Other Named Executive Officers

2022 Base Salary

Base salaries for each of the other NEOs are determined annually by the Board of Directors primarily based on Mr. Ergen’s recommendations. The Board of Directors places substantial weight on Mr. Ergen’s recommendations in light of his role as Chairman and as co-founder and controlling shareholder of DISH Network. Mr. Ergen made recommendations to the Board of Directors with respect to the 2022 annual base salary of each of the other NEOs after considering, among other things: (a) the NEO’s annual base salary in 2021; (b) the range of the percentage increases in annual base salary for NEOs of the companies contained in the Proxy Data; (c) whether the NEO’s annual base salary was appropriate in light of DISH Network’s goals, including retention of the NEO; (d) the expected compensation to be paid to other NEOs in 2022 in relation to a particular NEO in 2022; (e) whether the NEO was promoted or newly hired in 2022; and (f) whether in Mr. Ergen’s subjective determination, the NEO’s performance in 2021 warranted an increase in the NEO’s annual base salary in 2022. Placing primary weight on: (i) the NEO’s annual base salary in 2021; and (ii) whether, in Mr. Ergen’s subjective view, an increase in 2022 annual base salary was warranted based on performance and/or necessary to retain the NEO, Mr. Ergen recommended the annual base salary amounts indicated in “Executive Compensation and Other Information - Summary Compensation Table” below. The basis for Mr. Ergen’s recommendation with respect to each of the other NEOs is discussed below. The Board of Directors accepted each of Mr. Ergen’s recommendations on annual base salaries for each of the other NEOs.

Mr. Swieringa. Mr. Swieringa’s annual base salary was increased from $750,000 to $900,000 effective December 25, 2021 in connection with his promotion to President and Chief Operating Officer, Wireless.

Mr. Cullen. In determining Mr. Cullen’s 2022 annual base salary, Mr. Ergen subjectively determined that Mr. Cullen’s existing base compensation of $750,000 was already within the range of market compensation indicated in the Proxy Data in light of DISH Network’s practices with respect to annual base salaries and therefore an increase over Mr. Cullen’s 2021 annual base salary was not necessary.

Mr. Orban. Mr. Orban’s annual base salary was increased from $550,000 to $650,000 effective June 26, 2021. In determining Mr. Orban’s 2022 annual base salary, Mr. Ergen subjectively determined that Mr. Orban’s existing base compensation was already within the range of market compensation indicated in the Proxy Data in light of DISH Network’s practices with respect to annual base salaries and therefore an increase over Mr. Orban’s 2021 annual base salary was not necessary.

2022 Cash Bonuses.

Consistent with prior years, Mr. Ergen generally recommended that other NEOs receive cash bonuses only to the extent that such amounts would be payable pursuant to the existing short-term incentive plan, if any. The Compensation Committee did approve a one-time discretionary cash award of less than $6,000 to Mr. Orban related to certain performance during 2022.

2022 Equity Incentives

With respect to equity incentives, DISH Network primarily evaluates the position of each NEO to ensure that each individual has equity incentives at any given time that are significant in relation to the NEO’s annual cash compensation to ensure that the NEO has appropriate incentives tied to the performance of DISH Network’s Class A Shares. This determination is made by the Compensation Committee primarily on the basis of Mr. Ergen’s recommendation. As discussed above, in granting awards to the other NEOs for 2022, Mr. Ergen based his recommendation on, and the Compensation Committee took into account, among other things, what was necessary to retain our executive officers and to align the interests of our executive officers and shareholders.