GLOBAL SIGNAL INC - Proxy Statement (definitive) (DEF 14A) Executive Compensation

In 2004, the Committee engaged in a review of the executive compensation program, seeking advice and input from Global Signal management as well as reviewing compensation data with respect to comparable public tower companies and real estate investment trusts. This review confirmed that our base salary and short-term incentive compensation program elements individually and in the aggregate support and reflect the compensation philosophy and strategic design priorities of the Company. With respect to long-term incentive compensation, at that time the Committee and the Company decided to migrate to a more extensive use of restricted stock as opposed to stock options, which the Company in fact utilized in 2005. This is due to the fact that, although, both stock options and restricted stock encourages employee focus on the Company’s growth and increased stock value, the use of restricted stock as an incentive has the added value of aligning executive compensation with growing dividends. Additionally, as a retention tool, restricted stock retains value to the employee irrespective of any movement in stock price. This encourages employees to remain with the Company during the restricted period and to continue to work to achieve the Company’s long-term goals for growth and profitability.

Total annual compensation for the Company’s executive officers consists of the following components:

The Committee believes that, while executive officers’ base salaries should reflect a variety of factors, including the circumstances surrounding the initial employment of the officer by the Company, the extent of an officer’s holdings of Company equities, and the role of the officer with respect to execution of the Company’s central strategies, the primary components of an officer’s compensation should be variable performance-based compensation.

The purpose of performance-based cash compensation is to motivate and reward eligible employees for their contributions to the Company’s performance for the applicable year. This is accomplished by making a portion of their cash compensation variable and dependent upon both individual and Company performance

during the applicable year. Performance metrics considered by the Committee may include adjusted EBITDA, adjusted FFO, cash flow, etc. Note, in some instances, an executive employment agreement may guarantee a particular bonus for a specified period of time.

The purpose of long-term incentive compensation is to align an employee’s long-term goals with those of the shareholders. The use of restricted stock encourages employee focus on the Company’s long-term financial growth and consequent shareholder value. Grants are generally based on Company and executive performance and include a multi-year ‘vesting’ schedule, which encourages retention of key employees and a focus on long-term growth of shareholder value.

In setting performance-based cash compensation and long-term incentive compensation awards for each executive officer, the Committee reviews the Company’s financial performance using a variety of metrics, including adjusted EBITDA, cash flows, adjusted FFO per share, dividends per share, etc., the officer’s employment agreement and executive compensation information derived from comparable public tower companies that compete with the Company. Generally, the Committee does not give any particular factor a specific weighting.

The Committee also believes that total compensation should be comparable to that of the Company’s primary competitors in order to recruit and retain talented executive officers who are key to the Company’s long-term success.

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Tax Code”), places a limit of $1,000,000 on the amount of compensation that the Company may deduct in any one year with respect to each of its five most highly paid executive officers. Certain performance-based compensation approved by shareholders is not subject to the option deduction limit. The Company’s shareholder-approved equity compensation plan is qualified so that awards under such plans constitute performance-based compensation not subject to Section 162(m) of the Tax Code. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the Committee has not adopted a policy that all compensation must be deductible.

In December 2005, the Committee reviewed with the Board of Directors the performance and employment agreements of the executive management of the Company for the purposes of determining the amounts of any cash bonuses, restricted stock or other benefits to be granted to members of management in return for the services they provided during 2005.

In accordance with the Company’s compensation philosophy, we analyzed several qualitative and quantitative factors when awarding compensation for fiscal 2005 in order to link financial reward to the annual and long-term performance of the Company. Following a review of the Company’s performance in 2005, including the successful completion of the acquisition of approximately 6,553 towers from Sprint Corporation, the completion of a secondary public offering of common stock, the success of the tower acquisition program and related financings, and improvements in important metrics such as stock price, adjusted EBITDA, cash flows, adjusted FFO per share, dividends per share, etc., and the review of the performance of each executive with respect to the Company’s performance in 2005, the Committee and the Board of Directors determined in December of 2005 to award to members of management certain amounts of restricted stock and cash bonuses based on the executive’s performance.

The Company’s compensation program is designed to promote the achievement of Company objectives and shareholder value. However, our Chief Executive Officer, Wesley Edens, who is also our Chairman and President, did not receive a salary, bonus or other form of incentive compensation as our Chief Executive Officer

in 2005 or 2004. Mr. Edens is also the Chairman of the Management Committee of Fortress Investment Group LLC, an affiliate of our largest shareholder, and benefits as CEO mainly from increases in the Company’s stock price and dividends paid on our common stock due to the significant holdings of our stock by himself personally and by Fortress Investment Group LLC and its affiliates, which holdings as of December 31, 2005 constituted approximately 44.2% of our outstanding common stock. As we do not pay Mr. Edens a salary or bonus nor award him incentive compensation personally, this Committee does not evaluate his performance with such ends in mind. However, Mr. Edens’ performance as CEO is separately evaluated by the Board of Directors for the purpose of determining whether the Company is meeting its objectives and desired results.

Attracting and retaining talented and motivated management and employees is essential in creating long-term shareholder value. Offering a competitive, performance-based compensation program with a significant equity component helps to achieve this objective by aligning the interests of management and other key employees with those of shareholders. We believe that the Company’s fiscal 2005 compensation program met these objectives.

COMPENSATION COMMITTEE

Mark Whiting, Chairman

Robert Gidel

David Abrams

Table of Contents

Table of Contents

Table of Contents