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Sprint CEO Dan Hesse  (Source: technobuffalo.com)
Hesse returned the $3.25 million after previosuly excluding the financial effect of carrying Apple's iPhone when determining employee bonuses

Sprint Chief Executive Officer Dan Hesse has decided to return over $3.25 million after shareholders expressed concern with the company's recent move regarding employee bonuses and Apple's iPhone.

According to a filing with the Securities and Exchange Commission on Monday, Hesse returned the $3.25 million after previously excluding the financial effect of carrying Apple's iPhone when determining employee bonuses.

This move upset shareholders, so Hesse decided to return the money to the company.

"I do not want, nor does our Compensation Committee want, to penalize Sprint employees for the company's investment with Apple," said Hesse. "I'm hopeful that these actions will allow the company to remain focused on delivering the best overall customer experience in the wireless industry, which is what will serve the company best in the long run."

Sprint agreed to purchase 30.5 million iPhones for about $20 billion over a four-year period last year. In August 2011, Hesse reportedly told the Sprint board of directors that the company would likely lose on the agreement with Apple until 2014, but believed in the deal because he said iPhones were more profitable than others like Android-based phones. According to Hesse, iPhones have a "low churn rate" and iPhone users consume less data.

When the iPhone 4S first launched, which was Sprint's first iPhone, the carrier sold 1.8 million of the Apple smartphone. In Q1 2012, Sprint sold 1.5 million iPhones total.

"We applaud Dan for his willingness to sacrifice personal compensation in order to reduce any distraction that could negatively affect the morale and performance of the company," said Sprint Board Chairman James Hance Jr. "Dan enjoys the full support of our board of directors, and we appreciate the leadership he has demonstrated as he continues to guide the company through a turnaround in a difficult competitive environment."

Hesse's pay in 2011 was $11.9 million, including stock and option awards. Hesse said he plans to reduce his salary by $346,223 this year to pay back part of the iPhone bonus, and will give up $544,607 in future pay for last year's performance. The other $2 million that he's giving back will be in performance units that he was given in February.

Source: Kansas City Business Journal



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Not Much Discount Considering the Volume
By WalksTheWalk on 5/8/2012 12:00:02 PM , Rating: 2
So Sprint agreed to pay $655 for each iPhone. There's not much discount here given the volume commitment of 30M iPhones. Sprint must of felt like they had to do this to stay competitive with AT&T and Verizon.

I haven't seen any published numbers for Sprint for number of phone units sold per year, but I'm guessing they will have to sell all iPhones and no others to actually sell 30M iPhones.

Not good for Sprint.




By adiposity on 5/8/2012 2:26:52 PM , Rating: 2
They paid for the right to have the iPhone, as well. If it was just a price per phone, that would be different.


RE: Not Much Discount Considering the Volume
By abhaxus on 5/8/2012 4:11:24 PM , Rating: 3
If Sprint stays the same size with no gross adds due to iPhone subscriber gains, it would have to sell an iPhone to about 50% of its subscribers over the next couple years. That's not a bad number, and also there have definitely been people switching to Sprint because of the iPhone.

Love or hate the device (I personally hate it and the mentality of people who forgive all of its flaws), it's a huge seller. I had a woman the other day buy an android device (galaxy s2) and come back an hour later crying because her adult children all made fun of her for buying something besides an iPhone. There excuse was the iCloud allows you to share your photos instantly. I showed her Google+ and Google Drive and how they work on any platform, and she left semi happy. The mentality of iSheep is horrible.


By Dr of crap on 5/9/2012 8:57:26 AM , Rating: 2
crying because her adult children all made fun of her - and that my friends is how the world works!

A vast majority haven't grown beyond a high school level. I could care less what cell you buy or are using. I do have to admit if you have an iphone I'm sure you over paid for it, after all I can get a smart phone for FREE when I upgade.
People don't get it - It's just a frieaking cell phone! It shouldn't be ANYTHING else!


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