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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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RE: You gotta like Hesse
By The Raven on 5/8/2012 2:37:47 PM , Rating: 2
quote:
He's giving it back to try and save his job.
Did you read the part about his reasoning for this? He does not want the employees to take the hit for his decision. If he was my boss I'd like that very much. (circus show or not)

Personally I think the iPhone deal was bad. Really bad. Mostly because it was completely unneeded. But to be fair it hasn't panned out fully yet and I am not about to say that it is beyond the realm of possibility that Apple continues to sell. Other than that deal btw, Hesse seems like a good CEO. The simplified plan strategy was great in my opinion. Also I was a Sprint customer when he was brought on and I saw a night/day change in customer service that I doubt was coincidental, though I know nothing of the inner working of the company. From what I heard from employees was that he didn't care to fight over little charges and issues that could be settled for a couple bucks.
quote:
I have a proposal: If CEO's really think they are worth the millions they earn, they should put their money where their mouths are. They should have provisions in their contracts where if they fail to meet goals or cause a grossly negligent future impact on business, they should face instant termination with zero severance and forfeiture of prior year pay.
So you are saying that he should've kept the money? I'm confused. Which is more admirable (again, not necessarily Mother Teresa here but) giving something voluntarily or having it taken away?


RE: You gotta like Hesse
By MrBlastman on 5/8/2012 2:54:16 PM , Rating: 1
quote:
So you are saying that he should've kept the money? I'm confused. Which is more admirable (again, not necessarily Mother Teresa here but) giving something voluntarily or having it taken away?


No, not at all. He should terminate his employment with Sprint and fine himself last year's pay.

Why on earth would you pay 20 billion for a phone that is losing market share to Android? It makes no sense why Sprint did what they did.

Look, you do have a point that most CEO's wouldn't even cut their pay like he has; but from how I see it, it is far too little considering the size of the blunder he has created for the company.


RE: You gotta like Hesse
By aharris02 on 5/8/2012 3:51:02 PM , Rating: 2
quote:
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.


Sounds like three pretty solid reasons to want the iPhone on his network right there.

The outcome of Google vs Oracle could have some serious implications for carrier profits as well.


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