Sprint CEO Gives $3.25M Back to Company After Upsetting Shareholders in iPhone Deal
May 8, 2012 10:44 AM
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Sprint CEO Dan Hesse
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.
Kansas City Business Journal
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RE: Not Much Discount Considering the Volume
5/8/2012 4:11:24 PM
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.
RE: Not Much Discount Considering the Volume
Dr of crap
Dr of crap
5/9/2012 8:57:26 AM
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!
"If you mod me down, I will become more insightful than you can possibly imagine." -- Slashdot
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