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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 MrBlastman on 5/8/2012 5:26:19 PM , Rating: 2
Given that he's earned over 51,738,000--Fifty One Million in compensation over the last five years, 2.89 million is a pittance, or 5.6% of the total sum. It's peanuts to him.

I'm not being crazy here, I'm being realistic.

From a morale standpoint, few will use the amount of analytics I use on a daily basis with what I do so they will simply chalk it up as a great samaritan measure. When you put all the numbers together and look at it objectively, you can see the truth in it.

2.89 million bucks isn't preserving that many jobs. If you average the typical engineer's pay at 40k/year, that means they have saved 72.25 jobs. Sprint employs 40,000 employees, so 72.25 jobs works out to be 0.18% of their workforce.

Morale is important but I want to see some real suffering on his part, not just a figurative gesture.


RE: You gotta like Hesse
By Reclaimer77 on 5/9/2012 1:25:02 AM , Rating: 2
quote:
Morale is important but I want to see some real suffering on his part, not just a figurative gesture.


Wow. Okay let's make him walk on hot coals or hell, just commit sephiku and kill himself for his dishonor!

The guy made a bad decision. A decision that was supported by lots of other people there too, a point which has gotten lost in all this. It seems like you want to see him crucify himself for it. Ridiculous. Real suffering for taking a risk that didn't pan out? Come on.

quote:
Given that he's earned over 51,738,000--Fifty One Million in compensation over the last five years, 2.89 million is a pittance, or 5.6% of the total sum. It's peanuts to him.


Biased math much? Assuming he made $10,347,600 this year, that measly $2.89 million represents him giving back 27% of his yearly income. But yeah you're right, he's rich so it's no big deal losing over a quarter of your income voluntarily lol. Are you serious with this?


RE: You gotta like Hesse
By MrBlastman on 5/9/2012 11:13:00 AM , Rating: 2
quote:
Biased math much? Assuming he made $10,347,600 this year, that measly $2.89 million represents him giving back 27% of his yearly income. But yeah you're right, he's rich so it's no big deal losing over a quarter of your income voluntarily lol. Are you serious with this?


I base my view off of other fundamental math itself, actually. In society, as I view it, there is an average "lifestyle sustainability quotient" that is required to meet the bare necessities in life--to stay alive--while not being in poverty.

Thinks such as food, water, a roof over your head, insurance etc. The stuff that is required to live. For a four person family unit consisting of a father, mother and two kids, this works out to be somewhere between 40k-60k/year depending on where you live. Beyond that level, anything else is a "luxury," something not needed to live.

This quotient doesn't scale 1:1 as you rise up in pay. No, it starts to fall off. Double your household income and now it might be 75% of that 80-120k, double it again and it might only be 50% of the 160-240k--and so on. The quotient decreases when the gross pay starts to scale up tremendously.

So, we can't look at his pay in the same percentages as our own. If your pay or mine was cut by 25%, it'd probably hurt, a lot--due to how close we are to that sustainability quotient. For him, though, unless he's made stupid decisions and spent every dime he's earned (I guarantee you he hasn't) and lives in mega mansions (he might), he can afford to take a short-term hit for making a colossal blunder as his quotient is widely dislocated from his pay.

If you play high stakes poker, you have to be willing to deal with not only winning the pot, but losing everything as well. CEOs, if they pay themselves obscene amounts, are playing that high stakes game. The difference here is the chips aren't dollars, but the number of jobs that have underneath them that are at stake.


RE: You gotta like Hesse
By goodsyntax on 5/9/2012 1:54:39 PM , Rating: 2
While your math may be correct (I didn't double check-it), I am sure that every one of those 72.25 families would disagree that what he did was a pittance, or peanuts.

Before you write-off the gesture, noble or otherwise, that is real money, and likely more than most folks would see in their entire lifetime. Yes, his compensation is pretty good, but unlike his cohorts at AT&T or Verizon, he (at least on the surface) seems to care about the employees that work for him. It may only be a drop in the bucket, and a small percentage of his 5 year comp, but a VOLUNTARY 5.6% pay-cut is significant, no matter what your tax bracket may be.

Why can't you just say that you are not impressed with the gesture and leave it at that? Many, myself included, feel that it is just a glimpse at the man behind title. Many CEOs in similar situations would not even consider the same course of action, instead choosing to point the finger, spin the debate or deflect the criticisms. Instead, he chose to face it head-on, atone in a meaningful way and say in the most basic way possible "it didn't work out the way we thought it would." Can't be more accountable than that.

At the end of the day, he has proven himself to be more accountable and more credible because of the way he handled this whole situation. No excuses, just an "I screwed up and I'll take a pay cut because of it" gesture. Too bad all CEOs can't behave the same way.


"Intel is investing heavily (think gazillions of dollars and bazillions of engineering man hours) in resources to create an Intel host controllers spec in order to speed time to market of the USB 3.0 technology." -- Intel blogger Nick Knupffer

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