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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 TSS on 5/9/2012 9:03:58 AM , Rating: 2
quote:
Simple logic dictates that, for obvious reasons, your idea of proportional compensation would cause an unsustainable increase in the cost of operations.


Your logic is flawed. If the increase in CEO pay was distributed amongst workers in a 1:1 fashion, then the total expenditures on salary for the company would stay the same. It's different people recieving the money, not more money being handed out. In fact one could argue that the more money the workers have the more financial stability they will be able to achieve, the happier they are. And happy workers are productive workers.

quote:
I just generally don't like to indulge in such thoughts because they lead to a class warfare Marxist mentalit


No, the trick is to enduldge in those thoughts and *form your own oppinion*. I've asked myself alot of times wether it's right or not that 22 people chasing a ball get paid so damn much. And the awnser is yes, because people desire to see 22 people chasing a ball to the extent that much more money can be made off the sport then the individual players ask. I'd imagine some of the more hardcore supporters only buying products from companies that support their team, and try to convince others of the same to name just one thing.

In other words, if it wasn't sustainable, it wouldn't happen. I remember reading about some transfers being cancelled in 2008 due to the economic crisis. Guess they had to ask for less money after that.

Dealing with those thoughts in an orderly fashion lets you deal with more thoughts, and question your own beliefs. If you don't question your own beliefs, how the heck do you know that they are true? Because somebody else told you so? I'm sure you can see the folly of that.

It's important because it lets you see things like the current corruption in the definition of capitalism. Capitalism was ment as a system to deal with the value of things, what everything is worth. Currently, we've set that value at "whatever people are willing to give for it". This is wrong. Just because somebody pays a billion for a toilet roll, doesn't mean it's actually valued at a billion dollars. If money dissapears, then a toilet roll will not get you the equivalent of a billion dollars in gold in exchange for it.

Just this change in distinction is the cause of alot of problems today, including CEO pay disrepancies. They get the maximum what the company will pay for them, rather then what their services are actually worth.


RE: You gotta like Hesse
By Reclaimer77 on 5/9/2012 10:36:01 AM , Rating: 2
Your premise is flawed. The "worth" of a position is decided by the market. If you decide that someone is being paid more than they are "worth", you have to back that up with some kind of objective comparison. But there is none, so you're in fact making a SUBjective statement. In your heart you feel someone is making too much, but that's all it is, a feeling.

quote:
No, the trick is to enduldge in those thoughts and *form your own oppinion*.


I don't know why you are talking down to me. I've clearly formed my own opinions and have a clear sense of right and wrong.

quote:
If you don't question your own beliefs, how the heck do you know that they are true? Because somebody else told you so? I'm sure you can see the folly of that.


What does this have to do with this? Again with the condescending. Of course I question my beliefs, I'm human aren't I? What the hell...

This isn't about beliefs anyway. CEO's, like any other person, have a right to whatever salary and compensation they can earn on the open market. All of us do this, we want the highest pay and benefits we can get. Don't we? But when a CEO does this he's "greedy" and should instead distribute his salary to all employees 1:1! I seriously refuse to indulge such an absurd notion.

quote:
Capitalism was ment as a system to deal with the value of things, what everything is worth.


Capitalism is the concept of a privately owned and operated economic system. With the emphasis on the profit motive. You have some big flaws in your logic here:

quote:
Currently, we've set that value at "whatever people are willing to give for it". This is wrong. Just because somebody pays a billion for a toilet roll, doesn't mean it's actually valued at a billion dollars.


Lots wrong here. If the price of goods and services were only what the product was "worth", manufacturing would cease because there would be no profit at all. Obviously you have to prices goods more than they are "worth" if you expect to run a business. And yes, what something is worth is exactly what people are willing to pay. That IS a major tenant to Capitalism.

quote:
If money dissapears, then a toilet roll will not get you the equivalent of a billion dollars in gold in exchange for it.


Cars aren't "worth" $40k. There's maybe $5k worth of metal and plastic/electronics put into them. But we pay that much because they are worth it to us. And just like the "billion dollar toilet roll" they depreciate. Things like "value" and "worth" are decided by the buyer, not you.

You're trying to apply a subjective value measure to CEO pay, but that's just not how it works.


RE: You gotta like Hesse
By WalksTheWalk on 5/9/2012 1:59:13 PM , Rating: 2
Yes you have it right. In a capitalist system something/someone is only worth, dollar wise, what someone is willing to pay for it. The personal worth of something/someone is completely subjective and varies from person to person.

Having said that, when it comes to some CEOs (not all), there is still a boys club where they sit on the boards of each others companies and approve outrageous compensation above and beyond what any other company would pay, all things being equal. The stock market doesn't typically punish companies who do this as long as they are posting profits and generally doing an OK job (not even good, just OK).

It's the SEC that should be addressing this type of collusion-style board room.


RE: You gotta like Hesse
By WalksTheWalk on 5/9/2012 2:02:04 PM , Rating: 2
Whoops, hit wrong reply link. Doh!


RE: You gotta like Hesse
By The Raven on 5/10/2012 9:31:18 AM , Rating: 2
quote:
It's the SEC that should be addressing this type of collusion-style board room.
https://upload.wikimedia.org/wikipedia/commons/7/7...

Yeah... like the guys at the SEC have no ties to Wall St.


RE: You gotta like Hesse
By The Raven on 5/10/2012 9:36:34 AM , Rating: 2
You guys are going back and forth on CEOs compensation when, as R77 pointed out, you have no power over that. Before you even think of worrying about that, you should worry (to a MUCH higher degree) about the money and especially power that politicians have. You actually can/should do something about that.

I hope you all can agree on that.


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