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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 5/9/2012 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.


“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs

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