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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 WalksTheWalk on 5/9/2012 2:01:03 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.


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