Sprint CEO to take pay cut as iPhone costs pinch

Fri May 4, 2012 7:57pm EDT

Dan Hesse, CEO of Sprint Nextel Corporation delivers his keynote address at the Cellular Telecommunications Industry Association (CTIA) Enterprise & Applications event in San Diego, California October 11, 2011. REUTERS/Mike Blake

Dan Hesse, CEO of Sprint Nextel Corporation delivers his keynote address at the Cellular Telecommunications Industry Association (CTIA) Enterprise & Applications event in San Diego, California October 11, 2011.

Credit: Reuters/Mike Blake

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(Reuters) - Sprint Nextel chief Daniel Hesse said he would take a cut in pay this year, after coming under fire from some shareholders disappointed with the hit the company's results took from subsidizing Apple's popular iPhones.

Hesse said his 2012 salary would be cut to repay about $346,000 in incentive pay that he has already received and forfeit additional amounts that he was eligible to receive under his 2011 and 2012 incentive plans.

"These voluntary actions regarding my personal compensation, which total $3,250,830, will eliminate any benefit for me to the discretionary adjustment the compensation committee made earlier this year," Hesse said in a letter to the company's human resources department.

The CEO said his actions would set his 2012 incentive compensation target opportunities back to 2010 levels.

Sprint's massive $15 billion bet on selling Apple's iPhones has not gone too well with investors, disappointed that the high subsidies on the device had pushed up costs at the No. 3 U.S. operator, even as it added more subscribers.

Sprint, which started taking iPhone orders on October 7, pays Apple a subsidy that is 40 percent higher, or $200 more per device, than what it pays for other phones.

(Reporting by Siddharth Cavale in Bangalore; Editing by Bernard Orr)

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Comments (1)
BeauBarker wrote:
Better than the alternative – losing his multi-million dollar job. I, for one, am getting a little weary of “subsidizing” Hesse’s bad business decisions. Premium data anyone? WiMax 4G dropped, no WiMax 4G in MOST ALL cities and with how may subs with recent WiMax 4G device purchases? I only use about 1GB a month on my Motorola Photon 4G – mainly becuase the network speeds are so freakin’ slow that I’ll deliberately seek out WiFi to make a connection. But, hey, it’s “truly unlimited.” The on-boarding of Apple iPhone (a product for the mindless consumer) is just another example and reason the Board and Investors should be calling Hesse’s resignation. Shareholders beware – our stock value is already sub $3.00 USD – how much lower can it go..?

May 07, 2012 8:40am EDT  --  Report as abuse
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