Sprint CEO to take pay cut as iPhone costs pinch

Fri May 4, 2012 8:36pm 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 (3)
GRRR wrote:
With losses like that, largely coming from a 40% larger subsidy just for the iPhone, you know who’s paying the bills…

Android users.

And in turn, Apple’s turning double-digit profit growth on the backs of Android users.

Apple’s the unscrupulous bank signing carriers for mortgages they can’t afford, and Android users are the ones bailing out the carriers.

May 05, 2012 6:10pm EDT  --  Report as abuse
jscott418 wrote:
Isn’t it funny how Apple is the only one making money off its products. It manages to convince consumers to shell out for their products, Chinese to make its products cheap, retailers like Best Buy to give up prime store space, cell phone companies to subsidize the iPhone and yet everyone seems to complain about profits except Apple. One has to wonder if how much longer sellers of Apple products will think Apple is so great for them?

May 05, 2012 9:10pm EDT  --  Report as abuse
jk1122 wrote:
just because other company’s are willing to lower their profit margins or product quality does not mean apple is over charging. its not apples fault that all the other phone manufactures are willing to loose money to sell products. Remember also that apple support’s their own products while the carriers support the other manufactures products for the most part.

May 06, 2012 2:49pm EDT  --  Report as abuse
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