* 90 pct of votes in favor of Hesse re-election
* Shareholders reject proposal for deferred compensation
* Sprint shares down 1 cent
By Carey Gillam
OVERLAND PARK, Kan., May 15 Sprint Nextel Corp
shareholders voted to re-elect Chief Executive Dan Hesse
as a director, defeating a push by one key shareholder to get
the executive off the wireless service provider's board of
According to Sprint, a preliminary count showed that 90
percent of votes cast were in favor of Hesse's re-election; the
percent of votes in favor of re-electing other directors ranged
from 98 percent to 89 percent.
The Ontario Teachers' Pension Plan, which has a roughly 4
percent stake in Sprint, said last week that it would vote
against Hesse's re-election.
Hesse has come under fire this year from shareholders
disappointed with the hit the company's results took from
subsidizing Apple Inc's popular iPhones and other
investments the company is making.
In response to a shareholder question about iPhones, Hesse
acknowledged that iPhones comes with a higher upfront cost to
Sprint than other devices but he argued that it will help its
financials in the longer term.
"We believe in the long term," Hesse told shareholders,
adding that iPhone customers stay with Sprint longer. "Over time
we will make more money on an iPhone customer than we will from
The executive also pointed to customer losses at No. 4 U.S.
mobile provider T-Mobile USA, a unit of Deutsche Telekom
. T-Mobile USA is the only one of the top four U.S.
operators that does not sell iPhones.
"If you've any doubts look at T-Mobile USA," he said.
While a shareholder proposal for deferred compensation was
rejected, some shareholders said at the meeting they were
concerned about Sprint's compensation plan, which bases some
executive pay on short-term incentives.
A representative for the American Federation of Labor and
Congress of Industrial Organizations, which made the deferred
compensation proposal, said he applauded Hesse's pay cut. But he
told shareholders: "We continue to be concerned the short term
incentive plan will encourage executives to take on risks."
Hesse said earlier this month he would take a pay cut.
Sprint shares were down 1 cent at $2.49 on the New York
Stock Exchange in early afternoon trade.