Business

Sprint CEO Dan Hesse’s $49 million pay package should be opposed, advisory group tells shareholders

Staff and news services
Sprint CEO Dan Hesse got a special $18.7 million “retention” award in connection with SoftBank Corp. of Japan buying 70 percent of Overland Park-based Sprint Corp. last year. That helped put his pay package above three times the median pay for a CEO of a comparable company, Institutional Shareholder Services said.
Sprint CEO Dan Hesse got a special $18.7 million “retention” award in connection with SoftBank Corp. of Japan buying 70 percent of Overland Park-based Sprint Corp. last year. That helped put his pay package above three times the median pay for a CEO of a comparable company, Institutional Shareholder Services said. Michael Sohn The Associated Press

Institutional Shareholder Services, a leading shareholder advisory firm, is telling shareholders to protest Sprint CEO Dan Hesse’s $49 million 2013 pay package, saying it’s excessive and not tied to performance.

Hesse got a special $18.7 million “retention” award in connection with SoftBank Corp. of Japan buying 70 percent of Overland Park-based Sprint Corp. last year. That helped put his pay package above three times the median pay for a CEO of a comparable company, the advisory firm said.

Shareholders will vote on approving the executive pay package Aug. 6. The vote is only advisory, but boards take “no” votes seriously.

Sprint said in a statement Friday that it provides “market competitive compensation packages that tie a substantial portion of our executives’ compensation opportunities directly to the company’s performance to ensure compensation is aligned with stockholder interests.”

The company said its executive compensation reflects that 2013 was a “transformational year for Sprint — we closed transactions with SoftBank and Clearwire, shut down the Nextel network and neared the completion of a complex network modernization deployment.”

It’s not the first time Sprint has been criticized for Hesse’s pay. In 2012 he gave up part of his salary after shareholders complained that the compensation formula was tweaked to eliminate a reduction he would have taken for the earnings hit caused by initial sales of the iPhone. Phone companies sell smartphones at a loss, and the iPhone is more expensive than the competition.

Sprint is the No. 3 U.S. cellphone carrier, behind Verizon and AT&T. Last July, SoftBank bought a controlling stake in Sprint for $21.6 billion. Sprint is scheduled to release its latest quarterly financial results Wednesday.

This story was originally published July 25, 2014 at 2:43 PM with the headline "Sprint CEO Dan Hesse’s $49 million pay package should be opposed, advisory group tells shareholders."

Get unlimited digital access
#ReadLocal

Try 1 month for $1

CLAIM OFFER