Sprint Corp. has named Marcelo Claure, a Bolivia native, businessman and Sprint director, as its president and chief executive officer effective Aug. 11. He succeeds Dan Hesse, who came to the company in December 2007 as it was shedding customers and money.
Claure, 43, is the founder and chief executive of Brightstar Corp., which like Sprint is a subsidiary of SoftBank Corp. Tokyo-based SoftBank acquired control of both companies last year.
In the announcement, SoftBank founder and Sprint chairman Masayoshi Son called Claure “a successful entrepreneur who transformed a start-up into a global telecommunications company.”
Son cited Claure’s management experience and his “passion and drive” to build a better wireless network.
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He also hinted at unconfirmed reports that Sprint has dropped its plans to acquire T-Mobile US Inc. in the face of potentially stiff opposition from federal regulators.
“While we continue to believe industry consolidation will enhance competitiveness and benefit customers, our focus moving forward will be on making Sprint the most successful carrier,” Son said in the announcement.
Sprint shares fell $1.31, or 18 percent, at the open of trading at $5.97. T-Mobile shares were down $2.94, or 8.7 percent, at $30.97.
Claure will resign from Brightstar and SoftBank will buy his remaining holdings in the company. Sprint said he will relocate to the Kansas City area and work at Sprint’s headquarters in Overland Park.
Hesse, who is 60, said in the announcement: “I’m proud of the resilience of Sprint’s people during a difficult transformation and I’m optimistic about how they will build on a foundation of innovation to succeed in the future.
“It’s been an honor to have led such dedicated teammates for more than six-and-a-half years. Marcelo (Claure) has been a great addition to Sprint’s board and his entrepreneurial background, business savvy, industry experience and strong relationship with Masayoshi Son make Marcelo an excellent choice to lead Sprint going forward.”
Sprint will pay Claure $1.5 million a year in salary, on top of a $500,000 signing bonus, and provide potential performance-based bonuses that could be twice his salary or larger, according to a company filing with the Securities and Exchange Commission. He also will receive potential stock and options awards worth $24 million when granted to him, the filing said.
Hesse, routinely the highest-paid CEO among Kansas City area public companies, was paid $1.2 million salary last year as part of a total compensation package valued at up to $49 million. Some of that included a hefty retention bonus, whose status is unknown.
Sprint’s announcement said Claure’s priority will be to continue improving Sprint’s wireless network and maintain a competitive offer in the market.
The network has nearly completed an equipment overhaul but still lags others in its speed for streaming video, downloading apps and many of the other features that make smartphones popular. Sprint’s network plans include beefing up the network from here until, in late 2015, it will surpass the speeds of its rivals’ networks.
In the announcement, Claure said Sprint would “focus on becoming extremely cost efficient and competing aggressively.”
Like Son, he suggested that a T-Mobile deal is off the table at least for now. “While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint,” he said in the announcement.
Hesse reigned over Sprint’s long struggles to overcome service and technical problems as its 2006 merger with Nextel Communications went badly awry. He steadfastly focused on improving customers’ experiences, boosting the Sprint brand and husbanding the company’s limited cash resources.