CEO

Sprint Nextel CEO got $9.1M pay package in 2010

AP News
|
Posted: Mar 28, 2011 10:03 PM
Sprint Nextel CEO got $9.1M pay package in 2010

Sprint Nextel Corp. President and CEO Daniel R. Hesse received total compensation valued at $9.1 million last year, a 26 percent drop from what he received in 2009, according to an Associated Press calculation of data filed with regulators.

Hesse, 57, received a salary of $1.2 million last year from the cellphone company, unchanged from the year before, according to documents filed with the Securities and Exchange Commission on Monday.

He also received stock awards valued at $1.7 million at the time they were granted, more than double the amount from a year earlier, and option awards valued at about $1.8 million on the day they were granted, down 80 percent from the year before.

Hesse's performance-based cash bonus surged by more than threefold from the prior year to about $4.4 million.

The company said improvements in customer experience metrics, number of net postpaid subscriber results and total net wireless subscriber additions in the fourth quarter of last year were among the factors that influenced the performance-based payments to Hesse and other executives.

Hesse also got perks valued at $15,002, down 65 percent from what he received in 2009.

The perks package was comprised of $7,579 for home security; $5,887 for personal use of company aircraft; and, $1,536 in contributions to 401(k) and deferred compensation plans.

Hesse did not receive a bonus for 2010, or in the prior two years.

His total compensation in 2009 was $12.3 million.

The AP formula for executive compensation is designed to isolate the value that the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.

The calculations don't include changes in the present value of pension benefits, making the AP total different in most cases from the total reported by companies to the SEC.

Overland Park, Kan.-based Sprint Nextel has been struggling to turn its business around and stem a steady loss in subscribers dating back to its acquisition of Nextel Communications Inc. in 2005.

In December, Sprint announced that it would start shutting down the Nextel network in 2013, and be done by 2015.

In the fourth quarter of last year, the cellphone company posted its first quarterly net gain of contract subscribers since December 2007, when Hesse was named CEO.

The subscriber gains come after big improvements in customer service, something Hesse has made central to his turnaround efforts.

The company ended 2010 with a total of 49.9 million subscribers, up from 48.1 million the year before.

Still, the company's losses deepened last year.

Sprint Nextel lost $3.5 billion, or $1.16 a share, in 2010. That compares with a loss of $2.44 billion, or 84 cents a share in 2009.

The company's full-year net operating revenue rose to $32.6 billion, from $32.3 billion the year before.

Sprint Nextel's stock price rose about 16 percent in 2010, climbing to $4.23 at the end of the year from $3.66 at the close of 2009.