NEW YORK, N.Y. – Institutional Shareholder Services, a leading shareholder advisory firm, is telling shareholders to protest Sprint Corp. 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 per cent of Sprint last year. That helped put his pay package above three times the median pay for a CEO of a comparable company, ISS says.
Shareholders will vote on approving the executive pay package on Aug. 6. The vote is only advisory, but boards take “no” votes seriously.
Sprint, which is based in Overland Park, Kansas, had no immediate comment on the ISS report.
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 this 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 the controlling stake in Sprint for $21.6 billion.