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Hesse's pay skyrockets in 2013 to $46 million

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While AT&T and Verizon dominate the industry and T-Mobile has been receiving consumer adoration for doing things a little bit differently, Sprint has been struggling to not only keep users, but build a decent network and brand identity. Most LTE tests place Sprint at the very bottom of the barrel in speed and latency, and the company always seems to be promising that a great network is just around the corner.

 

With Sprint flailing, it's apparently a perfect time for Sprint CEO Dan Hesse's pay to skyrocket. According to recent SEC filings, Hesse's pay ballooned from $11 million in 2012, to more than $46 million in 2013. Why? Because the company was so "successful" last year:

The carrier notes in its SEC filing that 2013 was "one of the most eventful years in Sprint's history." Last year SoftBank completed its $21.6 billion purchase of 80 percent of Sprint, Sprint bought partner Clearwire, shut down its Nextel iDEN network and started deploying its tri-band LTE Sprint Spark service.

 

Hesse's $46 million in 2013 compensation tops AT&T (CEO Randall Stephenson made $23.24 million), Verizon (CEO Lowell McAdam made $15.82 million in 2013) and presumably T-Mobile (who hasn't filed their SEC docs yet).

 

http://www.dslreports.com/shownews/Sprint-CEO-Pay-Balloons-Despite-Companys-Struggles-128598

 

 

http://www.fiercewireless.com/story/sprint-ceo-hesses-compensation-balloons-11m-2012-49m-2013/2014-04-16?utm_source=Twitter&utm_medium=Editor&utm_campaign=SocialMedia

 

http://www.sec.gov/Archives/edgar/data/101830/000010183014000012/sprintcorp201310-k.htm

Edited by COZisBack
Edited for copyright protection.

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Why is the writeup that got copied into your post so snarky and anti-Sprint?

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He managed the buyout by SoftBank, the purchase of Clearwire while running Network Vision. Why is this a surprise? Customer dissatisfaction with Sprint is almost completely because of the network. Which is being taken care of. If Masa is concerned about Hesse's pay, he will take care of it.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

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Why is the writeup that got copied into your post so snarky and anti-Sprint?

Check with @KarlBode.

 

Honestly, I don't think paying a CEO $46 million a year while his network's performance has been consistently last in every possible metric over the past few years is gonna be welcomed with a friendly high five by general public.

 

Did he close two major deals last year? Absolutely. But he also kept the guys in charge of network disaster for way too long, really until Masa came in and started trimming the fat. 

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Check with @KarlBode.

 

Honestly, I don't think paying a CEO $46 million a year while his network's performance has been consistently last in every possible metric over the past few years is gonna be welcomed with a friendly high five by general public.

 

Did he close two major deals last year? Absolutely. But he also kept guys in charge of network disaster for way too long, really until Masa came in and started trimming the fat. 

Seconded. And for the results and expectations of 2014, what is his paycheck going to go up? LOL no. He got lucky and got huge paychecks. Let's hope it motivates him to work 10x as hard to get Sprint where it SHOULD BE (way the hell away from T-Mobile)

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This is no surprise, Hesse has done a great job as CEO of Sprint.  If it wasn't for Hesse where would Sprint be today, possibly bankrupt or folded into another wireless provider, we will never know thanks to Mr. Hesse.  He has implemented ongoing network vision operations, improved network performance, deployment of LTE, secured cash flow through SoftBank, the list goes on and on.  

 

As a small business owner I get paid more based on my own growth and performance just as Mr. Hesse, why shouldn't he get a raise.  He has a obligation to make shareholders money and he is doing that. 

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Check with @KarlBode.

 

Honestly, I don't think paying a CEO $46 million a year while his network's performance has been consistently last in every possible metric over the past few years is gonna be welcomed with a friendly high five by general public.

 

Did he close two major deals last year? Absolutely. But he also kept the guys in charge of network disaster for way too long, really until Masa came in and started trimming the fat.

It probably is automatic based on the metrics of his contract. I don't think he would have received it otherwise. We always say in my business 'you make your best deal going in.' Network performance is probably not one of the metrics. However, churn or customer counts probably are. But just one of many factors. Last year was a huge year for Sprint. Let's see what 2014 think of Dan Hesse's leadership. Masa is the judge.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

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Why is the writeup that got copied into your post so snarky and anti-Sprint?

 

That's just Karl Bode's way. Everything he writes about Sprint (and to be fair AT&T and Verizon as well) is that way. On the other hand, comes up all roses when he writes about T-Mobile and that was the case even before the 'uncarrier' thing started. 

 

This article goes a bit more in depth:

 

http://www.kansascity.com/2014/03/07/4873870/sprint-ceo-dan-hesse-had-a-49.html

 

The biggest chunk of his pay — $34 million, about 70 percent — came as Sprint stock, restricted as to when Hesse can sell it, and options to buy more shares of the wireless company.

 

Roughly half of those shares and stock options were meant to convince Hesse to stick around for at least five years under SoftBank’s rule, what the company calls a “retention award.” He won’t collect unless he’s still there when the awards “cliff vest” the day after his employment contract runs out in mid-2018.

 

“In effect, there’s no value (to Hesse) until that occurs,” said Paul R. Dorf, managing director of Compensation Resources Inc. in New Jersey.

 

“I don’t think Hesse’s package is abnormal. It is very large, there’s no question about that, but it’s also for five years.”

 
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I take Robert's position.  Look at where Sprint was two years ago versus today.  For us on S4GRU, we know that when the new network is fully opertional, Sprint will become the flagship of the US wireless industry, not the bottom feeder that many believe it to be.  Mr. Masa will make it so...

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Our CEO just got a 74% raise after pissing off the SEC. ;) You don't see me complaining. :lol:

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Most of it was stock? Well, this is much ado about nothing then.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

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Most of it was stock? Well, this is much ado about nothing then.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

And half of the stock and options are useless until mid-2018.

 

Sent from my SM-N900P using Tapatalk

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And half of the stock and options are useless until mid-2018.

 

Sent from my SM-N900P using Tapatalk

Then these articles are grossly misleading. They probably even compared the VZW and ATT cash payout compensation versus Sprint CEO all benefits in. Maybe not even an apples to apples comparison.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

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If I recall correctly (and if I'm wrong please correct me on this) from whichever article I was looking at last night, Hesse's actual salary is less that of the big 2's CEOs. Which makes all these articles emphasizing the stock part of the equation so much disingenuous at best.

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Then these articles are grossly misleading. They probably even compared the VZW and ATT cash payout compensation versus Sprint CEO all benefits in. Maybe not even an apples to apples comparison.

 

Robert via Samsung Note 8.0 using Tapatalk Pro

 

If I recall correctly (and if I'm wrong please correct me on this) from whichever article I was looking at last night, Hesse's actual salary is less that of the big 2's CEOs. Which makes all these articles emphasizing the stock part of the equation so much disingenuous at best.

 

Fair and accurate articles? That is not what journalism is about anymore....  :wall:

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Seconded. And for the results and expectations of 2014, what is his paycheck going to go up? LOL no. He got lucky and got huge paychecks. Let's hope it motivates him to work 10x as hard to get Sprint where it SHOULD BE (way the hell away from T-Mobile)

 

I don't think Mr. Hesse is the one sniffing the back side of the clown's shorts....

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Fair and accurate articles? That is not what journalism is about anymore....  :wall:

Karl is not a journalist; he is a "blogger." His stances on Net neutrality and competition are appropriate, but most everything else is Sturm und Drang. That is his modus operandi.

 

AJ

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Karl is not a journalist; he is a "blogger." His stances on Net neutrality and competition are appropriate, but most everything else is Sturm und Drang. That is his modus operandi.

 

AJ

 

Point taken, unfortunately most readers though wouldn't know the difference between a blogger and journalist either.

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The pay speaks volumes about the expertise that Son (and the prior sprint board) feel Hesse brings to the table as well as his value to other companies and compensation he may be offered elsewhere.  Journalists and spectators can ballyhoo all they want about the prior financial health of the old Sprint, but Sprint is now a mere subsidiary of Softbank and the money paid to Mr. Hesse is Son's money, not Sprint's. Son is free to pay Hesse and crew as much of as little as he wants 

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The money paid to Hesse was not at the discretion of Masa most likely.  This was probably in his contract for a long time.  It is stock and it is similar to the type of stock that many employers give their employees.  From what it sounds like he was given restricted stock.  If he is terminated then he will not see this pay as the stock will not have vested.  Remember, Sprint was almost a penny stock not that long ago.  The company has gained a lot of steam, but it still has a long way to go.  CEO pay should, and for the most part is, be tied to company performance.  It still irks me that the Borders CEO made off with millions while driving that business into the ground.

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Check with @KarlBode.

 

Honestly, I don't think paying a CEO $46 million a year while his network's performance has been consistently last in every possible metric over the past few years is gonna be welcomed with a friendly high five by general public.

 

Did he close two major deals last year? Absolutely. But he also kept the guys in charge of network disaster for way too long, really until Masa came in and started trimming the fat. 

Maybe so. But it is not for the public to decide. Unlike congress a CEO cannot give himself a pay raise. That is the domain of the Board of Directors.

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Maybe so. But it is not for the public to decide. Unlike congress a CEO cannot give himself a pay raise. That is the domain of the Board of Directors.

Of course not, but they do have the power to express their (strong) opinion using their web sites that generate decent traffic.

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So we have to ask.. if the headline had read " Sprint CEO's pay is slashed, less than competitors" would that have caused the media or the public to look for favorably on Sprint's network or caused someone to stay or start new service? If what happened carries a negative effect with perception, does the inverse cause something better?

 

Sent from my SM-N900V using Tapatalk

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I'm sure Hesse's pay has already been less than Randal's and Lowell's, but the reaction was tripped due to the extraordinary increase, especially considering that lately the operator hasn't been doing so proportionally well.

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