Sprint CEO cuts $3.25 million from own salary


Sprint Nextel CEO Daniel Hesse said in a letter to the SEC that he would take a pay cut of $3.25 million dollars, effectively resetting his salary to 2010 levels (a humble $8.65 million per year).

The announcement comes on the heels of sour news about Sprint's $20 billion deal with Apple, brokered to boost service adoption by offering Sprint-enabled iPhones.

And while Sprint sold 1.5 million iPhones in the first quarter, adding 263,000 new subscribers to the network, the deal couldn't prevent a net loss of $863 million.

While Hesse hasn't commented directly as to the reason behind his pay cut, irate investors are likely behind the move.

Putting bucks back into the company coffers may turn the low tide of Sprint's equity, but it doesn't address the subsidy being paid to Apple for each iPhone sold (around 40 percent higher than other subsidy payments, or $200 per unit).

How Wall Street will interpret Hesse's sacrifice remains to be seen.

iPhone malaise

Earlier this year, Sprint committed to buying over 30 million next-generation iPhones as part of the $20 billion deal.

This agreement, a guaranteed short-term loss for Sprint, was established only months after the company posted a Q4 $1.3 billion net loss.

Sprint outperformed its competitors in Q1 2012 iPhone sales, dropping only 17 percent from holiday highs.

However, the lagging Nextel unit of the company's business combined with the high subsidy rates continued to plunge the company (and its investors) into iPhone debt.

The company, and Hesse, are now betting big on the presumed 2012 iPhone 5 release.

If the investments, salary cuts, and temporary losses are going to pay off, the bump to a next-generation device would be prime time for a come-back.

For now, investors gambling money on Sprint's Apple bid will have to settle for a gesture of good will from the benevolent boss; Sprint's fiscal finish line on this deal is still a good dash away.

Via Reuters, Engadget