Institutional Shareholder Services (ISS) is protesting Sprint CEO Dan Hesse’s 2013 pay package totaling $49 million.
ISS in particular is pointing toward an $18.7 million special equity award which it said was not tied to “any performance criteria.” The firm also said performance goals were not disclosed for a $16.7 million equity award.
ISS said Hesse’s compensation was three times that of average pay that his CEO peers received. The firm is advising Sprint shareholders to vote “no” on a non-binding resolution regarding executive pay.
In a proxy statement, Sprint said that it “provides market competitive compensation packages that tie a substantial portion of our executives’ compensation opportunities directly to the company’s performance to ensure compensation is aligned with stockholder interests.”
Sprint called 2013 a “transformational year,” citing the closure of transactions with SoftBank and Clearwire, the shutdown of the Nextel network and the near completion of its network modernization initiative.
The $18.7 million and $16.7 million equity awards are tied to restricted stock options and stock units Sprint awarded to Hesse as a means of retaining his services throughout the five year contract extension he signed in 2013.
It’s worth noting that the $18.7 million Hesse was awarded in 2013 will not vest or be paid out until 2018 and that a portion of the $16.7 million has not been vested or paid out yet either. Because the $18.7 million is tied to equity, the amount paid out when it vests in 2018 will be dependent on the stock price at that time, meaning it could be subject to change.
As the Wall Street Journal points out, SoftBank owns 81 percent of the voting shares so ISS’s recommendations aren’t likely to have an impact when the shareholder meeting takes place August 6.
SoftBank last year closed a $21.6 billion transaction to take control of Sprint, the U.S.’s third largest wireless service provider behind AT&T and Verizon Wireless.
Filed Under: Carriers
