Sprint Nextel's CEO is getting a big bonus for 2008, despite the fact that the beleaguered cell phone operator is still losing customers.
A proxy filing with the Securities and Exchange Commission filed this week shows that CEO Dan Hesse will receive a bonus of $2.6 million for 2008, which is about 30 percent higher than his targeted payout, according to The Wall Street Journal. Hesse's total compensation package is valued at $15.5 million, including a base salary of $1.2 million and equity grants.
The proxy also indicates that Hesse received additional corporate perks valued at around $288,000, including a $173,801 contribution to his 401(k); $91,462 for security; and $21,965 for other expenses that included use of the corporate jet.
Hesse also has a pretty nice golden parachute that guarantees him about $10.1 million if he is terminated without cause. And if the company is bought and he is booted as CEO, Hesse stands to gain $10.7 million, according to the filing.
Hesse's hefty bonus and compensation package come at a time when Sprint is unprofitable and still losing customers. For 2008, the company reported a net loss of $2.8 billion and a loss of some 4.6 million customers.
Hesse, 55, took over as CEO at the end of 2007 after the company forced out its previous CEO. From the start, Hesse has had an uphill battle. The company has steadily been losing customers as subscribers complain of poor service. And it faced one of the worst reputations for customer service in the cell phone industry.
Hesse has concentrated a lot of time, effort, and money to improving the company's customer care and public image. He has even appeared as the star in several Sprint commercials as the company tries to reshape its image.
A Sprint spokesperson told The Wall Street Journal that Sprint has seen some improvements under Hesse. Some of these improvements include increased customer call resolution, $1 billion in cost cutting, and renegotiated credit agreements that will provide Sprint more financial flexibility.