Sprint (NYSE: S) paid CEO Marcelo Claure nearly $21.8 million in total compensation for its fiscal year 2014, which ran until the end of March 2015, according to a Securities and Exchange Commission filing. The disclosure makes Claure among the highest-paid executives in the U.S. telecommunications sector and also places him above executives from Verizon Communications (NYSE: VZ) and AT&T (NYSE: T) on a pro-rata basis, since Claure only became CEO of Sprint in August 2014. [click to tweet]
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Sprint also disclosed via the filing that it paid former CEO Dan Hesse $10.51 million in total compensation for its last fiscal year. Hesse left Sprint last August and the carrier noted in the filing that "due to his departure from Sprint, Mr. Hesse received a prorated portion of his annual base salary of $1,200,000 based on the number of days he was employed during fiscal year 2014."
According to the filing, Claure received a signing bonus of $500,000 plus a bonus equal to 250 percent of his base salary, prorated for the number of days he was employed by Sprint during the last fiscal year in lieu of participating in the company's 2014 short-term incentive compensation, as per his contract.
Claure was already a billionaire who had headed wireless device distributor Brightstar before being tapped last summer by SoftBank CEO and Sprint Chairman Masayoshi Son to take over from Hesse.
In Sprint's last fiscal year, Claure received a base salary of $923,077, a bonus of $2,420,330, stock awards worth $10,571,397 and stock options worth a total of $7,746,242. Claure also billed Sprint $33,513 to use the company's private jet for personal use, and received $14,887 in tax equalization payments, $50,000 in legal fees and $39,017 to relocate with his family from Miami to Overland Park, Kan., where Sprint has its headquarters.
A Sprint spokesperson told the Financial Times it was difficult to make "apples-to-apples" comparisons between Claure's compensation packages with those of his peers at other carriers because it included one-time payments like the signing bonus.
AT&T CEO Randall Stephenson received a pay package in 2014 for $23.98 million, T-Mobile US (NYSE:TMUS) CEO John Legere received $18.57 million and Verizon Communications CEO Lowell McAdam got a package worth $18.3 million in compensation.
Claure has been tasked with returning Sprint to subscriber growth, especially in the postpaid market, and has made some progress on that front since he took the helm. In the calendar first quarter, Sprint added 1.2 million total customers, including 211,000 postpaid customers (though Sprint lost 201,000 postpaid phone customers). The carrier's postpaid churn fell sharply to 1.84 percent, down from 2.11 percent in the year-ago period and 2.3 percent in the fourth quarter. Some analysts think Sprint's positive momentum will continue in the second quarter.
Hesse, who led Sprint for nearly seven years and worked to reconstruct the network, received a total compensation package of $10,571,729. That included a pro-rated salary of $533,850, a total of 2,773,479 from Sprint's non-equity incentive plan, and $7,210,400 in other compensation. Most of that was related to his severance package.
"The amount disclosed for Mr. Hesse consists of $7,200,000 in severance payments upon termination of his employment, which was comprised of a lump sum payment of two times his annual base salary rate of $1,200,000 and two times his annual STIC plan opportunity of $2,400,000, pursuant to his employment agreement," Sprint noted.
Interestingly, the company also disclosed that former FCC Chairman Julius Genachowski has been nominated to be an independent Sprint board member. Sprint shareholders will vote on his nomination at the company's annual meeting on Aug. 7. "Mr. Genachowski's experience as a senior executive and director at Internet, media, and other consumer-facing and technology companies paired with his experience as former Chairman of the FCC provides our board with a valuable perspective on the business and regulatory environments in which our Company operates," the carrier said in the filing.
For more:
- see this SEC filing
- see this FT article (sub. req.)
- see this Multichannel News article
Special Report: The 10 highest paid CEOs in wireline in 2014
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