Sprint CEO received $16.4 million in '03
Wednesday, March 17, 2004
KANSAS CITY, Mo. -- Gary Forsee, chairman and chief executive officer of Sprint Corp., received more than $16.4 million in compensation last year, including $12.8 million in restricted stock, according to a Tuesday filing with the Securities and Exchange Commission.
Forsee, a 1968 graduate of Cape Girardeau Central High School, received an $813,410 salary and more than $2.5 million in bonuses, including Sprint's reimbursement of $500,000 he forfeited when he left Atlanta-based BellSouth Corp. last March to lead Overland Park, Kan.-based Sprint, according to the proxy statement for the company's annual shareholders meeting.
Forsee received more than $12 million in restricted shares of both of Sprint's tracking stocks -- FON for its traditional "wired" business and PCS for its wireless business. Sprint also gave Forsee options to buy more than 1.4 million shares of stock.
Former CEO William T. Esrey's compensation in 2002 -- the last year in which he led the company -- was $2.28 million.
According to the proxy statement, Sprint's shareholders have submitted two proposals on executive pay to be considered at the annual meeting April 20.
Sprint is not legally obligated to enact proposals that shareholders approve, although the board of directors generally will take them under advisement.
A proposal from the International Brotherhood of Electrical Workers' Pension Benefit Plan calls for the exercise price of stock options to be indexed or linked to an industry peer group stock performance index. That way the stock options would only have value if the stock's performance exceeds that of the peer group.
"In our opinion, stock option grants can and do often provide levels of compensation well beyond those merited," the union pension fund said.
Sprint's board of directors opposes the plan, saying it is important that the board have flexibility when it comes to choosing incentives.
Shareholder George Speight, of Nashville, N.C., has suggested capping CEO pay, including salary, bonuses and stock options, at 50 times the average compensation received by employees.
The board argued that such a pay cap "would place Sprint at a competitive disadvantage by limiting our ability to attract and retain the experienced and dedicated leaders necessary for Sprint's business."
A proposal brought by the Communications Workers of American Pension Fund asks the company to examine its offshoring efforts to determine if it could damage Sprint's brand name and reputation in the United States. The company last year announced plans to outsource hundreds of information technology jobs to IBM Corp. and EDS Corp., many of which are expected to go overseas.
The board also said the company needs to be able to outsource some jobs so it can focus on "core functions." The board also said the company opposes the proposal "because it asks Sprint to asses the potential impact of necessarily hypothetical situations."
A proposal submitted by Michael A. Meyers, a Sprint communications technician who lives in Plymouth, Ind., would require that the chairman of the board be an independent director.
The board argued that the chairman needs to be "thoroughly familiar with the industry and Sprint's operations."
Another issue likely to be discussed at Sprint's annual shareholders meeting is the company's announcement last month that it would eliminate its PCS stock by exchanging them for new shares of the FON stock on April 23.
Analysts have said the recombination of the two tracking stocks will benefit FON shareholders more than PCS shareholders.
Sprint shareholders have filed at least six lawsuits over the decision.