Should CEO Pay Be Part of Sprint's $2B Shave?
The news last week that Sprint plans to shave $2 billion off its expenses in fiscal year 2016 brings up an interesting issue for the operator's new CEO Marcelo Claure.
Claure said that "no stone will be left unturned" in examining where the operator can cut costs on last Wednesday's Sprint Corp. (NYSE: S) earnings call, which begs the question: Should the CEO -- and his board -- be considering his own pay packet in that equation? (See Sprint to Take $2B Shave.)
Like his predecessor Dan Hesse, Claure is one of the biggest earners in the communications business. He joined Sprint in August 2014 and earned nearly $22 million for fiscal 2014. Sprint usually reveals executive compensation in late June ahead of its annual shareholder's meeting. So we should find out what Claure is earning for fiscal 2015 next summer.
It is certainly not unheard of for tech CEOs to work for a symbolic dollar a year and take their recompense in the form of stock options instead. Notable examples of this include Oracle Corp. (Nasdaq: ORCL)'s Larry Ellison in the 2010 to 2011 period and Google (Nasdaq: GOOG) founders Sergy Brin and Larry Page, amongst many others.
Traditionally, in the communications business, however, CEOs at major carriers get a salary and a very healthy wedge of extra perks too. Check out Light Reading's review of executive pay for fiscal 2014 to get the idea. (See Because They're Worth It?)
Recall that Claure has given himself three to five years to turn around Sprint. This could be a very lucrative time for the CEO at current compensation rates.
What do you think, readers? Should Claure's pay be in the mix as part of Sprint's cost-cutting measures?
— Dan Jones, Mobile Editor, Light Reading