Sprint Boosts CEO Target Bonus, Drops Link to Clearwire Success

Sprint Nextel Corp. boosted a target bonus for Chief Executive Officer Dan Hesse by 18 percent and dropped as an explicit component of measuring management success the Sprint customers on partner Clearwire Corp.’s network.

Sprint, the third-largest U.S. wireless provider, increased Hesse’s so-called short-term incentive bonus by $720,000 from last year to as much as $4.8 million for 2011, according to a filing today. The carrier kept Chief Financial Officer Bob Brust’s potential bonus at $2.6 million.

In this year’s first six months, Sprint will weigh executives’ eligibility for bonuses based in part upon a measure of operating income, contract subscriber turnover and service revenue. The board may alter the criteria for the second half.

In a change from last year, the carrier will assess the number of contract and non-contract, or prepaid, subscriber additions, according to the filing.

Sprint also dropped as a specific factor customers on Clearwire’s fourth-generation network, which was given 10 percent weight in last year’s compensation. Sprint, which owns more than half the equity in Clearwire, resells wireless service on the Clearwire network under its own brand.

Cristi Allen, a Sprint spokeswoman, said the carrier’s board will assess Clearwire 4G customers as part of the criteria concerning all postpaid users.

Hesse and some other executives of the Overland Park, Kansas-based carrier are also eligible for bonuses based on longer-term objectives, payable through a combination of stock options and cash after three years. The CEO’s potential long- term incentive grew by $2 million from last year to $12 million, according to the filing.

To contact the reporter on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

Dan Hesse, chief executive officer of Sprint Nextel Corp. Photographer: Jeff Kowalsky/Bloomberg