Pay may be factor in LV rate case

Monday, April 12, 1999 | 11:17 a.m.

Sprint Corp.'s pay for top executives such as Chief Executive Officer William Esrey will be reviewed as the Public Utilities Commission of Nevada considers Sprint's $30 million rate increase proposal for Las Vegas customers.

Consumer Advocate Fred Schmidt said he'll be interested in seeing details of how Esrey is compensated as part of the discovery process that goes with a utility making its case for a rate increase.

A spokesman for Sprint said today that most of Esrey's compensation package is derived from stock options, which are separate from revenue generated through telephone rates.

Rob McCoy said Esrey's base salary and bonus of $1.9 million a year is in line with that of most executives with his level of experience.

Schmidt, meanwhile, is still reeling from last week's PUC decision not to dismiss the Sprint rate case. The Attorney General's Office filed a motion through its Bureau of Consumer Protection to throw out the Sprint request, which would raise customers' rates $3.90 a month if approved.

The reason for the bureau's motion: Sprint agreed in December 1995 to a five-year basic rate freeze as part of a 35-cent rate increase approved then.

"My biggest concern at this point is why the PUC didn't throw out the case," Schmidt said today. "Obviously, we're very disappointed. We felt we had an ironclad agreement with Sprint for stable rates."

Sprint has said that growth conditions have changed significantly in the three years since the company's last rate increase. The company hopes the PUC will authorize it to raise rates beginning July 1.

"Sprint is experiencing severe financial difficulties brought about by the enactment of the Telecommunications Act of 1996, which has imposed substantial new challenges and costs upon Sprint," the company said in a response to the attorney general's motion.

Now that it's definite that the Sprint rate case will be heard, Schmidt said he expects to learn more about the company's executive compensation.

"Executive compensation is always a consideration," Schmidt said. "Usually, it's only a fractional amount of whole package. But it's something we'll look into."

Schmidt said he would prepare for the Sprint rate case, but hasn't closed the door on the possibility of appealing the PUC's ruling on dismissing the case.

"I assure you, we'll do anything and everything to preserve the rights of ratepayers in this case," Schmidt said.