Sprint defends exec’s pay, governance

Friday, April 16, 2004 | 10:34 a.m.

SUN STAFF AND WIRE REPORTS

KANSAS CITY, Mo. -- Sprint Corp., fighting a shareholder proposal to oust a director, defended the board's decision to pay Chief Executive Gary Forsee $16.4 million last year, saying it conformed with executive compensation at peer companies.

Forsee's pay "was rigorously reviewed" by board members, an independent compensation consultant and attorneys and took into account pay he forfeited when he left BellSouth Corp. to join Overland Park, Kan.-based Sprint in March 2003, the company said in a letter to shareholders.

Institutional Shareholder Services, a proxy adviser to 750 financial institutions, has called Forsee's pay "extravagant" and urged shareholders to withhold votes to re-elect Linda Koch Lorimer, a member of Sprint's nominating and audit committees.

Sprint, the third-largest U.S. long-distance carrier and the main local phone company in Las Vegas, Thursday told investors to ignore that advice, saying Lorimer "led extensive corporate governance reforms at Sprint. "

Results of the proposal will be announced at Sprint's annual meeting Tuesday.

The re-election of Lorimer, 52, is also opposed by the California Public Employees' Retirement System, which says she helped commission nonaudit work from Sprint's auditor. CalPERS, the largest U.S. public pension fund, plans to withhold proxy votes on its 7.34 million shares.

Forsee last year was given $12.8 million in restricted stock, a salary of $813,410, a bonus of $2.53 million and other compensation of $255,591. The 54-year-old executive also received the option to buy 1.43 million of Sprint's long-distance shares and an equal number of its wireless shares, according to a filing with the U.S. Securities and Exchange Commission.

About 389,000 of Forsee's 1.62 million restricted shares and $500,000 of his pay were awarded to make up for compensation he missed by leaving BellSouth, Sprint's filing said.

According to ISS's analysis, Forsee's total direct compensation totaled $29.2 million.

AT&T Corp., the biggest U.S. long-distance company, last year paid Chief Executive Officer David Dorman $11.7 million and also granted him options worth about $5.76 million. Verizon Communications Inc., the biggest U.S. local-phone company, paid CEO Ivan Seidenberg $19.1 million. That included $4.2 million in restricted stock and options valued at $6.3 million.

Bloomberg News contributed to this report.