Rewarding Failure The Sprint Nextel Way?

There seems to be a lack of fiscal responsibility among many large companies in these trying economic times.  In spite of huge losses, some companies continue to reward those who have led them astray – all the while providing less for customers, employees, and shareholders.

Sprint Nextel has had a rough couple of years.  2008 alone saw losses of 2.8 BILLION dollars, an 11.2 % fall in revenue, and 4.6 million subscribers who walked out the door.

Some companies might take all of this as a sign that there was something fundamentally wrong with their business plan.  They might do more than just lay off thousands of their valuable employees and perhaps, just perhaps, reorganize their operations and cut off the head of the beast responsible for their problems.

But that’s not what Sprint decided to do.  Rather, they rewarded CEO, Dan Hesse, with a compensation package worth 14.2 million dollars.  That’s a base salary of 1.2 million, performance bonus (or lack of performance bonus) of 2.7 million, 10.1 million in stock options (which are currently below their exercise price), a $173,801 contribution to his 401(k), and over $30,000 in security and personal expenses along with other perks.

Perhaps Mr. Hesse could use some of those millions to set up homeless shelters for the 8,000 or more Sprint Nextel employees who have (or will be) laid off due to his inability to keep Sprint’s products relevant to consumers.

Yes, something is rotten in corporate compensation these days.  it is one thing to richly reward your leaders when they bring in oodles of cash, but very wrong when employees and shareholders are left holding the bag of sorrow while the CEO walks away with bags of gold.