Sprint Filings

Page 63 of Sprint's 2009 proxy filing, under the header of Mr. Saleh, states "On January 25, 2008, we terminated Paul N. Saleh’s, our former Chief Financial Officer, employment without cause. The following table and narrative describe the payments Mr. Saleh is entitled to receive due to his termination." (See table taken directly from the proxy. Click to enlarge)



Is $7,606,225 a fair severance for someone was "terminated without cause" (get used to seeing those words) 25 calendars into 2008? Over $7 million dollars for someone who was with Sprint (Nextel, at that time) since September 2001? I contend that in Sprint's current financial and operational situation that such a payment is, shall we say, more than fair especially considering his compensation was over $6 million a year in both 2006 and 2007 . Of course, my opinion in this matter (or virtually any matter) does not matter. But, I would like to highlight a few things regarded Mr. Saleh's package:

• If not for the change in the stock price in '08 (it went down faster than a Las Vegas call girl...not that I, um, would know), some accounting mumbo-jumbo, and various vesting periods for prior stock awards, his total compensation for the 2008 year would have been $13,645,385 (page 42 of the proxy) .
  
• He received a $250,000 one-time payment on March 15th, 2008 in recognition of his service as interim Chief Executive Officer. This payment came almost two months after he was terminated.
• He can possibly receive a Short Term Incentive (STI) payment through the beginning of 2010. Not a bad deal if you can get it.
• He gets continued participation in the medical and welfare plans for a period of two years

Ultimately, unless you are his accountant, there is no way to find out Mr. Saleh's exact total compensation as his stock awards and options are variable and dependent on Sprint's stock price. His stock options have different vesting periods, probably different strike prices, and he may or may not have sold some or all of them.

Lest you think Sprint did not get anything out of providing this package, au contraire! In exchange for his severance, Mr. Saleh did actually have to meet a couple conditions.

1. He executed a release in favor of Sprint and entered into a lifelong confidentiality agreement (take that, Verizon!).
2. He entered into a "non-competition" and "non-solicitation provisions" for a period of 24 months after his termination.

Whew! Sprint really took it to him during those negotiations. Just so you don't get the wrong idea, I don't begrudge Mr. Saleh for taking what he can get (earned?) from his employer; in fact, I am quite jealous. After all, he's probably laying on a golden beach somewhere sipping Mai Tai's and I'm stuck here blogging about him. Well done, Mr. Saleh, well done.