(Reuters) - The Ontario Teachers’ Pension Plan, one of Sprint Nextel Corp’s (S.N) key investors with about a 4 percent stake, will vote against Chief Executive Dan Hesse’s re-election to Sprint’s board.
Deborah Allen, a spokeswoman for the fund, told Reuters this is the first time it has opposed the re-election of any Sprint director and was taking the action because of the “poor linkages” between company performance and senior management pay.
Hesse has come under fire this year from shareholders disappointed with the hit the company’s results took from subsidizing Apple’s (AAPL.O) popular iPhones and other investments.
On May 4, Hesse said he would take a pay cut because of shareholder complaints, but the fund believes the cut is not sufficient to deal with the scale of Sprint’s problems.
“We view Hesse’s reduction in compensation as only partially alleviating our concerns. We therefore do not support his re-election to the board,” the fund said on its website.
Hesse said his total pay cut would amount to about $3.25 million after forfeiting $346,000 already received for 2012.
Sprint spokesman Bill White told Reuters it believed the Ontario fund had taken a minority position because the company had held discussions with other shareholders.
White also pointed to an SEC filing where Sprint’s board applauded Hesse’s decision to cut his pay and professed their support of the executive, who has held the CEO job since the end of 2007 when his predecessor was ousted.
Hesse has made progress in slowing subscriber losses since he took the job but investors have been worried about the company’s $15.5 billion commitment to Apple Inc (AAPL.O) for iPhone at the same time as the money-losing company is embarking on a $7 billion network upgrade.
Reporting by Sakthi Prasad and Sinead Carew, Editing by Matt Driskill and Mark Potter