OVERLAND PARK, Kansas (Reuters) - Sprint Nextel Corp S.N shareholders voted to re-elect Chief Executive Dan Hesse as a director, defeating a push by one key shareholder to get the executive off the wireless service provider’s board of directors.
According to Sprint, a preliminary count showed that 90 percent of votes cast were in favor of Hesse’s re-election; the percent of votes in favor of re-electing other directors ranged from 98 percent to 89 percent.
The Ontario Teachers’ Pension Plan, which has a roughly 4 percent stake in Sprint, said last week that it would vote against Hesse’s re-election.
Hesse has come under fire this year from shareholders disappointed with the hit the company’s results took from subsidizing Apple Inc’s AAPL.O popular iPhones and other investments the company is making.
In response to a shareholder question about iPhones, Hesse acknowledged that iPhones comes with a higher upfront cost to Sprint than other devices but he argued that it will help its financials in the longer term.
“We believe in the long term,” Hesse told shareholders, adding that iPhone customers stay with Sprint longer. “Over time we will make more money on an iPhone customer than we will from other customers.”
The executive also pointed to customer losses at No. 4 U.S. mobile provider T-Mobile USA, a unit of Deutsche Telekom DTEGn.DE. T-Mobile USA is the only one of the top four U.S. operators that does not sell iPhones.
“If you’ve any doubts look at T-Mobile USA,” he said.
While a shareholder proposal for deferred compensation was rejected, some shareholders said at the meeting they were concerned about Sprint’s compensation plan, which bases some executive pay on short-term incentives.
A representative for the American Federation of Labor and Congress of Industrial Organizations, which made the deferred compensation proposal, said he applauded Hesse’s pay cut. But he told shareholders: “We continue to be concerned the short term incentive plan will encourage executives to take on risks.”
Hesse said earlier this month he would take a pay cut.
Sprint shares were down 1 cent at $2.49 on the New York Stock Exchange in early afternoon trade.
Reporting by Carey Gillam; Writing by Sinead Carew; Editing by Gerald E. McCormick, Gunna Dickson and Phil Berlowitz