Last December, Sprint Nextel Corporation (S) amended its employment agreement with CFO Robert Brust so that he’d stay put for a while after his agreement expired on May 1, 2010. Sprint wanted more time, it explained, to find and hire Brust’s replacement.
With more than a week left in 2010, that task is now complete. Sprint filed an 8-K yesterday to announce the hiring of Joseph J. Euteneuer as its new CFO. His employment agreement runs for a three-year term and provides for a starting salary of $775,000 a year. It also gives Euteneuer sign-on awards such as a $500,000 cash bonus and 125,000 shares of restricted stock.
Euteneuer will also get some nice incentive compensation. For instance, his target long-term performance bonus for FY 2011 is $3.5 million. He may also get a pro-rated short-term bonus for FY 2011; after that, though, his target bonus (which can be increased – but not decreased unless there are “across-the-board reductions generally applicable to the… senior executives”) will be more than $1 million.
Although Euteneuer’s starting date hasn’t yet been set, it is supposed to be the earlier of either 1) 30 days after the closing date that CenturyLink, Inc. (CTL) acquires Qwest Communications International Inc. (Q), or 2) within 30 days after the merger agreement terminates. And although the filing doesn’t spell out why, Sprint adds that it “…reserves the right to rescind the offer on or after March 31, 2011.”
Euteneuer comes to Sprint from Qwest, where he has been the EVP/CFO for a little more than two years. Prior to that, he spent 6 years at XM Satellite Radio Holdings Inc. (now Sirius XM Radio, Inc.)(SIRI), and – before that – he did a stint at Comcast Corporation (CMCSA) and one of its European subsidiaries.
We haven’t found any colorful stories about Euteneuer like we did about Brust, who once reportedly snatched up hundreds of free pens from the Hyatt and joked that was his strategy to cut Sprint’s expenditures on office supplies. Around that time, Brust said in an interview that – joking aside – the focus on saving money was real, because “we are in an economic event that nobody understands.—¯(Yet footnoted readers may remember that Brust is the same guy who negotiated for the right to use the company plane for personal travel before he agreed to come to Sprint. Several hundred thousand dollars of personal plane use later, Sprint and Brust renegotiated that perk, and Brust agreed not to use the plane for personal travel after May 1, 2010. Coincidentally, around that same time, the company gave him a “Special Bonus” of $600,000.)
But as for Euteneuer, an SFGate article that appeared yesterday quoted a Piper Jaffray analyst, Chris Larsen, as predicting that Euteneuer would be less conservative than Brust in his approach towards Sprint’s debt. Larsen reportedly said, ”[Euteneuer will] allow them to reduce their free cash flow to spend a little more on the network. He may actually refinance some of the debt instead of just paying it off.”
That may be just the beginning of the changes that Euteneuer will advocate when he arrives at the Sprint campus and starts learning the ropes. We find ourselves hoping that Brust has a couple of those Hyatt pens left to give his successor as a symbol of fiscal responsibility; and we also hope that Euteneuer will employ that principle daily as he works to boost Sprint’s bottom line.
Don’t forget that voting is now open for the worst footnote of 2010. Which footnote will take top (well, actually bottom) prize this year? You can cast your vote here and read about the various contestants here.