Sprints Board Evokes French History__»

According to one version of history, Queen Marie Antoinette, after being told that the hungry masses had no bread, replied, —Then let them eat brioche. Supposedly, according to that legend, Marie wasn—t being cruel — just clueless.

We don—t know whether the story is really true, just like we—ll never really understand the expenditures that Sprint Nextel Corporation—s (S) Compensation Committee continues to make.

In the proxy that Sprint filed yesterday, the company reported that it spent $454,281 for CFO Robert Brust to make personal trips on the corporate jet and chartered jets. (That’s actually down from the $601,338 Sprint spent on Brust’s personal trips in 2008, which Michelle wrote about last year in this article for DealBook. But it still ranks as one of the highest amounts we—ve seen for a company to spend on an executive’s personal travel.)

Spending that kind of money, of course, is quite a contrast to the public display Brust made when he snatched up hundreds of hotel pens and joked that it was his strategy to cut office supply costs. At the time, Bloomberg reported that Brust used the pens to illustrate a serious point, saying —The message is, we really have to be serious about this, because we are in an economic event that nobody understands.

Brust came to Sprint in May 2008 after he had retired as CFO from the Eastman Kodak (EK). When he signed on, Sprint gave him an employment agreement that paid Brust a million dollar salary, a $1.65 million cash sign-on bonus, hundreds of thousands of sign-on RSUs and options, participation in the company’s short- and long-term incentive plans, and —up to 35 round-trip personal domestic flights on either, at the Company’s discretion, Company aircraft or charter aircraft. According to p. 39 of Sprint’s 2009 proxy, allowing Brust personal use of the corporate jet ——was necessary in order to attract Mr. Brust, who had a very specific skill set that we desired, to work for us following his retirement from Eastman Kodak Company, where he gained valuable experience working with a challenged company.

On December 23, 2009, Sprint filed amendments (see here and here) to Brust’s employment agreement, which would otherwise have expired on May 1, 2010. These provided for — among other things — a —Special Bonus of $600,000 if Brust stayed with Sprint for another year (to be paid at $50,000 per month starting May 1, 2010 and ending April 1, 2011). The additional year, the filing explained, would give Sprint time to find a new CFO and Brust time to shift responsibilities to the new person. It also gave him —a long term incentive award target opportunity of $3 million which will be half options and half RSUs, subject to some conditions. Those awards will vest on May 1, 2012.

Strangely, although these Amendments don—t address the issue of usage of the corporate jet, p. 37 of this year’s proxy states:

In consideration of these additional benefits, Mr. Brust agreed to an extension of his noncompetition restricted period to 24 months, a mutual 60 days— notice of termination provision, no further use of corporate aircraft use for non-business travel after May 1, 2010, and the limitation of his post-termination severance period to six months on the condition that his sign-on equity would still vest on May 1, 2011.

And just as strange is the fact that the company took away a perk that cost the company as much as $600,000 but turned around and gave him cash for about the same amount.

Whether Sprint’s bet on the 4G network and Brust’s talents as CFO will lift the value of the company’s stock still remains to be seen. But it’s surely no consolation to the thousands of Sprint employees who—ve lost their jobs in recent years.

It’s doubtful that Sprint’s directors are either clueless or callous enough to utter the updated Kansas City version of Marie’s declaration, which might be something like, —Let them eat barbecue. But even if they did, that’s hard for all those unemployed workers to do without a paycheck.

Image source: â_lisabeth VigâŸe-Lebrun