Proxy Firm Urges Sprint Shareholders to Withhold Votes

An influential investor advisor has urged Sprint Corp. shareholders to withhold their votes for the only board member seeking reelection to another term this year, and said it was unhappy with the entire board.

Institutional Shareholder Services, a proxy voting firm that advises major investors, said Thursday that it has recommended its clients withhold votes to reelect Linda Koch Lorimer, vice president and secretary of Yale University, at Sprint’s annual meeting April 20.

The advisor said it has concerns about the board’s effectiveness and the judgment of the nomination and compensation panels, saying they “have consistently shown poor judgment in their oversight of the company and in their monitoring of management on behalf of shareholders.”

For example, it said Chairman and Chief Executive Gary Forsee was given an “extravagant pay package” before he “could demonstrate his performance on the job.” It also said it believed the nomination of board members to be partly driven by connections to the CEO.

Scott Stoffel, a spokesman for Overland Park, Kan.-based Sprint, said the company was disappointed with the report.

“It runs counter to what was conveyed to Sprint over the last year, as well as in the last five days, in regard to Sprint’s progress on corporate governance,” he said.

The company also said parts of the analysis weren’t consistent with Institutional Shareholder’s guidelines and that some facts were incorrect. Sprint would not provide specifics.

In its report, the advisor compared Forsee’s 2003 compensation with the compensation of chief executives at other telecommunications firms. ISS said Forsee received $29.2 million in salary, bonuses and other compensation last year, more than the heads of Qwest Communications International Inc., AT&T; Corp., AT&T; Wireless Services Inc. and Alltel Corp.

It also took Sprint to task for choosing Michael Sears, Boeing Co.’s former chief financial officer, an acquaintance of Forsee and fellow March of Dimes trustee, to serve on the board.

Sprint announced the appointment in mid-May, but Sears resigned six months later, after he was fired at Boeing for alleged unethical conduct related to a $26-billion contract for Boeing 767 tankers.

Shares of Sprint’s wireline stock, FON, were unchanged at $19.31 on the New York Stock Exchange. Shares of its wireless stock, PCS, rose 1 cent to $9.71.