Forsee makes bank

Sprint Nextel still compensates Forsee as part of a severance package.

By John Henry

Published April 11, 2008

UM system President Gary Forsee is making less at his post as president than Sprint Nextel Corp. is required to pay him annually, because of a severance package he received.

Forsee received a substantial amount of money last year before leaving his post as chief executive officer of Sprint Nextel.

In 2007, Forsee received more than $19.9 million and was rewarded with the value of stock and options prior to his resignation, according to a proxy statement submitted by Sprint Nextel to the Securities and Exchange Commission.

Forsee resigned from Sprint Nextel after the company chose to officially terminate his contract Jan. 1. Last year, while at Sprint Nextel, he was ranked No. 116 on a Forbes Magazine list of highest compensated chief executives in the country.

Sprint Nextel spokesman James Fisher said a number of factors contributed to Forsee’s large salary increase. In 2007, the value of Forsee’s pension increased and, on the heels of his resignation, the company decided to include the financial benefits of his severance package into his salary.

“Those were the major differences in his overall compensation from year to year,” Fisher said.

In accordance to Forsee’s severance package, Sprint Nextel will have to pay him $84,325 a month for the rest of his life. These monthly payments, which began on Jan. 1, amount to more than $1 million a year.

Fisher said this aspect of Forsee’s severance package was unique to his contract.

When Forsee negotiated his contract with Sprint Nextel in 2003, he agreed to certain terms for a retirement plan. At the time, he did not know the exact amount he would be paid monthly.

“The pension plan that that (money) is being paid from was something that Gary negotiated as part of his contract,” Fisher said. “It did not apply to any other employee.”

Forsee’s severance package does not include the numerous company perks he received in 2006 and 2007. In those years, Forsee was provided a security system for his residence and required to use a company aircraft for business and non-business travel.

As UM system president, Forsee can make up to half the amount he will receive annually under his Sprint Nextel severance plan. Earlier this year, Forsee signed a three-year contract with the UM system to make $400,000 a year, plus up to $100,000 in annual incentives.

UM system spokesman Scott Charton said Forsee, a graduate of the UM system through the Missouri University of Science and Technology, was more focused on giving back to the university system than his potential paycheck from it.

He said Forsee donates more in philanthropy to the university system than it now pays him annually.

“President Forsee did not take this job for the paycheck,” Charton said. “We have got a great leader with a strong 35-year business background and we were fortunate to have him at the price we got him.”