Two Sprint Nextel Directors Won't Seek Re-election; Were Criticized By Analyst

Sprint (NYSE: S) Nextel said today that two of its directors have notified the company that they won't stand for re-election at its annual shareholders meeting in May. The directors faced criticism by an analyst last month who called for their removal, along with two others. Director Keith Bane notified the company on March 11 stating personal family medical circumstances, and director Linda Koch Lorimer told Sprint three days later that business commitments and schedule conflicts prohibited her from serving again, according to a SEC document filed today.

In a well-distributed research note, Pali Research Analyst Walter Piecyk offered harsh criticism of Sprint's board, and gave an extensive list of reasons why four directors in particular should be considered for dismissal. He wrote: "This Board needs to change. Dan Hesse needs help. Ralph Whitworth needs help. There are two very obvious choices for removal: Irvine Hockaday and Linda Koch Lorimer. We also believe Gordon Bethune and Keith Bane should be targets...We believe that Hesse, Whitworth and one or two other board members (that we actually have faith in) will be able to bring in value-added fresh blood upon the departure of these weak board members."

Piecyk said the primary reason is that they oversaw a host of bad decisions, including:

-- Acquisitions totaling $30 billion that were written down significantly.


-- Gary Forsee's turnaround plan in early 2007.


-- The appointment of Forsee to Executive Chairman of the Board.


-- Forsee's pre-mature announcement of WiMax.


-- The rejection of a private equity deal that would have brought back former Nextel CEO Tim Donahue and injected $5 billion into the company.

Piecyk reserved the most criticism for Hockaday, who runs a greeting card company, and served on four other boards while Sprint was falling apart. Piecyk said he was violating a rule that limits directors who chair the corporate governance committee to a certain number of boards. There's no word on whether Hockaday or Gordon Bethune will run for re-election. Separately, on Feb. 27, director Frank Drendel notified Sprint he will not stand for re-election because of a business conflict. He serves as chairman and CEO of CommScope, which acquired Andrew Corporation, a major supplier of wireless equipment to Sprint.

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