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John Legere
T-Mobile CEO John Legere on stage at the GeekWire Summit. (GeekWire Photo)

T-Mobile is delaying annual salary increases for employees from July 2017 to February 2018, offering a one-time $1,000 “celebratory” stock grant in the meantime as it transitions to new schedule that aligns performance reviews, compensation increases and stock grants.

The new schedule, affecting employees through the senior manager level, was outlined in a June 1 email to employees from CEO John Legere, obtained by GeekWire and republished below.

The changes come amid fresh speculation that a merger between the Bellevue, Wash.-based carrier and Sprint is imminent. It’s not clear whether the changes are part of the planning process for a merger. T-Mobile declined to comment on the annual salary changes or the possibility of a merger.

Execs from T-Mobile parent Deutsche Telekom reportedly told German newspaper Handelsblatt that an all-stock deal to merge the two U.S. carriers is in the works. The rival companies re-opened talks about a merger last month, in the wake of President Donald Trump’s election.

On and off for years, T-Mobile and Sprint have explored the possibility of a combination, but external circumstances, like the U.S. regulatory environment, have stood in their way. Under the new anti-regulatory administration, romance is in the air and marriage could be on the horizon.

T-Mobile and Sprint, the majority of which is owned by SoftBank Group, last came close to joining forces in 2014. Concerns from U.S. regulators prevented the deal from coming to fruition at the time. Since then, T-Mobile surged passed Sprint to become the third-largest U.S. wireless carrier, and has continued to add more than 1 million customers each quarter with Legere at the helm.

Here’s the full text of an email Legere sent to employees June 1, describing the stock grant and compensation changes.

Good morning!

We’ve had incredible success over the last four years since launching the Un-carrier and joining forces with Metro to become a public company. I’m really proud of what we’ve been able to accomplish! Our business results have been nothing short of fantastic, and I want to say thank you! I also want to make sure we set ourselves up to continue this momentum. So today I have a couple of announcements to make.

First, we decided to give everyone up through the Senior Manager level a one-time celebratory TMUS stock grant with a target value of $1,000 to be awarded on June 15th. This award will vest fully in just 1 year – vesting evenly on the 6-month and 12-month anniversaries of the grant date; with the first vest on December 15th 2017. It’s our way to say thank you for all the hard work and help ensure you all continue to be owners of T-Mobile. This celebratory grant also helps bridge the transition to some changes we are making to the timing of other compensation activities.

We took a broader look at the timing and schedule of our annual compensation activities to see how we could make them better – specifically, when we have compensation increases, and when we grant stock. We’ve been reviewing how the current timing supports employee/manager discussions about the connection between these rewards and annual performance at both a personal and company level. I think we can do better. So, we’re making some changes.

Currently we have base compensation increases in July, and we award annual broad-based stock grants in November (and February for some employees). We’re going to bring these events into better alignment, linking pay and performance together in a way which will continue to drive our success going forward.

The annual broad-based stock grant will shift from November to February in 2018, getting all T-Mobile employees on the same timing for annual grants. This is great news and here’s why: Everyone who receives an annual broad-based stock grant will still get your 2017 annual grant as expected on November 15th 2017, and then only 3 months later you’ll get your 2018 annual grant on February 25th 2018. Combined with the June Celebratory grant, that means THREE stock grants in less than a year!

Timing for the annual base compensation review process will shift from July to February to align it with the new timing for annual broad-based stock grants along with the current annual corporate bonus timing for employees who aren’t on a commission or monthly bonus plan. This means our next compensation review and related increases will shift from July 2017 to February 2018 ensuring all our annual compensation activity happens at one time.

For many employees, the celebratory grant eliminates the impact of shifting the next compensation review to February 2018. The combination of the celebratory grant and the earlier timing of the 2018 annual broad-based stock grant will even further offset the impact for every employee up to the senior manager level as we make this important transition.

I know this is a lot of information, so if you’re confused about which of the above applies to you or the terms of the stock awards, please be sure to reach out to your manager or Employee Success Partner (formerly called HR Business Partner) or click here to get answers.

Thank you again for all you do and congratulations again!

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