Sprint Nextel (S) plans to exclude the effects of the iPhone on its business when determining 2011 compensation for top executives, the Overland Park, Kan., mobile carrier disclosed in a Securities and Exchange Commission filing.

The Monday filing notes that the Sprint board's compensation committee has discretion to award incentive payouts different from the committee's established criteria to ensure that extraordinary circumstances do not inequitably increase or decrease compensation. The committee eliminated the effect of the iPhone from both short- and long-term incentive compensation plans since a deal with iPhone maker Apple (AAPL) was finalized after the board set pay standards.

Sprint, which began selling the iPhone in October, hopes sales of the device will make the carrier competitive with larger rivals AT&T and Verizon Wireless.

The company believes that the investment it is making in the iPhone will be beneficial to our shareholders in the long-term, Sprint said in its filing.

But the carrier had to pay a heavy premium to Apple in return. Sprint lost $1.3 billion, or 43 cents a share, compared with $929 million, or 31 cents a share, in the year-earlier period. Sprint doesn't expect to profit from the iPhone until 2015.

Sprint said it sold 1.8 million iPhones in the fourth quarter, while AT&T and Verizon sold 7.6 million and 4.3 million, respectively.

Sprint also excluded benefits from a network-sharing deal with LightSquared from determining executive payouts, the company wrote.

The decision means executives will receive a short-term incentive payout of 73.7 percent of target pay, up from 63.7 percent if the effects of the iPhone and LightSquared were included. Long-term incentive payouts will be 106.5 percent of target pay, up from 91.5 percent.

Shares of Sprint were down 1.52 percent to $2.28 in morning trading.