Moto’s mobile spinout and co-CEO contradictory compensation
While many of us were slipping out last Friday to gain an early start on out three-day Labor Day weekends here in the United States, Illinois-based Motorola filed a form with the SEC (Securities and Exchange Commission) detailing a possible and generous compensation package for co-CEO Greg Brown if the company’s mobile devices business is taken public with a market capitalization above $2 billion.
Brown, who heads Moto’s broadband mobility solutions business and already is slated to rake in some $10 million in 2008 base salary/annual bonus/special bonus/long-term incentive plan pay, would be able to purchase shares of Motorola common stock of a value of $3.33 million and restricted stock of $1.67 million if such a $2 billion deal were to go through.
The agreement, while very generous for an executive who just took control of the company in January, only rewards Brown is the then spun out company maintains a certain stock price. Meanwhile, Brown’s package is pocket change compared to the estimated value of co-CEO Sanjay Jha’s nearly $100 million package. Reports claim that the Moto mobile devices business unit leader has a contradictory sort of package that will pay him $94 million if the spin-off succeeds, but will pay him $30 million if it doesn’t, by October 31, 2010.
So while Jha stands to take home a much heftier reward if the cell phone unit spin-off flies by Halloween 2010, he still stays out of the poorhouse if it doesn’t. Stockholders must be spooked.
Then again, considering all that Jha has to do with the unit, that may have been the only way the ex-Qualcomm exec would take the job (which he did just last month). Faced with a failing unit and a fallen-from-grace brand that in Q2 Gartner data shows lost a third of its market share year over year and claimed only 10% of worldwide cell phone sales, Jha also has to re-staff the unit which has been hemorrhaging executives. As the Wall Street Journal pointed out this morning, between Moto’s layoffs and mass exodus of mobile execs, staffing is now key for Jha’s and the mobile devices business’ success.
What do you think? Are these packages inline with the work set out before the two co-CEOs or are they being overly compensated? Voice your opinion below.
–Suzanne Deffree, Managing Editor, News
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