Motorola CEOs take pay cuts; relinquish bonus
18 December 2008
Motorola co-CEOs Greg Brown and Dr Sanjay Jha have decided to reduce their base salaries by 25 per cent in 2009.
Brown will also voluntarily forgo any 2008 cash bonus earned under the Motorola incentive plan. Since Jha's employment contract provides for a guaranteed cash bonus for 2008, he has decided to forego an amount equal tp waht Brown is relinquishing, while the remainder will be taken in the form of restricted stock units.
These actions are expected to lead to cost savings in addition to the $800 million that previously announced on October 2008, when, in a major cost cutting drive, the company had announced axing 3,000 jobs from a global workforce of 66,000 that would reduce its costs by $800 million, while simultaneously putting on hold its plans of splitting the company.
Electronics giant Motorola said yesterday that many employees globally will not get salary increases from next year and that it was freezing pension plans as the company struggles to cut cost and remain competitive after posting a $397-million loss in the third quarter, even as it has been unable to introduce a new product to compete with other high-end handsets.
Co-CEOs Sanjay Jha and Greg Brown said that the sustained downturn in the global economy requires these "difficult but necessary steps."
The 45-year-old Jha, a 14-year Qualcomm veteran, was inducted in Motorola last August to run its ailing wireless-handset division as a prelude to the planned spin-off of the unit in mid-2009. (See: Motorola poaches Qualcomm CFO to head loss-making handset division)