After Zander, multiple bonus chances for new Motorola CEO

Gregory Brown, Motorola’s chief executive since the first of the year, got a raise befitting his promotion from chief operating officer of the company that sells products “that make a broad range of mobile experiences possible.” Here’s one mobile experience it might care to overlook: the downward mobility of its stock, which fell 19 percent Jan. 23 after the company reported its fourth quarter profit dropped 84 percent.

It may be a good time to be taking over the reins of Motorola from ex-Silicon Valley star Ed Zander, as there looks to be a bit of upside opportunity.

In looking at the attachments to Motorola’s annual 10-K filing today, we (finally) noticed the arrangements that were made to compensate Brown back on Jan. 31. To begin with, a raise from $900,000 to $1,200,000. (That gives him an EXTRA $5,769 each week.)

But its the multiple bonus opportunities presented to Brown that are noteworthy:

  • A target cash award for 2008 equal to 220 percent of eligible earnings. Based on his
    salary, that would be $2,640,000.
  • An “additional cash-based” award for 2008 targeted at 130% of earnings, or
  • A “long range incentive award” targeted at 350 percent of earnings, or $4.2 million.

If all goes well in 2008 — as defined by Motorola’s compensation committee — that would equal $8 million in additional bonus payout to Brown.

And if all does not go well, he will have to make do with his $23,000-a-week salary.

But that’s a bargain compared with Zander, who will continue to collect his $1.5 million
salary ($28,846 per week) for another year. Zander remains chairman until Motorola’s next shareholder meeting and will remain as a “Strategic Advisor to the CEO” until he formally retires in January 2009.

Zander will forgo severance because he quit. Hopefully he saved some of the $35 million worth of compensation he got in his first three years at Motorola. (The company has yet to release compensation figures for 2007.) And none of that includes his option grants, which are all underwater at the moment. Since Zander became CEO in January 2004, Motorola shares have lost 5 percent in value.

And the average severance for the 6,700 employees that Motorola laid off last year : $59,850.75.


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