Motorola added to the growing mix of ways companies are trying to preserve cash during the current economic downturn by discontinuing their matching of employee contributions to the company’s 401(k) pension plan, beginning Jan. 1, 2009, according to a filing it made with the SEC. And on March 1, future benefit accruals and compensation increases will cease for participants under plan as of Feb. 28. (Vesting in the plan will continue for those not already fully vested.)
Given that step, the company also decided to modify the two pension plans the company had for its executives. As of March 1, accruals and increases to executives covered by the company’s Elected Officers Supplementary Retirement Plan as well as its Supplemental Pension Plan will be frozen, and future participation in the supplemental plan will be frozen at the beginning of 2009.
The company’s two co-executives, Greg Brown and Sanjay Jha, “will voluntarily take a 25 percent decrease in base salary in 2009 and forgo 2008 bonuses.” At the same time, the board’s Compensation and Leadership Committee agreed to make a grant of restricted stock units to Jha with a value equal to $2.4 million “less the amount of cash that would have been payable” to Brown had he not foregone his annual cash bonus. Jha’s units will vest in two equal installments on the first anniversary of the grant and on October 31, 2010. Why their value is tied to Brown’s foregone bonus was not explained.
We’ve posted previously about Brown’s juiced up equity compensation granted in July, and Jha’s employment agreement guaranteeing him $30 million if the mobile devices unit he heads up is not successfully spun off into a separate company before Oct. 31, 2010.