Motorola (NYSE: MOT) said this morning that it is taking a number of cost-cutting measures that will cut the pay and benefits of both employees and executives. The list includes: freezing pension plans, employee salaries, matching 401k contributions and cutting the pay of top executives in an effort to reduce costs, MarketWatch reports. It is unclear how much money the plan will save, but it is in addition to the $800 million in cost-saving initiatives announced in October. In a statement, Greg Brown and Sanjay Jha, co-CEOs, said: “The sustained downturn in the global economy requires that we take these difficult but necessary steps.” Release.
The cost-cutting measures are definitely a sign that the company believes it will continue to lose market share in its flagship handset business. Just yesterday, analysts polled by Reuters, said they believed Motorola was on pace to lose the most marketshare out of all handset makers next year, and that the company could sell anywhere from 55 to 100 million phones.
Both Brown and Jha have volunteered to accept a 25 percent salary reduction in 2009. Brown will also forfeit any cash bonus this year and Jha, who joined the company in August, will give up most of his cash bonus. (UPDATE: In an SEC document filed today, it clarified by saying that in Q1, Jha will received restricted stock units of $2.4 million, which is to his annual cash incentive he is no longer taking). In 2008, Brown was set to make no less than about $10 million comprising from his Base Salary, Annual Bonus, 2008 Special Bonus and long-term incentive plan (and not counting stock options and awards). Jha’s compensation package was a bit controversial. It was estimated that the former Qualcomm (NSDQ: QCOM) exec would make up to $94 million. Since then many things have changed, including the company’s decision to delay selling the handset division.
In afternoon trading, the company’s stock was up about 7 cents or 1.6 percent to $4.48 a share.
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