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Motorola’s Jha: Payout Bumped Up To $38 Million If Break-up Fails

More details on Sanjay Jha’s compensation around the Motorola (NYSE: MOT) break-up plan announced on February 11. And this will be sure to annoy those shareholders complaining about the vendor’s exec pay packages: the Co-CEO of the mobile devices and home division could end up with an even bigger payout than before.

According to the 8-K filed yesterday, Jha’s “contingent payment” — that is, the payout he gets if the deal doesn’t go through — has been bumped up to $38 million from its earlier sum of $30 million. The terms of Jha’s equity award — which he would get if the separation goes ahead — have also been changed: he will be entitled to a percentage between 1.8 percent and 3 percent, based on the market capitalization of the new mobile devices/homes business. Originally his percentage had been a flat 3 percent.

The 3 percent figure will now only apply if the market cap of the new company is equal to or less than $6 billion, according to the documents.

The equity award would be allocated on a 90 percent/10 percent split between stock options and restricted stock. The filing also makes clear that Jha cannot receive both the contingent payment and equity award.

Jha will be entitled to the $38 million if the deal doesn’t complete by June 30, 2011. Originally, the deadline had been October 31, 2010.

8 Responses to “Motorola’s Jha: Payout Bumped Up To $38 Million If Break-up Fails”

  1. EnergizerMoto

    If you own it, hold on to it. If you dont, you should really consider it. This is not a company that is going out of business soon. A year from now the company will look very, very different and once the split is final your two new stocks will be worth much more than your one stock now. This company still has way too much cash to go away quickly. However, it is borderline criminal what they are doing to their worker-bees in the meantime. Is there enough people left for a class-action?

  2. Motorola is down into the dumps. Senior management is faltering and has been for quite some time. They have been downsizing constantly and the company is only left with people with clout. Talk about nepotism and discriminate hiring and firings. Sell and get out. If you are in Motorola look for another job unless u are sleeping buddies with someone influential.

  3. Irritated

    Employee cost-of-living increases suspended for second year in a row, suspended 401K contributions, horrific increases in employee-share of health benefits, and continued layoffs… yet a $38 million guaranteed ‘worst case scenario’ for the redundant CEO. Have no doubt, these employees are being flat-out robbed. Do you think Jha should man-up and take, say, a mere $28 million bonus in exhange for saving a HUNDRED jobs?

  4. This is outrageous! The company hardly could survive and it had a “guarantee” $38 Millions should the split plan fail? Can anyone tell me that even if the split will take place, Motorola will be as successful as Apple or RIM? Who hire the BODs?

  5. Motorola has freeze the employees raise for the 2nd straight year but can give a CEO millions if a deal don’t go thru is crazy. Maybe that is were the raises and bonus is going to. Who need two CEO that could have save some of the employees that took a severence package because if not they would have been chosen to leave the company. Motorola only need One CEO.