Recognizing the shaky economic climate and Motorola’s still tenuous market position, the company’s two CEOs Greg Brown and Sanjay Jha voluntarily have agreed to a 25 percent pay-cut for the second year in a row, according to a proxy statement filed with the SEC today. The pair will have a base salary of to $900,000, which is 25 percent lower than the $1.2 million salary agreed to in 2008.
Still, that pay cut probably doesn’t make up for the headline-grabbing bonuses that Jha received when he was first hired, or the bonuses he will receive regardless of whether the company’s break-up plans are successful. In 2008, Jha received compensation of more than $100 million. Additionally, he will receive a $38 million if the mobile device division is not spun-off, and if it is successful, he will receive between 1.8 percent and 3 percent based on the market capitalization of the new business.
To be fair, almost all of Jha’s 2008 pay package was in stock options, and in order for him to make money from them, Motorola’s stock price has to be above $9.82 a share. The company is currently trading at $7 a share, and has been as low as $3 a year ago.
The stock has rebounded recently with concrete plans laid out for how the company will be split into two divisions, and with some promising phone releases, like the Motorola (NYSE: MOT) Droid on the Verizon Wireless network. The company plans to split into two publicly traded companies. One will include the mobile devices and home businesses, and the other will include its enterprise mobility solutions and networks businesses. Jha will serve as CEO of the mobile devices and home businesses, and Brown will serve as CEO of the enterprise group. The break-up targeted to take place in the first quarter 2011.
Despite the pay-cuts in 2009, Jha and Brown’s total compensation was fairly rich. In 2009, Jha’s brought home $3.77 million, and Brown made $8.5 million.