8-KLeadership ChangesOther EventsExhibits & Filings

Motorola Solutions, Inc. 8-K Report, Executive Changes (Dec 17, 2008)

Filed December 17, 2008For Securities:MSI

Summary

This 8-K filing from Motorola, Inc. (MSI) details significant changes to executive and employee retirement and compensation plans, reflecting a period of strategic adjustment. The Board of Directors has authorized amendments to freeze future benefit accruals and compensation increases under the Motorola Elected Officers Supplementary Retirement Plan (EOSRP) and the Motorola Supplemental Pension Plan (MSPP), effective March 1, 2009. Additionally, future participation in the MSPP will be frozen as of January 1, 2009. In tandem with these retirement plan freezes, Motorola is suspending company matching contributions to the Motorola 401(k) Plan effective January 1, 2009. Demonstrating leadership commitment, Co-CEOs Greg Brown and Sanjay Jha will voluntarily reduce their 2009 base salaries by 25% and forego their 2008 bonuses. Dr. Jha will receive restricted stock units valued at $2.4 million less Mr. Brown's potential bonus, with specific vesting schedules. These actions signal a move towards cost containment and a re-evaluation of executive compensation structures.

Key Highlights

  • 1Freezing of future benefit accruals and compensation increases in executive supplementary retirement plans (EOSRP and MSPP) effective March 1, 2009.
  • 2Suspension of future participation in the MSPP effective January 1, 2009.
  • 3Effective March 1, 2009, all future benefit accruals in the main Motorola Pension Plan will cease for existing participants, though vesting credit will continue.
  • 4Suspension of company matching contributions to the Motorola 401(k) Plan effective January 1, 2009.
  • 5Co-CEOs Greg Brown and Sanjay Jha will take a 25% voluntary reduction in base salary for 2009.
  • 6Co-CEOs will forego their 2008 bonuses under the annual cash incentive plan.
  • 7Sanjay Jha will be granted restricted stock units valued at $2.4 million less Greg Brown's potential bonus, with a two-part vesting schedule.

Frequently Asked Questions

The amendments primarily affect future benefit accruals and participation for current employees and executives. Benefits that have already accrued under the pension and supplementary retirement plans are generally not impacted, and existing participants will continue to earn vesting credit towards their pension plan benefits.

The freeze on future benefit accruals and compensation increases for the pension and supplementary retirement plans takes effect on March 1, 2009. The freeze on future participation in the MSPP and the suspension of company matching contributions to the 401(k) Plan are effective January 1, 2009.

While the filing does not explicitly state the rationale, such actions are typically taken in response to challenging economic conditions or as part of a broader cost-containment strategy to manage expenses and preserve financial flexibility.

The restricted stock units will be valued at $2.4 million minus the amount of cash incentive that Mr. Brown would have received under the annual cash incentive plan had he not foregone his bonus for 2008. These units will vest in two equal installments on the first anniversary of the grant and on October 31, 2010.