What is the primary purpose of the performance-based stock options and market stock units awarded?

The primary purpose is to align the compensation of Motorola Solutions' executive officers with the company's long-term performance and stock price appreciation, thereby incentivizing executives to drive shareholder value. The awards are structured to ensure that a significant portion of executive compensation is contingent upon achieving specific performance milestones.

What are the performance metrics for these new awards?

The performance metrics are twofold: (1) Total Stockholder Return (TSR) relative to the S&P 500 for Performance Options, and (2) stock price appreciation thresholds for Market Stock Units (MSUs). For Performance Options, executives must achieve at least a 30th percentile TSR rank over a three-year period to earn any award. For MSUs, the company's stock price must meet specific minimum levels on defined anniversary dates.

What happens if the performance goals are not met?

If the threshold performance goals are not met, the awards will be forfeited. Specifically, if the threshold relative TSR performance is not achieved by the end of the performance period, the Performance Options will be forfeited. Similarly, if the stock price threshold requirement for MSUs is not met on any of the vesting dates, the corresponding MSUs will be forfeited.

How do the terms of CEO Gregory Q. Brown's awards differ from other executive officers?

The 2015 awards for Gregory Q. Brown are on substantially the same terms as those granted to other executive officers, with the exception of the termination and change-in-control provisions. Mr. Brown's provisions are governed by his existing employment agreement dated August 27, 2008, as amended.

MSI 8-K: Leadership Changes

Summary

Motorola Solutions, Inc. (MSI) filed an 8-K on March 10, 2015, reporting on the compensation granted to its executive officers as part of the 2015 long-term incentive program. The Compensation and Leadership Committee awarded performance-based stock options and market stock units (MSUs) designed to align executive compensation with company performance and stock price appreciation. These awards are subject to specific performance metrics and vesting conditions, reflecting a move towards greater accountability and a focus on shareholder value creation. The key aspect of these awards is their performance-driven nature. Performance Options are tied to Motorola Solutions' Total Stockholder Return (TSR) relative to the S&P 500 over a three-year period, with payouts ranging from 30% to 250% of the target grant based on achieving at least a 30th percentile TSR rank. Market Stock Units (MSUs) vest based on achieving specific stock price thresholds on anniversary dates, with payouts ranging from 60% to 200% of the target grant. These incentives are intended to motivate executives to drive sustained performance and enhance shareholder returns.

Key Highlights

1Motorola Solutions awarded performance-based stock options and market stock units (MSUs) to executive officers for the 2015 long-term incentive program.
2The awards are designed to tie executive compensation to company performance and stock price appreciation.
3Performance Options will vest and become exercisable three years after the grant date, contingent on achieving a threshold 30th percentile rank in Total Stockholder Return (TSR) relative to the S&P 500 over a three-year performance period (January 1, 2015 - December 31, 2017).
4Payouts for Performance Options range from 30% to 250% of the target grant based on relative TSR performance.
5Market Stock Units (MSUs) will vest and settle in shares on specific anniversary dates if the Company's stock price meets or exceeds 60% of the stock price on the grant date on each of those dates.
6Payouts for MSUs range from 60% to 200% of the target grant, based on stock price appreciation.
7The terms and conditions of these 2015 awards were modified compared to prior grants to emphasize performance-based vesting and forfeiture if performance goals are not met.

Motorola Solutions, Inc. 8-K Report, Executive Changes (Mar 11, 2015)

Summary

Key Highlights

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