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Motorola shareholders bemoan company's plight
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Motorola shareholders voted to give holders of 10 percent of the company's stock the ability to call special shareholder meetings, a mark of the tension between investors and the company's board. The shareholders also vented their frustration with the direction of the company, whose troubled handset division has been dragging down its earnings for several quarters.
Shareholders elected the 13 nominated directors to the company's board at Motorola's annual shareholders meeting in Rosemont, Ill., but also took the opportunity to voice concerns on a wide range of issues, especially the direction of the company's mobile devices division.
George Polous, a shareholder from Burbank, Ill., complained that Motorola's "directors should not be re-elected because they have not done their jobs."
Several other shareholders took issue with the pay of co-CEO Sanjay Jha, who stands to reap more than $104 million if he can turn the mobile devices division around and take it public as a separate company by Oct. 31, 2010. Jha and co-CEO Greg Brown noted that they voluntarily decided to take a 25 percent cut in their base salaries, that Brown would forfeit any cash bonus and that Jha would not take most of his cash bonus for the year.
In December, Motorola announced it would freeze U.S. pension plans, stop matching company 401(k) contributions and halt most salary increases for 2009. At that time, the two chief executives acknowledged that Motorola's branding efforts needed to be improved, but Jha said that the company's focus on Android and data-driven handsets would help turn the handset division around.
Motorola posted a $231 million net loss in the first quarter, and sales were down 28 percent from the same quarter a year ago. The handset division's operating loss narrowed on a sequential basis to $509 million, down from $595 million in the fourth quarter of 2008, but still wider than an operating loss of $418 million in the year-ago quarter.
For more:
- see this article
- see this article
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Comments
Posted by Wings Set You Free | May 5, 2009 - 2:52pm
Shareholders have done NOTHING except sit on their keisters for the past decade, allowing the current crop of ass clowns to run the show. Shareholders have no right to compalin about self-serving executives stealing from them. Shareholders thought nothing about 159,000 employee growing to 50,000.... so NOW they complain? Where the F were they in 2003? Face it, the stock price is in the single digits, because that's where it DESERVES to be. Motorola does not know how to reward talent, so it deserves to die.
Posted by Anonymous | May 6, 2009 - 11:15am
The MOT shareholders and directors have allowed management to get away with incompetence and undeserving pay. Jha’s compensation is unethical larceny; he gets $30 million in Oct 2010 even if he fails.
What happened to Carl Icahn?
The American corporate compensation system is broken. It’s has failed the hard working middle class – pensions gone, 401Ks a scam, loyal managers and workers given pink slips just before they vest their pensions, options, and health care. And it has allowed CEOs to get away with larceny.
American CEO pay to average salary ratios of 400 to 1 is a scandal. UK is 22:1. Canada is 20:1. Japan is 11:1. We have only ourselves to blame for allowing CEOs to get away with unprecedented greed. Shareholders and above all board directors have allowed it to happen.
The CEOs get away with enormous greed because they control the information, and boards (who are mostly composed of CEOs) allow them to get away with it. And fragmented shareholders have been passive.
Posted by Anonymous | May 6, 2009 - 11:40am
The Galvins would have never allowed the taking away of pensions and 401k contributions. They would have never allowed $104 million compensation packages to CEO Jha.
The MOT 2003 board of directors is to blame for the ouster of Galvin management and decency.
Posted by Looking to Abandon a Sinking Ship | June 1, 2009 - 3:53am
Ed Zander was the first to note,"Motorola employees somehow feel they are entitled to something. Then he went off and entitled himself to generous pay and stock options, while doing nothing for new product development.
Carl Icahn had similar contempt for employees, so the severance package was cut in half AGAIN. Very few MOT employees would shed a tear if Carl Icahn loses every penny he has gambled on Motorola. No pension... no 401K match... the severance is nearly worthless-- that was the last "benefit" so my resume is out there.
Posted by You Reap What You Sow | June 3, 2009 - 12:57am
Just reading the comments from other fellow Motorolans above is telling of the morale in the company.
At this time, most everyone who one was loyal to the company has given up and is looking to abandon the sinking ship.
The current market value is a reflection of this desperate situation. The executives are woefully out of touch with reality, the few remaining committed engineers are burned out and then replaced with cheap outsourced labor.
Despite the "big talk" about turning the company around, not much has changed. Sad to see another icon of American high technology dying a slow death, strangled by greed and shortsightedness of the share holders.
Posted by Anonymous | June 9, 2009 - 12:25am
There are alot of good things happening within Moto at the moment.. We can't be cynical all the time, but all companies do make mistakes. Its whether the mistakes can be turned around before its too late.. Moto has got 80+ years of up and down, and not doubt the Galvins were the ethical glue in the past. This lesson illustrates a fundamental problem with human nature and publicly listed companies perhaps. The external pressures created from politically aligned analysts and radical investors looking for a buck needs to be kicked in the head.. Lets see what happens toward the end of the year...
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