Motorola modified co-CEO Sanjay Jha's contract just days after it announced it would split into two companies so that he will receive a bigger payout if the separation does not take place.
According to a filing with the Securities and Exchange Commission, Jha now stands to receive $38 million if the company does not split before June 30, 2011. Under his previous contract, Jha had been guaranteed $30 million if the deal fell through.
Motorola said last week it plans to break into two independent, publicly traded companies in the first quarter 2011. One company will include its Mobile Devices and Home Businesses, which is now led by Jha, and the other company will include Enterprise Mobility Solutions and Networks, led by co-CEO Greg Brown.
If the separation does take place, Jha will be able to receive between 1.8 percent and 3 percent of outstanding shares of the new company he will lead. He was previously supposed to get 3 percent of outstanding shares, but the terms of his contract were changed because throwing the company's set-top box unit into the mix effectively increased the value of the new company.
Motorola's handset business has been struggling to stage a comeback by relying on smartphones powered by Google's Android platform. However, the company's handset sales have so far been weak. Jha has said the company is on track to launch 20 smartphones in 2010.
For more:
- see this Reuters article
- see this WSJ blog post (sub. req.)
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