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.
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