A statement from the Schaumburg, Illinois manufacturer said the moves were being made to better allow the company to further reduce its costs “amid continuing global economic challenges.”
In the statement, Motorola said:
- The pension change preserves vested benefits accrued by employees and retirees, but eliminates future benefit accruals. “Motorola intends to continue to provide funding to meet its pension obligations to present and future retirees,” the company said.
- An unspecified number of employees will not receive a salary increase in 2009.In addition, Motorola co-chief executive officers, Greg Brown and Sanjay Jha, will voluntarily take a 25% decrease in base salary in 2009.
- Greg Brown will voluntarily forgo any 2008 cash bonus earned under the Motorola incentive plan. Sanjay Jha’s employment contract provides for a guaranteed cash bonus for 2008, but Jha’s bonus will also be voluntarily reduced by an amount equal to Greg Brown’s forfeited bonus and the remainder will be taken in the form of restricted stock units.
The company said actions are expected to lead to
cost savings in addition to the $800 million that was
previously announced on October 30, 2008.
“The sustained downturn in the global economy requires that we take these difficult but necessary steps,” said Brown and Jha, in the statement. “While serving our customers remains a top priority, we are equally focused on our cost structure, and we will continue to implement appropriate measures to conserve cash and reduce expenses.”