Motorola has announced another round of cost cuts - including a pay freeze and temporarily suspending its contributions to its employee pension plans. Motorola will permanently freeze its U.S. pension plans, preserving vested benefits accrued by employees and retirees but eliminating future benefit accruals.
Motorola says that it intends to continue to provide funding to meet its pension obligations to present and future retirees.
The company also announced that Motorola co-chief executive officers, Greg Brown and Sanjay Jha will voluntarily take a 25 percent 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. His 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.
These actions are expected to lead to cost savings in addition to the US$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 Greg Brown and Sanjay Jha, co-chief executive officers of Motorola. "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."
Posted to the site on 17th December 2008
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