Motorola will pay Jha $38M if split fails
Motorola is keeping in lock step with American business culture by offering extravagant bonuses to its executives, even in the event of failure.
According to an 8-K filing with the Securities and Exchange Commission, Motorola has raised, from $30 million to $38 million, the amount co-CEO Sanjay Jha will get in the event that the company's proposed breakup fails to materialize.
Just last week, Motorola said it intends to separate into two independent, publicly traded companies. One will include the company's Mobile Devices and Home businesses, and the other will include its Enterprise Mobility Solutions and Networks businesses.
According to the filing, subject to Jha's continued employment with Motorola through June 30, 2011, if the "separation event" has not occurred on or prior to June 30, 2011, or Motorola consummates an "other transaction event" on or prior to June 30, 2011, the company will pay Jha $38 million on July 15, 2011.
Should the separation go ahead as planned, Jha won't exactly be hurting. He will be entitled to a percentage between 1.8 percent and 3 percent, based on the market capitalization of the new business. Originally, his percentage had been a flat 3 percent.
According to the filing, the 3 percent will apply only if the market cap of the new company is equal to or less than $6 billion.