By Relmor Demitrius
Lost in the market action of last week, where the DJIA saw huge swings of volatility, the Goldman Sachs hearings, and Greece debt fears came a signal but little talked about at the time from investors of Motorola (NYSE:MOT) that maybe stockholders have finally learned how to respond in kind to request from their management for more money, bonus’s, or employee share or compensation packages we would only dream of at our place of business. Yet time and time again these measures with companies get passed, and stockholders are told that its important to keep talent, and that a little money spent to keep top executives happy will improve the company in the long run. As Roberto Duran told Sugar Ray Leonard, “No Mas”, or in English, no more.
Seems stockholders of Motorola do not like how their company attempted to set up their compensation package for top executives. In a rare if not unique voting outcome on say-for-pay, Motorola denied the board its version of how this company’s leadership would like to compensate its top employees. Usually these things are voted in, as it may appear to be a weakness to vote against your board, or they simply have enough insider or friendly votes to garner a passing vote. Apparently this time wasn’t the case.
Motorola shareholders are probably still bitter about the way the company handled the pay package of then new CEO Sanjay Jha. Last year with stock and other compensation, no CEO made more than Sanjay Jha, coming in around $103 million. Staggering considering the financial problems this company was facing just a short time ago. Splitting to two companies, as is being done, will also net Mr. Jha another bonus.
Long has been the tradition that the stockholder approves measures such as these, but due to the Bernie Madoff situation, Wall Street financial collapses of Bear Stearns, Lehman Brothers, and the trillions in government money needed to bail out the banking, insurance, and auto industries, as well as the general markets altogether, shareholders are more aware and less amiable than in the past. Maybe Motorola stockholders feel like me, maybe these executives should worry more about getting their ship righted, and spend less time worried about steamrolling in cushy executive pay packages to unsuspecting stockholders. Hopefully this will be a long needed wake up call heard around Wall Street. Ah, Mr. Wall Street, the stockholder is King Sucker no longer. That is the message.
Yes, I’ve heard the argument about the need to keep top talent. I’ve heard it 100 times. Never been impressed with that argument. Proper motivation of top executives should not come from what the stock price does, or even what the boards opinion is. In a down economy when companies are failing left and right, employees are being laid off to the tune of a 10% unemployment rate, and other employees are seeing bonus’s disappear, any top executives should just be happy they are still employed making their millions a year, and leave the bonus talk for when stockholders are in a better mood. Staring at staggering perhaps permanent share hold erosion doesn’t exactly put shareholders in a warm and cozy mood with management.
One can only hope that Wall Street takes heed of this buried and passed over news story, for the simple fact of how rare it is to have one voted down, and respects and treats stockholders with a little more “bonus” type compensation of their own. Where are Motorola stockholder bonus’s? Your equity has struggled to regain any strength as you move forward to redefine your cell phone business, as well as your entire corporate structure. As Jim Mora’s famous line, then coach of the Indianapolis Colts, when asked by reporters about the struggling teams playoff hopes, “PLAYOFFS, HEH, PLAYOFFS!!. You want to talk about PLAYOFFS!?” The eruption on the word playoff, as the thought of discussing playoffs after a tough loss was appalling to this coach, so should there be a similar eruption discussing bonus compensation when you present a balance sheet like theirs, and then compare this request next to a year to year stock chart comparison. Its kind of like that. Bonuses!!! You want a BONUS? For what! Yes Wall Street, a bonus for what? The last two years you shouldn’t be asking stockholders for anything.
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Long MOT Call Options
Good for Motorola stockholders. As long as it is stockholders, and not government, making these calls, more power to them, it’s their company.
We have watched as stockholders in various companies, the top mangement of those companies recieve what ever salaries, stock options, and golden parachutes they desire.
The Board of Directors almost always approves the increases.
Why?
Simply, most board members are CEO’s of other companies. When their time comes for approval of whatever outrageous money and perk demands they want, the other CEO’s will apprvove it.
You take care of me and I will take care of you.
It is called “One Big Fraternity of Thieves”.
If you can make it to that Fraternity in your business career, It is one Beautiful Ride.
Why do they make so much more in compensation then any other countries in the world?
Simply, they can do whatever they want.
Should they be paid well..Of course they should!
But 103 million or 50 million, come now what is wrong with this picture?
For 103 million they would have to walk on water and turn water into wine for my vote.
If compensation packages was left to a vote of approval by the stockholders in all companies…wow would things change.
imho
Excellet post vapor. Love to see you in the forums and chat room so we can pick your brain. Have a great day.