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Zander Out at Motorola

NEW YORK -- Mobile phone maker Motorola announced today that its embattled Chief Executive Ed Zander would step down on Jan. 1, with Chief Operating Officer Greg Brown replacing him.

Motorola shares rose about 1 percent as investors hoped the management change would help turn around the company, which has been losing money and market share to rivals such as Nokia Oyj and Samsung Electronics.

Zander, who has come under pressure from billionaire investor Carl Icahn and other shareholders, said he planned to spend more time with his family and would continue as chairman until the annual stockholders meeting in May.

"Getting Greg Brown is to improve execution. The company has lacked execution," said analyst Bill Choi of Jefferies & Co. "There have always been rumors of Motorola being bought out, and this signals its intent to remain a standalone company."

Motorola, criticized for not creating a strong successor to its flagship Razr phone and for cutting the price of that product too quickly, had shifted its priorities earlier this year to profitable growth rather than market share growth at all costs.

Brown, 47, said he would build on these changes.

"It's about building on the ones we've made, continuing on the momentum," he told Reuters in a phone interview.

The incoming CEO declined to comment on financial forecasts or whether the change was any indication of how the business was doing.

Motorola posted a small third-quarter profit in October after suffering two quarters of losses. Some investors had seen the improvement as a sign that Zander, 60, had bought some time.

Motorola shares were up 21 cents, or 1.3 percent, at $15.86 on the New York Stock Exchange. They had risen as much as 7 percent in trading before the market opened.

Zander said he had decided to step down and had recommended Brown as his successor.

"My date, my doing, my timeframe," he said, adding that he had agreed with his wife he would hold the chief executive role for four years.

The company said Zander would remain as strategic advisor to the CEO and as a nonofficer employee through Jan. 5, 2009.

Icahn had criticized Motorola's management team in a proxy battle earlier this year, but failed to win a seat on the board. He was not immediately available for comment.

Oppenheimer analyst Lawrence Harris said Brown had "clearly done an excellent job" since he became chief operating officer in March.

"What we'll see is additional focus on targets on metrics on goals," Harris said.



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