Musical Chairs and Co-CEOs at Motorola


Motorola has named Sanjay Jha, former COO of Qualcomm, as co-CEO of the corporate operation and CEO of the company’s struggling mobile devices business. The 80-year-old company plans to spin off the unit by the third quarter of 2009.

Jha, who had also served as president of Qualcomm’s CDMA Technologies, will share leadership duties with current CEO Greg Brown. Brown came on as Motorola’s CEO last January and has also led the mobile device unit while making a wide range of executive leadership changes at the Schaumburg, Ill., company.

According to a SEC statement filed by Motorola (NYSE: MOT) today, Jha will make $1.2 million in annual salary for 2008 and receive a 2008 bonus of $2.4 million. The 2009 bonus will be $1.2 million. If a mobile device unit spin-off takes place, he will receive 3 percent of the new company’s stock. If no separate company is spun off by Oct. 31, 2010, he is entitled to a $30 million cash payment.

In addition to co-chairing CEO duties, Brown has been named CEO of Motorola’s Broadband Mobility Solutions business, which consists of the Home & Networks Mobility and Enterprise Mobility Solutions businesses, which underwent a reorganization two weeks ago.

Motorola shares increased 84 cents to $9.64 in trading shortly after the market opened following the news announcement.

The news comes as Motorola seems to be on a slight financial rebound, posting earnings last week of $4 million for its second quarter, breaking even on a per-share basis, while Wall Street had expected a loss of 3 cents per share, according to Thomson Financial.

To say Jha has a challenge ahead is a serious understatement. The mobile device division is lagging way behind market leaders in terms of mobile device success. A recent IDC report stated Motorola held just 4.19 percent of the smartphone market in the first quarter of 2008, well behind Research In Motion (NASDAQ: RIMM), Apple (NASDAQ: AAPL), Palm (NASDAQ: PALM) and Samsung.

Yet the division is showing signs of life, pushing out 16 new devices in the first half of the year, and another 34 is planned by year’s end.

While Motorola sold about 28 million mobile devices during the second quarter, topping Wall Street estimates of 26.6 million, according to Reuters Estimates, the figure is meager compared with Nokia’s 122 million mobile phones sold in the second quarter and Apple’s 1 million 3G iPhones sold in the first weekend following its June debut.

But as a recent Gartner research report indicates, the mobile device industry is going to be a tough market for every player going forward, as the customer base is nearly saturated in terms of mobile phone adoption. Gartner estimates annual growth in sales will hover around 10 percent this year — a drop from an estimated 15 percent earlier in the year.

During his time at Qualcomm, Jha was responsible for its mobile chip division and served in various leadership roles during his tenure, including executive vice president and general manager. He holds a Ph.D. in electronic and electrical engineering from the University of Strathclyde, Scotland, and a B.S in engineering from the University of Liverpool, England.

Before joining Qualcomm (NASDAQ: QCOM) in 1994, Jha had design-engineering roles with Brooktree, in San Diego, and GEC Hirst Research Labs, based in London.

“Sanjay’s technical expertise and industry experience make him ideally suited to lead mobile devices,” David Dorman, Motorola board chairman, said in a press statement. “I believe this is the right structure with the right leaders to provide the necessary management focus and agility to position both businesses for long-term success.”

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