UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant x Filed by a Party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Proxy Statement | |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
x | Definitive Proxy Statement | |
¨ | Definitive Additional Materials | |
¨ | Soliciting Material Pursuant to §240.14a-12 |
Motorola Solutions, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. | |||
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
(1) | Title of each class of securities to which transaction applies:
| |||
(2) | Aggregate number of securities to which transaction applies:
| |||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
| |||
(4) | Proposed maximum aggregate value of transaction:
| |||
(5) | Total fee paid:
| |||
¨ | Fee paid previously with preliminary materials. | |||
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
(1) | Amount Previously Paid:
| |||
(2) | Form, Schedule or Registration Statement No.:
| |||
(3) | Filing Party:
| |||
(4) | Date Filed:
|
NOTICE OF |
2016 ANNUAL MEETING |
OF STOCKHOLDERS AND PROXY STATEMENT |
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 16, 2016
March 28, 2016
Dear Fellow Motorola Solutions Stockholders:
On behalf of the Motorola Solutions Board of Directors, it is my pleasure to invite you to attend our 2016 Annual Stockholders Meeting. This years meeting will be held on Monday, May 16, 2016 at 5 p.m., EDT, at the Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007.
As a Motorola Solutions stockholder, your vote is important. Even if you are planning to attend the annual meeting in person, you are strongly encouraged to vote your shares through one of the methods described in the enclosed proxy statement. The Board and I would appreciate your support on our recommendations for the following proposals:
| Election of the nine nominated directors; |
| Advisory approval of the Companys executive compensation; and |
| Ratification of KPMG LLP as our appointed, independent, registered public accounting firm. |
On behalf of your Board of Directors, thank you for your confidence in Motorola Solutions. I look forward to your continued support.
Gregory Q. Brown
Chairman and CEO
Motorola Solutions, Inc.
|
PRINCIPAL EXECUTIVE OFFICES: 1303 East Algonquin Road Schaumburg, Illinois 60196 |
March 28, 2016
NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
Annual Meeting Date: Monday, May 16, 2016
Time: 5:00 P.M., EDT
Location: Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007
A live webcast (audio only) of the meeting will be available at www.motorolasolutions.com/investors.
The purpose of the meeting is to:
1. | elect nine directors for a one-year term; |
2. | hold a stockholder advisory vote to approve the Companys executive compensation; |
3. | ratify the appointment of KPMG LLP as the Companys independent registered public accounting firm for 2016; |
4. | consider and vote upon the stockholder proposal described in the enclosed proxy statement, if properly presented at the meeting; and |
5. | act upon such other matters as may properly come before the meeting. |
By order of the Board of Directors,
Kristin L. Kruska
Secretary
Only Motorola Solutions stockholders of record at the close of business on March 18, 2016 (the record date) will be entitled to vote at the meeting. The Notice, which contains instructions on how to access this Proxy Statement, the form of proxy and the Companys 2015 Annual Report, is being mailed to stockholders on or about March 28, 2016.
PLEASE NOTE THAT ATTENDANCE AT THE MEETING WILL BE LIMITED TO STOCKHOLDERS OF MOTOROLA SOLUTIONS AS OF THE RECORD DATE (OR THEIR AUTHORIZED REPRESENTATIVES). You will be required to provide the admission ticket that is detachable from your proxy card or provide other evidence of ownership. If your shares are held by a bank or broker, please bring your bank or broker statement evidencing your beneficial ownership of Motorola Solutions stock on the record date to gain admission to the meeting.
PROXY STATEMENT SUMMARY |
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider. You should read the entire Proxy Statement carefully before voting. For more complete information regarding the Companys 2015 performance, please review the Companys Annual Report on Form 10-K for the year ended December 31, 2015.
2016 ANNUAL MEETING OF STOCKHOLDERS
| Date and Time: May 16, 2016, 5:00 p.m., EDT |
| Location: Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007 |
| Record Date: March 18, 2016 |
| Voting: Stockholders as of the close of business on the record date are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. |
| Meeting Webcast (audio only): www.motorolasolutions.com/investors |
| Common Stock Outstanding as of Record Date: 174,685,442 |
| Stock Symbol: MSI |
| Registrar & Transfer Agent: Wells Fargo Shareowner Services |
ITEMS TO BE VOTED ON
Our Boards Recommendation | ||
Election of Directors (page 4) |
FOR | |
Advisory Approval of the Companys Executive Compensation (page 19) |
FOR | |
Ratification of Independent Registered Public Accounting Firm (page 55) |
FOR | |
Stockholder Proposal on Lobbying Disclosure (page 59) |
AGAINST |
DIRECTOR NOMINEES
Board Committees (as of February 3, 2016) |
||||||||||||||||||||||||||||||
Name | Director Since |
Indep. | Other Public Co. Boards |
Position | Audit | Comp. | Gov. & Nom. |
Exec. | ||||||||||||||||||||||
Gregory Q. Brown |
2007 | 0 | Chairman and CEO, Motorola Solutions, Inc. |
|||||||||||||||||||||||||||
Kenneth C. Dahlberg |
2011 | 1 | Former Chairman and CEO, Science Applications International Corporation | |||||||||||||||||||||||||||
Egon P. Durban |
2015 | 1 | Managing Partner and Managing Director of Silver Lake | |||||||||||||||||||||||||||
Gen. Michael V. Hayden
|
2011 | 0 | Principal, Chertoff Group | |||||||||||||||||||||||||||
Clayton M. Jones |
2015 | 2 | Former Chairman, CEO and President, Rockwell Collins, Inc. | |||||||||||||||||||||||||||
Judy C. Lewent |
2011 | 2 | Former EVP and CFO, Merck & Co., Inc. |
|||||||||||||||||||||||||||
Gregory K. Mondre |
2015 | 2 | Managing Partner and Managing Director of Silver Lake | |||||||||||||||||||||||||||
Anne R. Pramaggiore |
2013 | 1 | President and CEO, Commonwealth Edison |
|||||||||||||||||||||||||||
Samuel C. Scott |
1993 | 2 | Former Chairman, President and CEO, Corn Products International |
(i)
BUSINESS HIGHLIGHTS
PERFORMANCE AND ACCOMPLISHMENTS 2011 2015
(ii)
EXECUTIVE COMPENSATION
2015 CEO Total Direct Compensation
In 2015 we continued efforts to position Motorola Solutions for long-term financial success with a focus on driving improved profitability and free cash flow growth. 2015 business performance was improved, but slightly below our operating plan. This performance resulted in a below target payout under our Executive Officer Short-Term Incentive Plan. Our three-year performance ended December 31, 2015 showed increased returns to our stockholders relative to our comparator group driven primarily by a strong 2015. However, even with stronger performance in 2015, our three year performance resulted in a below target payout under the 2013-2015 cycle of our Long Range Incentive Plan. In addition to Mr. Browns regular, annual compensation, at the time of the Silver Lake Investment and as further incentive to deliver returns to our stockholders, Mr. Brown received a grant of performance-contingent stock options (PCSOs) that vest only upon the attainment of significant stretch stock price hurdles. (See the Compensation Discussion and Analysis for details). As a result of our improved performance and the PCSO grant, Mr. Browns total direct compensation for 2015 was higher than in 2014 by $5.3 million.
Base Salary |
$1,250,000 | |||||||
Executive Officer Short Term Incentive |
$1,650,000 | |||||||
|
||||||||
Total Short-term Cash Compensation |
$2,900,000 | |||||||
Long-term Incentive Cash Payment (2013-2015 Long Range Incentive Plan) |
$2,250,000 | |||||||
Long-term Incentives (POs and MSUs grant date fair value) |
$4,624,967 | |||||||
Long-term Incentives (PCSOs grant date fair value) |
$3,127,943 | |||||||
|
||||||||
Total Compensation (excluding perquisites) |
$12,902,910 |
GOVERNANCE HIGHLIGHTS
As part of our commitment to high ethical standards, our Board follows sound governance practices. These practices are described in more detail in the Corporate Governance section of our web site.
Independence | Eight out of our nine nominees are independent Our CEO is the only management director All Board committees that met during 2015 are comprised of independent directors | |
Independent Lead Director | We have a Lead Independent Director, selected by the independent directors The Lead Independent Director serves as liaison between management and the other non-management directors | |
Executive Sessions | The independent directors regularly meet in private without management The Lead Independent Director presides at these executive sessions | |
Accountability | All directors stand for election annually In uncontested elections, directors must be elected by a majority of votes cast Holders of 20% or more of our common stock have the ability to request a special meeting of stockholders | |
Board Oversight of Risk Management |
Our Board reviews the Companys approach to identifying and assessing risks The Audit Committee reviews the risk exposure of the Company, including our internal audit assessment of risk and our material risk disclosures, and meets periodically with senior management to discuss our risk assessment and risk management policies The Compensation and Leadership Committee reviews the annual compensation risk assessment and retains an independent compensation consultant The Governance and Nominating Committee reviews all related party transactions We have a recoupment or clawback policy to recover certain executive pay We have a policy prohibiting trading in derivative securities of the Company, and no NEOs or Directors have pledged any Company stock | |
Stock Ownership Requirements |
Our independent directors must hold our common stock with a value equal to at least five times the annual retainer, or $500,000, within five years of joining the Board Directors are required to hold all shares paid or awarded by the Company until their termination of service Our CEO must hold our common stock with a value equal to six times his annual salary within five years of attaining the position Members of the management executive committee must hold our common stock with a value equal to three times their annual salary within five years of joining the group |
(iii)
TABLE OF CONTENTS |
1 | ||||
4 | ||||
4 | ||||
9 | ||||
10 | ||||
10 | ||||
11 | ||||
13 | ||||
13 | ||||
14 | ||||
16 | ||||
16 | ||||
16 | ||||
18 | ||||
PROPOSAL NO. 2 ADVISORY APPROVAL OF THE COMPANYS EXECUTIVE COMPENSATION |
19 | |||
20 | ||||
20 | ||||
20 | ||||
26 | ||||
32 | ||||
35 | ||||
37 | ||||
COMPENSATION AND LEADERSHIP COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION |
37 | |||
38 | ||||
38 | ||||
40 | ||||
42 | ||||
43 | ||||
44 | ||||
45 | ||||
45 | ||||
46 | ||||
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS |
47 | |||
54 | ||||
PROPOSAL NO. 3 RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016 | 55 | |||
56 | ||||
56 | ||||
57 | ||||
58 | ||||
PROPOSAL NO. 4 STOCKHOLDER PROPOSAL RE: LOBBYING DISCLOSURE |
59 | |||
61 | ||||
62 |
This proxy statement (the Proxy Statement) is being furnished to holders of common stock, $0.01 par value per share (the Common Stock), of Motorola Solutions, Inc. (we, our, Motorola Solutions, or the Company). Proxies are being solicited on behalf of the Board of Directors of the Company (the Board) to be used at the 2016 Annual Meeting of Stockholders (the Annual Meeting) to be held at the Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007 on Monday, May 16, 2016 at 5:00 P.M., EDT, for the purposes set forth in the Notice of 2016 Annual Meeting of Stockholders. This Proxy Statement is dated March 28, 2016 and is being distributed to stockholders on or about March 28, 2016.
All stockholders may view and print Motorola Solutions Proxy Statement and the 2015 Annual Report at the Companys website at www.motorolasolutions.com/investors. The information contained on Motorola Solutions website is not a part of this Proxy Statement and is not deemed incorporated by reference into this Proxy Statement or any other public filing made with the Securities and Exchange Commission (the SEC).
Stockholders Entitled to Vote at the Annual Meeting
Only stockholders of record at the close of business on March 18, 2016 (the record date) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements thereof. On the record date, there were 174,685,442 shares outstanding of Common Stock. The Common Stock is the only class of voting securities of the Company.
A list of stockholders entitled to vote at the meeting will be available for examination at the Companys corporate offices at 1303 E. Algonquin Road, Door 51, Schaumburg, Illinois 60196 for ten days before the Annual Meeting and at the Annual Meeting.
Voting Without Attending the Annual Meeting
There are three convenient methods for registered stockholders to direct their vote by proxy without attending the Annual Meeting. Stockholders can:
| Vote by Internet. The website address for Internet voting is provided on your Notice or proxy card. You will need to use the control number appearing on your Notice of Internet Availability of Proxy Materials (Notice) or proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions until 11:59 P.M., EDT on Sunday, May 15, 2016. Internet voting is available 24 hours a day. If you vote via the Internet you do NOT need to vote by telephone or return a proxy card. |
| Vote by Telephone. You can also vote by telephone by calling the toll-free telephone number provided on your proxy card. You will need to use the control number appearing on your proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone telephone until 11:59 P.M., EDT on Sunday, May 15, 2016. Telephone voting is available 24 hours a day. If you vote by telephone you do NOT need to vote over the Internet or return a proxy card. |
| Vote by Mail. If you received a printed copy of the proxy card, you can vote by marking, dating, signing, and returning it in the postage-paid envelope provided. Please promptly mail your proxy card to ensure that it is received prior to the closing of the polls at the Annual Meeting. |
Your Proxy at the Annual Meeting
If you do not vote in person at the Annual Meeting, but have voted your shares by Internet, telephone, or mail, you have authorized certain members of Motorola Solutions senior management designated by the Board and named in your proxy to represent you and to vote your shares as instructed. All shares that have been properly votedwhether by Internet, telephone or mailand not revoked will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy but do not give voting instructions with respect to one or more items, the shares represented by that proxy will be voted as recommended by the Board with respect to those items:
Proposal |
The Board Recommended Vote | |||
Proposal 1 |
Election of nine Directors |
FOR | ||
Proposal 2 |
Advisory Approval of the Companys Executive Compensation |
FOR | ||
Proposal 3 |
Ratification of Independent Registered Public Accounting Firm for Fiscal Year 2016 |
FOR | ||
Proposal 4 |
Stockholder Proposal on Lobbying Disclosure |
AGAINST | ||
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 1 |
Holding Shares in the Name of a Bank, Broker or Other Nominee
If you are the beneficial owner of shares held in street name by a broker, the broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. Please check your voting instruction card or contact your bank, broker or nominee to determine whether you will be able to vote by Internet or telephone. If you do not give instructions to your broker, your broker will be entitled to vote the shares with respect to discretionary items, but will not be permitted to vote the shares with respect to non-discretionary items (resulting in a broker non-vote). The ratification of the appointment of KPMG LLP is the only discretionary item. The election of directors, the advisory approval of the Companys executive compensation, and the stockholder proposal are non-discretionary items.
Voting At the Annual Meeting as a Beneficial Owner
If you are a beneficial owner of shares held in street name by a bank, broker or other nominee and want to vote your shares in person at the Annual Meeting, you will need to ask your bank, broker or other nominee to furnish you with a legal proxy. You will need to bring the legal proxy with you to the Annual Meeting and hand it in with a signed ballot that will be provided to you. You will not be able to vote your shares at the Annual Meeting without a legal proxy. If you are provided a legal proxy, any previously executed proxy will be revoked and your vote will not be counted unless you appear at the Annual Meeting and vote in person or legally appoint another proxy to vote on your behalf.
If you do not have a legal proxy, you can still attend the Annual Meeting with evidence of your stock ownership as of the record date; however, you will not be able to vote your shares at the meeting. Accordingly, we encourage you to vote or instruct your broker to vote your shares in advance, even if you plan to attend.
Changing Your Vote
Registered stockholders can revoke their proxy at any time before it is voted at the Annual Meeting by either:
| Submitting another timely, later-dated proxy by Internet, telephone or mail; |
| Delivering timely written notice of revocation to: Secretary, Motorola Solutions, Inc., 1303 East Algonquin Road, Schaumburg, IL 60196; or |
| Attending the Annual Meeting and voting in person. |
Notice of Internet Availability
The SEC has adopted rules for the electronic distribution of proxy materials. We have elected to provide our stockholders access to our proxy materials and 2015 Annual Report on the Internet instead of sending a full set of printed proxy materials to all of our stockholders. This enables us to reduce costs and lessen the environmental impact of our Annual Meeting by mailing most of our stockholders a Notice. If you receive a Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request them by following the instructions for requesting such materials included in the Notice. The Notice instructs you on how to access and review all of the information contained in the 2016 Proxy Statement and 2015 Annual Report. The Notice also instructs you on how you may submit your proxy over the Internet or by telephone.
The Notice, which contains instructions on how to access this Proxy Statement, the form of proxy and the Companys 2015 Annual Report, is being mailed to stockholders on or about March 28, 2016.
Other Matters at the Annual Meeting
If any other matters are properly presented at the Annual Meeting for consideration, and if you have voted your shares by Internet, telephone or mail, the persons named as proxies in your proxy will have the discretion to vote on those other matters for you. As of the date we filed this Proxy Statement, the Board did not know of any other matter to be raised at the Annual Meeting.
2 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
Votes Required to Conduct Business at the Annual Meeting or Approve Proposals
In order for business to be conducted, a quorum of a majority of the shares entitled to vote must be represented in person or by proxy at the Annual Meeting. Abstentions and broker non-votes are included in determining whether a quorum is present, but will not be included in vote totals and will not affect the outcome of the vote for the election of directors. Abstentions will have the same effect as a vote Against the other proposals.
Proposal | Affirmative Vote Required | Broker Discretionary Voting Allowed | ||||
Proposal 1 |
Election of Nine Directors | More For votes than Against votes cast at the Annual Meeting in person or by proxy (for non-contested election) | No | |||
Proposal 2 |
Advisory Approval of the Companys Executive Compensation | Majority of shares present and entitled to vote; abstentions will count as votes Against | No | |||
Proposal 3 |
Ratification of Independent Registered Public Accounting Firm for Fiscal Year 2016 | Majority of shares present and entitled to vote; abstentions will count as votes Against | Yes | |||
Proposal 4 |
Stockholder Proposal on Lobbying Disclosure | Majority of shares present and entitled to vote; abstentions will count as votes Against | No | |||
With respect to each proposal, you may vote FOR, AGAINST or ABSTAIN. Broker non-votes will have no effect on the outcome of any of the proposals. |
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 3 |
The number of directors of the Company to be elected at the Annual Meeting is nine. The directors elected at the Annual Meeting will serve a one-year term ending at the 2017 Annual Meeting, until their respective successors are elected and qualified or until their earlier death, resignation or removal. Each of the nominees has consented to being named in this Proxy Statement and to serve as a director if elected. However, if any nominee named below is not available to serve as a director for any reason at the time of the Annual Meeting, the proxies will be voted for the election of such other person or persons as the Board may designate, unless the Board, in its discretion, reduces the number of directors. The Board is currently comprised of ten directors. Bradley E. Singer has notified the Board that he is not standing for re-election at the 2016 Annual Meeting. Immediately following the Annual Meeting, if all nominees are elected, the Board will consist of nine directors. The Board has the authority under the Companys Bylaws to increase or decrease the size of the Board and to fill vacancies between Annual Meetings.
Each of the nominees named below is currently a director of the Company, and, other than Egon P. Durban and Gregory K. Mondre, each was elected at the Annual Meeting of Stockholders held on May 18, 2015. Nominees Durban and Mondre were appointed by the Board of Directors at its meeting on August 18, 2015, effective as of August 25, 2015, in connection with the closing of the investment by Silver Lake in the Company. The ages shown are current as of the date of this Proxy Statement.
GREGORY Q. BROWN |
Mr. Brown joined the Company in 2003 and since May 2011 has been the Chairman and Chief Executive Officer of Motorola Solutions, Inc. He served as President and Chief Executive Officer from January 2011 until May 2011, Co-Chief Executive Officer of Motorola, Inc. and Chief Executive Officer of Broadband Mobility Solutions from August 2008 until January 2011.
Other Public Company Boards: Mr. Brown served on the board of Cisco Systems, Inc. from January 2013 to July 2014
Board Committees: Executive (Chair)
Director Qualifications:
● Public company CEO, relevant industry and technology experience as Chairman and CEO of the Company, and former CEO of Micromuse, Inc.
● International and global business, developing markets, government, public policy and regulatory experience as Chairman and CEO of the Company, Chair of the Federal Reserve Bank of Chicago, former Vice Chair of the U.S. China Business Council, former member of the President of the United States Management Advisory Board
● Public company board experience | |
|
||
Principal Occupation: Chairman and Chief Executive Officer, Motorola Solutions, Inc. |
||
Age: 55 Director since: 2007 Chairman since: 2011 |
4 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
KENNETH C. DAHLBERG |
Mr. Dahlberg served as Chief Executive Officer of SAIC, a research and engineering firm specializing in information systems and technology, from November 2003 through September 2009. Mr. Dahlberg also served as Chairman of the Board of Directors of SAIC from July 2004 until his retirement in June 2010.
Other Public Company Boards: Teledyne Technologies Incorporated
Board Committees: Compensation and Leadership (Chair), Audit, Executive
Director Qualifications:
● Public company CEO, international and global business experience as former CEO of SAIC
● Relevant industry and technology experience and managed and support services experience as former CEO of SAIC, and as a former executive officer of General Dynamics Corp and Raytheon Systems
● Government, public policy and regulatory experience as a former member of the Board of Governors at Aerospace Industries Association, the National Defense Industrial Association and the President of the United States National Telecommunications Security Advisory Council
● Public company board experience | |
|
||
Principal Occupation: Retired; Formerly Chairman of the Board and Chief Executive Officer of Science Applications International Corporation (SAIC) |
||
Age: 71 Director since: 2011 Independent |
EGON P. DURBAN |
Mr. Durban is a Managing Partner and Managing Director of Silver Lake, a global private equity firm. Mr. Durban joined Silver Lake in 1999 as a founding principal and is based in the firms Menlo Park office. He has previously worked in the firms New York office, as well as the London office, which he launched and managed from 2005 to 2010.
Other Public Company Boards: Intelsat S.A. In the last 5 years Mr. Durban served on the board of NXP Semiconductors N.V. from September 2006 to December 2013.
Board Committees: Compensation and Leadership
Director Qualifications:
● Technology and international and global business experience as Managing Partner and Managing Director of Silver Lake
● Financial/accounting and private equity and investment banking experience as a former associate with Morgan Stanleys Investment Banking Division
● Public company board experience | |
|
||
Principal Occupation: Managing Partner and Managing Director, Silver Lake |
||
Age: 42 Director since: 2015 Independent |
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 5 |
GEN. MICHAEL V. HAYDEN |
General Hayden has been a principal at the Chertoff Group, a security consultancy company since April 2009. General Hayden served as the director of the Central Intelligence Agency from May 2006 until his retirement in February 2009.
Other Public Company Boards: None
Board Committees: Governance and Nominating
Director Qualifications:
● Relevant industry, technology, government, public policy, and regulatory experience as a retired United States Air Force four-star general, former director of the Central Intelligence Agency, former Principal Deputy Director of National Intelligence and former director of the National Security Agency
● International and global business and developing markets experience as a principal at Chertoff Group | |
|
||
Principal Occupation: Principal, Chertoff Group |
||
Age: 71 Director since: 2011 Independent |
CLAYTON M. JONES |
Mr. Jones served as Chairman of the Board of Rockwell Collins, Inc. from 2002 through July 2014, and Chief Executive Officer from June 2001 until his retirement in July 2013. Mr. Jones also served as President of Rockwell Collins and Corporate Officer and Senior Vice President of Rockwell International which he joined in 1979.
Other Public Company Boards: Deere & Company, Cardinal Health, Inc. In the last five years, Mr. Jones served on the board of Rockwell Collins from March 2001 to July 2014.
Board Committees: Audit
Director Qualifications:
● Public company CEO, international and global business experience as former CEO of Rockwell Collins, Inc.
● Relevant industry and technology experience as former CEO of Rockwell Collins, Inc., and Corporate Officer and Senior Vice President of Rockwell International
● Government, public policy and regulatory experience as a member of The Business Council, and former member of the Presidents National Security Telecommunications Advisory Committee
● Public company board experience | |
|
||
Principal Occupation: Retired; Formerly Chairman, Chief Executive Officer and President, Rockwell Collins, Inc. (Rockwell Collins) | ||
Age: 66 Director since: 2015 Independent |
6 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
JUDY C. LEWENT |
Ms. Lewent served as Chief Financial Officer of Merck, a pharmaceutical company, from 1990 until her retirement in 2007.
Other Public Company Boards: GlaxoSmithKline plc and Thermo Fisher Scientific, Inc. Ms. Lewent served on the board of directors of Motorola, Inc. from May 1995 to May 2010, and in the last five years on the board of Dell, Inc. from May 2001 to July 2011.
Board Committees: Audit (Chair), Executive
Director Qualifications:
● Public company CFO, financial and accounting expertise, and international business experience as the former CFO of Merck
● Technology experience as a life member of the Massachusetts Institute of Technology
● Public company board experience | |
|
||
Principal Occupation: Retired; Formerly Executive Vice President & Chief Financial Officer, Merck & Co., Inc. (Merck) |
||
Age: 67 Director since: 2011 Independent |
GREGORY K. MONDRE |
Mr. Mondre joined Silver Lake in 1999 and is a Managing Partner and Managing Director of Silver Lake based in New York. Mr. Mondre was a principal at TPG, where he focused on private equity investments across a wide range of industries, with a particular focus on technology.
Other Public Company Boards: GoDaddy, Inc., Sabre Corporation
Board Committees: Governance and Nominating
Director Qualifications:
● Technology, international and global business, financial/accounting and private equity and investment banking experience as Managing Partner and Managing Director of Silver Lake and as former principal at TPG
● Public company board experience | |
|
||
Principal Occupation: Managing Partner and Managing Director, Silver Lake |
||
Age: 41 Director since: 2015 Independent |
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 7 |
ANNE R. PRAMAGGIORE |
Ms. Pramaggiore has been the President and Chief Executive Officer of ComEd, an electric utility company and a business unit of Exelon Corporation, and a member of the ComEd board of directors since February 2012. She served as ComEds President and Chief Operating Officer from May 2009 until February 2012.
Other Public Company Boards: The Babcock & Wilcox Company
Board Committees: Compensation and Leadership, Governance and Nominating
Director Qualifications:
● Government, public policy and regulatory and technology experience as CEO of ComEd, Executive Vice President, Customer Operations, Regulatory and External Affairs of ComEd, and as a licensed attorney
● International and global business experience as Deputy Chair of the Federal Reserve Bank of Chicago and board member of the Chicago Council on Global Affairs and The Chicago Urban League
● Public company board experience | |
|
||
Principal Occupation: President and Chief Executive Officer, Commonwealth Edison Company (ComEd) |
||
Age: 57 Director since: 2013 Independent |
SAMUEL C. SCOTT III |
Mr. Scott served as Chairman, President and Chief Executive Officer of Corn Products International, a corn refining business, from February 2001 until his retirement in May 2009.
Other Public Company Boards: Abbott Laboratories, Bank of New York Mellon
Board Committees: Governance and Nominating (Chair), Executive
Director Qualifications:
● Public company CEO experience as former chairman and CEO of Corn Products International, Inc.
● International and global business and developing markets experience as former chairman and CEO of Corn Products International, Inc., a board member of the Chicago Council on Global Affairs, World Business Chicago, The Chicago Urban League, and Northwestern Medical Group, and as Chairman of Chicago Sister Cities International
● Public company board experience | |
|
||
Principal Occupation: Retired; Formerly Chairman of the Board, President and Chief Executive Officer, Corn Products International |
||
Age: 71 Director since: 1993 Lead Independent Director since 2015 Independent
|
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NINE NOMINEES NAMED HEREIN AS DIRECTORS. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR THE ELECTION OF SUCH NINE NOMINEES AS DIRECTORS.
8 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
The Boards Corporate Governance Principles
The Board adheres to governance principles designed to assure the continued vitality of the Board and excellence in the execution of its duties. The Board has responsibility for management oversight and providing strategic guidance to the Company. The Board believes that it must continue to renew itself to ensure that its members bring a fresh perspective to understanding the industries and the markets in which the Company operates. The Board also believes that it must remain well-informed about the opportunities and challenges facing Motorola Solutions and its industries and markets so that the Board members can exercise their fiduciary responsibilities to Motorola Solutions stockholders.
GOVERNANCE HIGHLIGHTS |
The Board recognizes the importance of evolving corporate governance practices and is committed to regularly reviewing specific elements of the Companys corporate governance. Key governance practices of the Company are:
Eight of nine director nominees are independent |
Board Committees comprised of independent directors |
Compensation and Leadership Committee retains independent compensation consultant |
Lead Independent Director |
Independent directors regularly meet in private without management |
Risk assessment process with Audit and Compensation and Leadership Committees |
Hold annual advisory vote on executive compensation |
No gross-up for excise taxes |
Recoupment or clawback policy |
Stock Ownership Guidelines |
Board and Committee self assessment process |
Annual election of all directors |
Majority vote for directors in uncontested elections |
Holders of 20% or more of our Common Stock have the ability to request a special meeting of stockholders |
Active stockholder engagement process |
Anti-hedging policy |
Motorola Solutions encourages you to visit our corporate governance page on our website at www.motorolasolutions.com/investors which provides information about our corporate governance practices and includes the following documents: |
Board Governance Guidelines |
Director Independence Guidelines |
The Principles of Conduct for Members of the Board of Directors |
Code of Business Conduct |
Audit Committee, Compensation and Leadership Committee and Governance and Nominating Committee charters |
Restated Certificate of Incorporation, as amended |
Amended and Restated Bylaws |
Amendments to the above documents, or waivers applicable to our directors, chief executive officer, chief financial officer or corporate controller from certain provisions of its ethical policies and standards for directors and employees, will be posted on the Motorola Solutions website within four business days following the date of the amendment or waiver. There were no waivers in 2015.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 9 |
The Board believes it should be comprised of individuals with appropriate skills and experiences to meet its board governance responsibilities and contribute effectively to the Company. Our Governance and Nominating Committee carefully considers the skills and experiences of current directors and new candidates to ensure that they meet the needs of the Company before nominating directors for election to the Board. All of our non-employee directors serve on Board committees, further supporting the Board by providing expertise to those committees. The needs of the committees also are reviewed when considering nominees to the Board. The Board has a deep working knowledge of matters common to large companies and is comprised of a mix of skills and qualifications which includes:
| Public company CEOs and CFOs |
| Financial and accounting expertise |
| Relevant industry experience |
| Technology experience, including in information technology and cyber security |
| Global business experience |
| Developing markets experience |
| Government, public policy and regulatory experience |
| Managed and Support Services |
| Private equity and investment banking experience |
| Public company board experience |
| Gender and ethnic diversity |
| Independence |
Specific experience, qualifications, attributes or skills of our nominees are listed in the biographies above.
IDENTIFYING AND EVALUATING DIRECTOR CANDIDATES
As stated in our Board Governance Guidelines, when selecting directors, the Board and the Governance and Nominating Committee review and consider many factors, including: experience in the context of the Boards needs; leadership qualities; ability to exercise sound judgment; existing time commitments; years to retirement age; and independence from management. They also consider ethical standards and integrity. While the Company does not have a formal policy regarding diversity, diversity is one of several factors considered by the Board and the Governance and Nominating Committee when selecting director nominees. The Board and the Governance and Nominating Committee strive to nominate directors with a variety of complementary skills, backgrounds and perspectives so that, as a group, the Board will possess the appropriate talent, skills, experience and expertise to oversee the Companys businesses. The Governance and Nominating Committee annually assesses the effectiveness of its director nomination process and the Board Governance Guidelines.
The Governance and Nominating Committee will consider nominees recommended by Motorola Solutions stockholders, provided that the recommendation contains sufficient information (as required by the Companys Bylaws), including the candidates qualifications, to assess the suitability of the candidate, and is timely received in accordance with the Companys Bylaws. Stockholder-recommended candidates that comply with these procedures will receive the same consideration that other candidates receive.
The Governance and Nominating Committee considers recommendations from many sources, including members of the Board, management and search firms. From time to time, Motorola Solutions hires search firms to help identify and facilitate the screening and interview process of director candidates. The search firm screens candidates based on the Boards criteria, performs reference checks, prepares a biography of each candidate for the Governance and Nominating Committees review and helps arrange interviews. The Governance and Nominating Committee and the Chairman of the Board conduct interviews with candidates who meet the Boards criteria. In August 2015, Motorola Solutions entered into an Investment Agreement (the Investment Agreement) with Silver Lake Partners IV, L.P. and Silver Lake Partners IV Cayman (AIVII, L.P.) (collectively Silver Lake) relating to the issuance to Silver Lake of $1 billion of convertible 2% unsecured notes, due in 2020 (the Notes). In connection with the issuance of the Notes, Motorola Solutions agreed to expand the size of the Board and appoint two Silver Lake nominees, Egon P. Durban and Gregory K. Mondre, to the Board of Directors. The Governance and Nominating Committee interviewed both Mr. Durban and Mr. Mondre and as a result, each were nominated by the Governance and Nominating Committee for appointment by the Board of Directors. The Governance and Nominating Committee has full discretion in considering potential candidates and making its nominations to the Board.
10 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
To assist it in carrying out its duties, the Board has delegated certain authority to several committees. The Board currently has the following standing committees: (1) Audit, (2) Compensation and Leadership, (3) Governance and Nominating, and (4) Executive. The charters for each of the Audit Committee, Compensation and Leadership Committee and Governance and Nominating Committee are available on our website at www.motorolasolutions.com/investors. Committee membership as of December 31, 2015, the number of meetings of each committee during 2015, and the functions of each committee are described below:
AUDIT COMMITTEE
|
Assist the
Board in fulfilling its oversight responsibilities as they relate to the Companys accounting policies, internal controls, disclosure controls and procedures, financial reporting practices and legal and regulatory compliance.
Engage the independent registered public accounting firm. | |
2015 Meetings: 9 | ||
Judy C. Lewent (Chair) Kenneth C. Dahlberg Clayton M. Jones Bradley E. Singer |
Monitor the qualifications, independence and performance of the Companys independent registered public
Maintain, through regularly scheduled meetings, a line of
communication between the Board and the
Oversee compliance with the Companys policies for conducting business, including ethical business standards.
Review the Companys overall financial position, asset utilization and capital structure.
Review the need for equity and/or debt financing and specific outside financing proposals.
Monitor the performance and investments of employee retirement and related funds.
Review the Companys dividend payment plans and practices.
Prepare the report of the Audit Committee included in this Proxy Statement.
|
COMPENSATION AND LEADERSHIP COMMITTEE*
|
Assist the
Board in overseeing the management of the Companys human resources, including:
compensation and benefits programs;
CEO performance and compensation;
executive development and succession;
diversity efforts; and
evaluation of the Companys senior management.
Review and discuss the Compensation Discussion and
Analysis (CD&A) with management and make a
Prepare the report of the Compensation and Leadership Committee included in this Proxy Statement.
| |
2015 Meetings: 6 | ||
Kenneth C. Dahlberg (Chair) Bradley E. Singer Anne R. Pramaggiore
|
GOVERNANCE AND NOMINATING COMMITTEE*
|
Identify
individuals qualified to become Board members, consistent with the criteria approved by the Board.
Recommend director nominees and individuals to fill vacant positions and to serve on committees.
Assist the Board in interpreting the Companys Board
Governance Guidelines, the Boards Principles of Conduct
Oversee the evaluation of the Board and its committees.
Review the independence of directors and evaluate and/or approve related party transactions.
Generally oversee the governance and compensation of the Board.
| |
2015 Meetings: 5 | ||
Samuel C. Scott III (Chair) Gen. Michael V. Hayden Anne R. Pramaggiore
|
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 11 |
EXECUTIVE COMMITTEE
|
Act for the
Board between meetings on matters already approved in principle by the Board.
Exercise the authority of the Board on specific matters assigned by the Board from time to time.
| |
2015 Meetings: 0 | ||
Gregory Q. Brown (Chair) Kenneth C. Dahlberg Judy C. Lewent Samuel C. Scott III
|
* On February 3, 2016, Mr. Mondre joined the Governance and Nominating Committee and Mr. Durban joined the Compensation and Leadership Committee.
Attendance
The Board held eight meetings during 2015. Overall attendance at Board and committee meetings was 98%. Each incumbent director attended 95% or more of the combined total meetings of the Board and the committees on which he or she served during 2015, except for one director that attended 85% of the meetings. At the Board meetings, independent directors of the Company meet regularly in executive session without management as required by the Motorola Solutions, Inc. Board Governance Guidelines and NYSE listing standards. Generally, executive sessions are held in conjunction with regularly-scheduled meetings of the Board. In 2015, the non-employee independent members of the Board met in executive session six times. In addition, Board members are expected to attend the Annual Meeting as provided in the Board Governance Guidelines. All of the directors who stood for election at the 2015 Annual Meeting attended that meeting.
Leadership Structure of the Board
At the Annual Board meeting held in May 2011, the Board combined the roles of Chairman and Chief Executive Officer and appointed Gregory Q. Brown to serve as both Chief Executive Officer and Chairman of the Board and also appointed an independent director as Lead Independent Director. The Board reappointed Mr. Brown as Chairman of the Board and an independent director as Lead Independent Director at the Annual Board meetings held in 2012 through 2015. The Board determined that Mr. Browns thorough knowledge of Motorola Solutions business, strategy, people, operations, competition and financial position coupled with his leadership and vision made him well positioned to chair Board meetings and bring key business and stakeholder issues to the Boards attention. Our Lead Independent Director, currently Mr. Scott, chairs the executive sessions of the Board and acts as a liaison between our Chairman and independent directors.
Communicating with the Board
All communications to the Board of Directors, Chairman of the Board, the non-management directors or any individual director, must be in writing and addressed to them c/o Secretary, Motorola Solutions, Inc., 1303 East Algonquin Road, Schaumburg, IL 60196 or by email to boardofdirectors@MotorolaSolutions.com. Our Secretary reviews all written communications and forwards to the Board a summary and/or copies of any such correspondence that, in the opinion of the Secretary, deals with the functions of the Board or Board committees or that she otherwise determines requires the Boards or any Board committees attention.
The Boards Role in the Oversight of Risks
The Board oversees the business of the Company, including CEO and senior management performance and risk management, to assure that the long-term interests of the stockholders are being served. Each committee of the Board is also responsible for reviewing the risk exposure of the Company related to the committees areas of responsibility and providing input to management on such risks.
Management and our Board have a robust process embedded throughout the Company to identify, analyze, manage and report all significant risks facing the Company. Our CEO and other senior managers regularly report to the Board on significant risks facing the Company, including financial, operational and strategic risks. Each of the Board committees reviews with management significant risks related to the committees area of responsibility and reports to the Board on such risks, which includes the Compensation and Leadership Committees review of Company-wide compensation-related risks. While each committee is responsible for reviewing significant risks in the committees area of responsibility, the entire Board is regularly informed about such risks through committee reports. The oversight of specific risks by board committees enables the entire Board to oversee risks facing the Company more effectively and develop strategic direction taking into account the effects and magnitude of such risks. The independent Board members also discuss the Companys significant risks when they meet in executive session without management. Our audit services department has a very important role in the risk management program. The role of this department is to provide management and the Audit Committee with an overarching and objective view of the risk management activity of the Company. This departments engagements span financial, operational, strategic and compliance risks and the engagement results assist management in maintaining acceptable risk levels. This department identifies and conducts engagements utilizing an enterprise risk management model. The director of the department reports directly to the Audit Committee as well as the Chief Financial Officer and meets regularly with the committee and the committee chairperson, including in executive session.
12 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
On March 10, 2016, the Board made the determination, based on the recommendation of the Governance and Nominating Committee and in accordance with our Director Independence Guidelines, that the former non-employee director, Mr. Dorman, and the current non-employee directors, Mr. Dahlberg, Mr. Durban, General Hayden, Mr. Jones, Ms. Lewent, Mr. Mondre, Ms. Pramaggiore, Mr. Scott, and Mr. Singer, were independent during the periods in 2015 and 2016 that they were members of the Board. Mr. Brown does not qualify as an independent director because he is the Chief Executive Officer of the Company. See Motorola Solutions Relationship with Entities Associated with Independent Directors for further details.
Determining Independence
The Director Independence Guidelines include both the NYSE independence standards and additional independence standards the Board has adopted to determine if a relationship that a Board member has with the Company is material. We have adopted a stricter application of the NYSE independence standards requiring a look-back of four years when assessing independence in connection with a directors (i) status as an employee of the Company, (ii) direct compensation in excess of $120,000, (iii) relationship with our internal or external auditor, and (iv) employment with a company that has made payments to, or received payments from, the Company for property or services.
A complete copy of the Director Independence Guidelines is available on the Companys website at www.motorolasolutions.com/investors.
Motorola Solutions Relationship with Entities Associated with Independent Directors
When assessing independence, each of Mr. Dahlberg, Mr. Dorman, Mr. Jones, Ms. Pramaggiore, Mr. Scott, and Mr. Singer had relationships with entities that were reviewed by the Board under independence standards covering contributions or payments to charitable or similar not-for-profit organizations. In addition, each of Mr. Dorman, Mr. Durban, General Hayden, Mr. Jones, Mr. Mondre, Ms. Pramaggiore, Mr. Scott and Mr. Singer had relationships with entities that were reviewed by the Board under independence standards covering payments to, or received from, other entities. In each case, the payments or contributions were significantly less than the NYSE independence standards or the Director Independence Guidelines adopted by the Board, or did not constitute a disqualifying event under such standards and were determined by the Board to be immaterial.
Independent Members of the Audit, Compensation and Leadership and Governance and Nominating Committees
The Board has determined that all of the current members of the Audit Committee, the Compensation and Leadership Committee and the Governance and Nominating Committee are independent within the meaning of the Director Independence Guidelines, applicable rules of the SEC and the NYSE listing standards for independence.
RELATED PERSON TRANSACTION POLICY AND PROCEDURES
The Company has established a written related person transaction policy and procedures (the RPT Policy) to assist it in reviewing transactions in excess of $120,000 (Transactions) involving the Company and its subsidiaries and Related Persons (as defined below). The RPT Policy supplements our other conflict of interest policies set forth in the Principles of Conduct for Members of the Motorola Solutions, Inc. Board of Directors and the Code of Business Conduct for employees and our other internal procedures.
For purposes of the RPT Policy, a Related Person includes directors, director nominees and executive officers of the Company since the beginning of the Companys last fiscal year, beneficial owners of 5% or more of any class of voting securities of the Company and members of their respective immediate family. The Governance and Nominating Committee reviews all RPT Policy matters.
The RPT Policy provides that any Transaction since the beginning of the last fiscal year is to be promptly reported to the Companys Secretary. The Secretary will assist with gathering important information about the Transaction and present the information to the Governance and Nominating Committee. The Governance and Nominating Committee will determine whether the Transaction is a Related Person Transaction and, if so, approve, ratify or reject the Related Person Transaction. In approving, ratifying or rejecting a Related Person Transaction, the Governance and Nominating Committee will consider such information as it deems important to conclude if the transaction is fair to the Company and its subsidiaries.
Motorola Solutions had no Related Person Transactions in 2015.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 13 |
SECURITY OWNERSHIP INFORMATION
Management and Directors
The following table sets forth information as of the close of business on March 10, 2016 (except where otherwise noted), regarding the beneficial ownership of shares of Common Stock by each director and nominee for director of the Company, the named executive officers (NEOs) in the Summary Compensation Table, and all current directors and executive officers of the Company as a group. Except for Mr. Brown, who owns 2% of the outstanding Common Stock, each other director and NEO owns less than 1% of the outstanding Common Stock based on 174,286,274 shares of Common Stock outstanding on March 10, 2016. All current directors, NEOs and executive officers as a group own 2.6% of the outstanding Common Stock.
Name | Shares Owned(1) | Shares Under Exercisable Options and SARs(2) |
Stock Units(3) | Total
Shares Beneficially Owned(4)(5) |
||||||||||||
Gregory Q. Brown |
479,494 | 2,891,317 | 52,549 | 3,423,360 | (6) | |||||||||||
Gino A. Bonanotte |
12,809 | 73,875 | 5,018 | 91,702 | ||||||||||||
Eduardo F. Conrado |
19,101 | 135,847 | 3,345 | 158,293 | ||||||||||||
Mark S. Hacker |
8,134 | 74,750 | 6,195 | 88,779 | ||||||||||||
Mark F. Moon (7) |
32,866 | 422,379 | 7,025 | 462,270 | ||||||||||||
Robert C. Schassler (8) |
2,025 | 31,327 | 0 | 33,352 | ||||||||||||
Kenneth C. Dahlberg |
9,984 | 0 | 7,043 | 17,027 | ||||||||||||
Egon P. Durban |
0 | 0 | 2,086 | 2,086 | ||||||||||||
Michael V. Hayden |
0 | 0 | 15,095 | 15,095 | ||||||||||||
Clayton M. Jones |
0 | 0 | 2,369 | 2,369 | ||||||||||||
Judy C. Lewent |
20,609 | 0 | 6,376 | 26,985 | ||||||||||||
Gregory K. Mondre |
0 | 0 | 2,086 | 2,086 | ||||||||||||
Anne R. Pramaggiore |
0 | 0 | 10,266 | 10,266 | ||||||||||||
Samuel C. Scott |
5,081 | 0 | 31,513 | 36,594 | (9) | |||||||||||
Bradley E. Singer |
0 | 8,650 | 8,650 | |||||||||||||
All current directors, NEOs and executive officers as a group (17 persons) |
599,782 | 3,690,968 | 159,616 | 4,450,366 |
(1) | Includes shares over which the person currently holds or shares voting and/or investment power but excludes the shares listed under Shares Under Exercisable Options and SARs and Stock Units. |
(2) | Includes shares under options and SARs exercisable on March 10, 2016 and which may become exercisable within 60 days thereafter (assuming all performance measures are satisfied). |
(3) | Includes stock units which are deemed to be beneficially owned on March 10, 2016 or within 60 days thereafter (assuming all performance measures are satisfied). Stock units are not deemed beneficially owned until the restrictions on the units have lapsed. Each stock unit is intended to be the economic equivalent of one share of Common Stock. |
(4) | Unless otherwise indicated, each person has sole voting and investment power over the shares reported. |
(5) | Includes the shares listed under Shares Under Exercisable Options and units listed under Stock Units. |
(6) | Mr. Browns holdings under Total Shares Beneficially Owned include: 277,863 shares subject to exercisable stock settled stock appreciation rights (SARs). The number of shares subject to the stock settled SARs, assumes the exercise of 134,297 shares of stock settled SARs at an exercise price of $40.33 and the exercise of 471,398 stock settled SARs at an exercise price of $38.04, on March 10, 2016. The closing price of the Company stock on March 10, 2016 was $71.22. Mr. Brown has shared voting and investment power over 83,220 shares, included under Total Shares Beneficially Owned. He disclaims beneficial ownership over 81,000 shares held in a trust of which his wife is trustee and 2,220 shares held by his wife, except to the extent of his pecuniary interest in these shares. |
(7) | Mr. Moons reported ownership is as of November 16, 2015, the date on which he ceased to be subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934 (Exchange Act). |
(8) | Mr. Schassler resigned from the Company effective as of January 15, 2016. Mr. Schasslers reported ownership is as of January 15, 2016, the date on which he ceased to be subject to the reporting requirements of Section 16 of the Exchange Act. |
(9) | Mr. Scott does not have investment power over 2,085 of these shares. |
No directors, nominees or current executive officers have pledged shares of Common Stock pursuant to any loan or arrangement.
14 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
Principal Stockholders
The following table sets forth information as of March 18, 2016 with respect to any person who is known to be the beneficial owner of more than 5% of Common Stock.
Name and Address | Number of
Shares of Motorola Solutions, Inc. and Nature of Beneficial Ownership |
Percent
of Outstanding Shares(1) |
||||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 |
|
15,081,983 shares of Common Stock |
(2)
|
8.6 | % | |||
Capital Research Global Investors 333 South Hope Street, 55th Floor Los Angeles, CA 90071 |
|
13,796,688 shares of Common Stock |
(3)
|
7.9 | % | |||
Orbis Investment Management Limited Orbis House, 25 Front Street Hamilton, Bermuda HM11 |
|
13,240,426 shares of Common Stock |
(4)
|
7.6 | % | |||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 |
|
9,246,438 shares of Common Stock |
(5)
|
5.3 | % |
(1) | The percentage calculations set forth above are based on 174,685,442 shares of Common Stock outstanding as of March 18, 2016 rather than the percentages set forth on various stockholders Schedule 13D and 13G filings. |
(2) | Solely based on information in a Schedule 13G/A Amendment No. 2 dated January 22, 2016 filed with the SEC by BlackRock, Inc. The Schedule 13G/A indicates that as of December 31, 2015, BlackRock, Inc., as the parent holding company, was the beneficial owner with sole voting power as to 13,561,926 shares and sole dispositive power as to 15,081,983 shares. |
(3) | Solely based on information in a Schedule 13G dated February 10, 2016 filed with the SEC by Capital Research Global Investors, a division of Capital Research and Management Company. The Schedule 13G indicates that as of December 31, 2015, Capital Research Global Investors was the beneficial owner with sole voting power and sole dispositive power as to 13,796,688 shares. |
(4) | Solely based on information in a Schedule 13G/A Amendment No.1 dated February 16, 2016 filed with the SEC jointly by Orbis Investment Management Limited, Orbis Asset Management Limited, and Orbis Investment Management (U.S.) LLC whose address is 600 Montgomery Street, Suite 3800, San Francisco, CA 94111 (collectively Orbis). The Schedule 13G/A indicates that as of December 31, 2015, Orbis was the beneficial owner with sole voting power and sole dispositive power as to 13,240,426 shares. |
(5) | Solely based on information in a Schedule 13G dated February 10, 2016 filed with the SEC by The Vanguard Group. The Schedule 13G indicates that as of December 31, 2015, The Vanguard Group was the beneficial owner with sole voting power and sole dispositive power as to 9,246,438 shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Each director and certain officers of the Company are required to report to the SEC, by a specified date, his or her transactions related to our Common Stock. Based solely on a review of the copies of reports furnished to the Company or written representations that no other reports were required, the Company believes that, during the 2015 fiscal year, all filing requirements applicable to its officers and directors were complied with on a timely basis.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 15 |
DETERMINING DIRECTOR COMPENSATION
The Governance and Nominating Committee recommends to the Board the compensation for non-employee directors, which is to be consistent with market practices of other similarly situated companies and takes into consideration the impact on non-employee directors independence and objectivity. The Board has asked the Compensation and Leadership Committee to assist the Governance and Nominating Committee in making such recommendations. The charter of the Governance and Nominating Committee does not permit it to delegate director compensation matters to management, and management has no role in recommending the amount or form of director compensation.
HOW THE DIRECTORS ARE COMPENSATED
The non-employee directors are compensated on an annual basis as follows:
Cash Compensation | Annual Compensation (paid quarterly) | |
Annual Cash Retainer | $100,000 | |
Lead Independent Director Fee | $25,000 | |
Audit Committee Chairperson Fee | $20,000 | |
Compensation and Leadership Committee Chairperson Fee |
$15,000 | |
Governance and Nominating Committee Chairperson Fee |
$15,000 | |
Audit Committee Member Fee | $5,000 | |
Equity Compensation | Annual Compensation (paid annually) | |
Annual Equity Grant | $140,000 |
During 2015, a director could elect to receive all or a portion of his or her annual cash retainer and other cash fees in the form of (i) deferred stock units (DSUs) that settle when the director terminates service, (ii) DSUs that settle after one year (unless service is earlier terminated), or (iii) outright shares. Directors could also elect to receive the annual equity grant in the form of (i) DSUs that settle when the director terminates service, or (ii) DSUs that settle after one year (unless service is earlier terminated). These choices allow directors to engage in tax planning appropriate for their circumstances. Notwithstanding earlier settlement or receipt of shares, directors must hold all shares awarded or paid to them until termination of service from the Board.
On May 18, 2015, each then non-employee director received a DSU award of 2,329 shares of Common Stock. The number of DSUs awarded was determined by dividing $140,000 by the fair market value of a share of Common Stock on the date of grant (rounded up to the next whole number) based on the closing price on the date of grant. For a non-employee director who becomes a member of the Board of Directors after the annual grant of deferred stock units, the award will be prorated based on the number of full months to be served until the next annual meeting of stockholders ($11,666.67 per month) divided by the closing price of the Common Stock on the day of election to the Board.
Non-employee directors are not eligible to participate in the Motorola Solutions Management Deferred Compensation Plan. Motorola Solutions does not have a non-equity incentive plan or pension plan for non-employee directors. Non-employee directors do not receive any additional fees for attendance at meetings of the Board or its committees, or for additional work done on behalf of the Board or a committee. The Company also reimburses its directors and, in certain circumstances, spouses who accompany directors, for travel, lodging and related expenses they incur in attending Board and committee meetings or other meetings as requested by Motorola Solutions. Mr. Brown, who was an employee during 2015, received no additional compensation for serving on the Board or its committees.
16 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
The following table further summarizes compensation paid to the non-employee directors during 2015.
Name (a) |
Fees
Earned or Paid in Cash ($)(1) (b) |
Stock (c) |
All
Other Compensation ($) (g) |
Total
($) (h) |
||||||||||||
Kenneth C. Dahlberg |
30,000 | 230,174 | | 260,174 | ||||||||||||
Egon P. Durban |
0 | 129,168 | | 129,268 | ||||||||||||
Michael V. Hayden |
70,000 | 170,116 | | 240,116 | ||||||||||||
Clayton M. Jones |
70,000 | 140,019 | | 210,019 | ||||||||||||
Judy C. Lewent |
120,000 | 140,019 | | 260,019 | ||||||||||||
Gregory K. Mondre |
0 | 129,168 | | 129,268 | ||||||||||||
Anne R. Pramaggiore |
50,000 | 190,093 | | 240,093 | ||||||||||||
Samuel C. Scott III |
125,417 | 140,019 | | 265,436 | ||||||||||||
Bradley E. Singer |
105,000 | 140,019 | | 245,019 | ||||||||||||
Former Director: |
||||||||||||||||
David W. Dorman(4) |
0 | 62,518 | 10,000 | (5) | 72,518 |
(1) | During 2015, directors could elect to receive all or a portion of their annual cash retainer or other cash fees in the form of (i) DSUs that settle when the director terminates service, (ii) DSUs that settle after one year (unless service is earlier terminated), or (iii) outright shares (in each case, rounded up to the next whole share). The amounts in column (b) are the portion of the annual cash retainer and any other fees the non-employee director has elected to receive in cash. With respect to annual cash compensation, Mr. Dahlberg elected to receive outright shares of stock with respect to $90,155 and DSUs that settle at termination with respect to $140,019; Ms. Lewent elected to receive DSUs that settle at termination or after one year, whichever is earlier, with respect to $140,019; and Mr. Dorman elected to receive DSUs that settle after one year with respect to $62,518. Messrs. Durban, Hayden, Jones, Mondre, Scott, Singer and Ms. Pramaggiore elected to receive DSUs that settle at termination of service with respect to the amounts set forth in column (c) above. |
(2) | The non-employee directors received an annual grant of DSUs on May 18, 2015, or, in the case of Messrs. Durban and Mondre, a pro-rated portion on August 25, 2015 when they were appointed to the Board. With respect to the annual grant of equity, Messrs. Dahlberg, Durban, Hayden, Jones, Mondre, Scott and Singer and Ms. Pramaggiore elected to receive DSUs that settle at termination of service, and Mr. Dorman and Ms. Lewent elected to receive DSUs that settle at termination or after one year, whichever is earlier, and these amounts are included in column (c). All amounts in column (c) are the aggregate grant date fair value of DSUs computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, CompensationStock Compensation (ASC Topic 718), including dividend equivalents, as applicable. The number of DSUs or shares of Common Stock received and the fair value on each date of grant are as follows: |
March 31 | May 18 | June 30 | August 25 | September 30 | December 31 | |||||||||||||||||||
Directors | Common Stock*/ Deferred Stock Units |
Annual Grant of Deferred Stock Units |
Common Stock*/ Deferred Stock Units |
Pro-Rata Annual Grant of Deferred Stock Units |
Common Stock*/ Deferred Stock Units |
Common Stock*/ Deferred Stock Units |
||||||||||||||||||
Kenneth C. Dahlberg |
338 | 2,329 | 393 | | 330 | 329 | ||||||||||||||||||
Fair Value |
$22,534 | $140,019 | $22,535 | $22,565 | $22,520 | |||||||||||||||||||
Egon P. Durban |
| | | 1,545 | 157 | 366 | ||||||||||||||||||
Fair Value |
$93,380 | $10,736 | $25,053 | |||||||||||||||||||||
Michael V. Hayden |
113 | 2,329 | 131 | | 110 | 110 | ||||||||||||||||||
Fair Value |
$7,534 | $140,019 | $7,512 | $7,522 | $7,529 | |||||||||||||||||||
Clayton M. Jones |
| 2,329 | | | | | ||||||||||||||||||
Fair Value |
$140,019 | |||||||||||||||||||||||
Judy C. Lewent |
| 2,329 | | | | | ||||||||||||||||||
Fair Value |
$140,019 | |||||||||||||||||||||||
Gregory K. Mondre |
| | | 1,545 | 157 | 366 | ||||||||||||||||||
Fair Value |
$93,380 | $10,736 | $25,053 | |||||||||||||||||||||
Anne R. Pramaggiore |
188 | 2,329 | 218 | | 183 | 183 | ||||||||||||||||||
Fair Value |
$12,534 | $140,019 | $12,500 | $12,514 | $12,526 | |||||||||||||||||||
Samuel C. Scott III |
| 2,329 | | | | | ||||||||||||||||||
Fair Value |
$140,019 | |||||||||||||||||||||||
Bradley E. Singer |
| 2,329 | | | | | ||||||||||||||||||
Fair Value |
$140,019 | |||||||||||||||||||||||
Former Director: |
||||||||||||||||||||||||
David W. Dorman |
469 | | 545 | | | | ||||||||||||||||||
Fair Value |
$31,268 | $31,250 |
* Common stock was issued to Mr. Dahlberg only. All other directors received DSUs.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 17 |
(3) | The aggregate number of Motorola Solutions DSUs and Restricted Stock includes accrued dividend equivalents or shares, as applicable. |
Directors | Deferred Stock Units | Restricted Stock |
||||||
Kenneth C. Dahlberg | 7,043 | | ||||||
Egon P. Durban | 2,086 | | ||||||
Michael V. Hayden | 15,095 | | ||||||
Clayton M. Jones | 2,369 | | ||||||
Judy C. Lewent | 6,376 | | ||||||
Gregory K. Mondre | 2,086 | | ||||||
Anne R. Pramaggiore | 10,266 | | ||||||
Samuel C. Scott III | 31,513 | 2,085 | ||||||
Bradley E. Singer | 8,650 | | ||||||
Former Director: | ||||||||
David W. Dorman* | 52,424 | |
* The total for Mr. Dorman is as of his retirement from the Board on May 18, 2015.
(4) | Mr. Dormans last day on the Board was May 18, 2015. |
(5) | This amount represents a matching gift contribution made by the Motorola Solutions Foundation at the request of the director to a charitable institution in the directors name pursuant to the Companys charitable matching gift program that is available to all U.S. employees and directors. |
Director Stock Ownership Guidelines
Our Board stock ownership guidelines provide that non-employee directors are expected to own Common Stock with a value equivalent to at least five times the annual cash retainer fee for directors within five years after the date of joining the Board. In addition, directors are required to hold all shares paid or awarded by the Company until their termination of service, other than shares acquired through the exercise of options awarded to directors. For the purposes of these guidelines, Common Stock includes deferred stock units. As of December 31, 2015, all non-employee directors were in compliance with the stock ownership guidelines.
DIRECTOR RETIREMENT PLAN AND INSURANCE COVERAGE
In 1996, the Board terminated its director retirement plan and no current non-employee directors are entitled to receive retirement benefits. In 1998, Mr. Scott, the only current director with an interest in the plan, converted his accrued benefits in the retirement plan into shares of restricted Common Stock. He may not sell or transfer these shares and these shares are subject to repurchase by Motorola Solutions until he is no longer a member of the Board because: (1) he does not stand for re-election or is not re-elected, or (2) of his disability or death.
Non-employee directors are covered by insurance that provides accidental death and dismemberment coverage of $500,000 per person. The spouse of each such director is also covered by such insurance when traveling with the director on business trips for the Company. The Company pays the premiums for such insurance. The total premiums for coverage of all such non-employee directors and their spouses during the year ended December 31, 2015 were $1,900.
18 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
PROPOSAL NO. 2 ADVISORY APPROVAL OF THE COMPANYS EXECUTIVE COMPENSATION |
In accordance with Section 14A of the Exchange Act we are providing our stockholders with the opportunity to vote to approve, on a nonbinding, advisory basis, the compensation of our NEOs as disclosed in this Proxy Statement. The Board has adopted a policy providing for annual say-on-pay advisory votes. Although the vote is non-binding, the Board and Compensation and Leadership Committee will review and consider the outcome of the vote when considering future executive compensation arrangements. In deciding how to vote on this proposal, the Board encourages you to read the Compensation Discussion and Analysis, below, for a detailed description of our executive compensation philosophy and programs. In particular, you should consider the following factors, which are more fully discussed in the Compensation Discussion and Analysis:
| We actively engage our stockholders on their views and consider this input when designing our executive compensation programs. |
| Our programs are designed to pay for performance, so a majority of the NEOs total compensation is based on the performance of the Company and 100% of their long-term incentives are performance-based. |
| Our executive compensation program incorporates many leading practices to ensure ongoing good governance, including eliminating the excise tax gross-up for our CEO in 2014. |
For the reasons discussed above, the Board unanimously recommends that stockholders vote in favor of the following resolution:
Resolved, that the stockholders approve, on an advisory basis, the compensation of the named executive officers, as described in the Compensation Discussion and Analysis, the 2015 Summary Compensation Table and other related tables and disclosures in this Proxy Statement.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPANYS EXECUTIVE COMPENSATION. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR THE APPROVAL OF THE COMPANYS EXECUTIVE COMPENSATION.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 19 |
Our Compensation Discussion and Analysis (the CD&A) describes Motorola Solutions executive compensation philosophy and programs which are governed by the Compensation and Leadership Committee (the Committee). The CD&A includes 2015 total compensation for our named executive officers (NEOs) who are listed below.
Named Executive Officer | Title | |
Gregory Q. Brown |
Chairman and Chief Executive Officer | |
Gino A. Bonanotte |
Executive Vice President and Chief Financial Officer | |
Mark S. Hacker |
Executive Vice President, General Counsel and Chief Administrative Officer | |
Robert C. Schassler |
Executive Vice President, Intl Sales & Services and Global Managed & Support Services | |
Eduardo F. Conrado |
Executive Vice President and Chief Strategy & Innovation Officer | |
Mark F. Moon |
Former Executive Vice President and President, Sales & Marketing |
In 2015, we continued efforts to position Motorola Solutions for long-term success with a focus on driving improved profitability and free cash flow growth. Overall, sales were down 3% over the prior year, driven in part by significant currency headwinds, while operating earnings and operating cash flow were up significantly. This improved profitability and cash generation was due in large part to more than $200 million in operating expense reductions and a focus on working capital efficiency. Despite the structural cost reductions, the Company has continued making targeted investments and R&D expenditures in key growth areas including Managed & Support Services and Smart Public Safety Solutions. We expect these new investments will help accelerate growth in our Managed & Support Services business, which is evident in our ending backlog, which grew by approximately $700 million in 2015. We have demonstrated success in the growth area of public safety LTE, as the Company has deployed or been awarded the four largest public safety LTE projects in the world with aggregate multi-year values exceeding $800 million. Our new strategic partnership with Silver Lake also demonstrates their strong vote of confidence in our strategy and opportunities. 2015 capped off another strong year of capital return to stockholders. We returned $3.5 billion in capital to stockholders through $3.2 billion in share repurchases and $277 million in dividends. The Company has returned over $12 billion in capital since 2011. A stronger 2015 improved our longer-term total shareholder return, which was 40% over the 2013-2015 three-year period.
The Silver Lake Investment
When we entered into the Investment Agreement with Silver Lake and issued the Notes, Motorola Solutions agreed to expand the size of the Board and appoint two Silver Lake nominees, Egon Durban and Greg Mondre, to the Board of Directors. Further, at the time of the issuance of the Notes to Silver Lake, a select group of senior executives, including most of our NEOs, received a grant of performance-contingent stock options (PCSOs) to provide further incentive to deliver returns to our stockholders. The PCSOs are not intended to be a component of our core, ongoing compensation program for executives, and we have no plans to make another similar award in 2016.
20 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
The PCSOs are premium-priced, performance-based options with an exercise price of $68.50 per share (our stock price was $60.44 on the date of grant) and a seven-year term. As detailed in the table below, the PCSOs vest based on the attainment of certain escalating stock price hurdles within the three-year period from the date of grant and they cannot be exercised prior to the third anniversary of the date of grant. The PCSOs are designed to ensure delivery of meaningful returns to our stockholders before executives realize any value. Any PCSOs that do not vest within the three-year period are forfeited. As of March 18, 2016, none of the stock price hurdles had been met, and thus, no portion of the PCSOs had vested.
% of Award Vesting |
Stock Hurdle1 |
Appreciation Exercise Price |
CAGR2 | |||||||||
20% |
$85.00 | 24 | % | 7 | % | |||||||
30% |
$102.50 | 50 | % | 14 | % | |||||||
50% |
$120.00 | 75 | % | 21 | % |
1 | Stock price must be met within three years of the grant date and maintained for ten consecutive trading days. |
2 | Compound annual growth rate |
Our 2015 Performance Did Not Meet Our Operating Plan;
Our 2013-2015 Performance Delivered Improved Returns To Our Stockholders
Our 2015 business performance was improved over 2014, but was slightly below our operating plan. Our three-year performance ending in 2015 showed increased returns to our stockholders driven primarily by a strong 2015. As a result of our performance, and consistent with our pay for performance philosophy, our incentive plans paid out as follows:
| Our 2015 Executive Officer Short Term Incentive Plan (STIP) resulted in a slightly below target payout, reflecting our operating earnings result below our operating plan and free cash flow result above our operating plan; and |
| Our 2013-2015 Long Range Incentive Plan (LRIP), which is based on Motorola Solutions total shareholder return (TSR) relative to our comparator group, resulted in a below target payout. |
Our NEOs 2015 total compensation was higher than their 2014 total compensation, which was a result of two factors:
1. | Payouts under our STIP (88% of target) and LRIP (75% of target) were below target, but were higher than those achieved under both plans in 2014 (STIP at 30% and LRIP at 0%); and |
2. | Target long-term incentive awards designed to deliver competitive total direct compensation were followed by a subsequent award of PCSOs granted in conjunction with Silver Lakes investment in the Company |
2015 Actions
Our compensation program is critical to our ability to attract, retain and motivate key talent necessary to deliver on our purpose to help people be their best in the moments that matter. As part of our continuous review of our compensation program and consideration of ongoing feedback from investors, two changes were made to our compensation program for our management executive committee, which includes all NEOs, in 2015.
| Following the sale of our Enterprise business in late 2014, the comparator group used to assess the market competitiveness of pay and performance for our NEOs was reviewed and modified to reflect the new composition and size of our Company. We removed Danaher, Eaton and NCR and added ARRIS International, Amphenol, Juniper Networks and Roper Technologies in an effort to use a comparator group that more closely aligns with our business mix and size. Median revenue and market capitalization of this new comparator group is consistent with our current business. The Committee utilized this new comparator group when making pay decisions for 2015. |
| We introduced a new long-term incentive design for our management executive committee, which is 100% performance-based with a focus on sustained long-term performance. This new design links one-third of the total long-term incentives to absolute stock price performance and two-thirds to relative TSR, and only provides a target payout once performance exceeds the median of the S&P 500 companies comparator group. |
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 21 |
2015 Compensation Program Overview
Our regular, annual compensation program included a mix of the following fixed and variable elements:
22 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
Our Incentive Compensation Program Based On 2015 Performance Resulted In Below Target Payouts;
Our Incentive Compensation Program Based On 2013-2015 Total Shareholder Return Resulted In Below Target Payouts
To support our pay for performance philosophy, our 2015 executive compensation program used a mix of fixed and at-risk elements to align with short- and long-term business goals through short- and long-term incentives.
Our STIP is tied to achieving operating earnings and free cash flow targets to measure what enables the Company to invest in future growth and appropriately return capital to stockholders. These two measures are commonly tracked by investors and we believe that they provide useful information to investors as a measure of the strength and sustainability of our business model, while also driving long-term, sustainable stockholder value.
Our long-term incentive program provides awards that are earned and vest based on stock price appreciation or relative TSR, not only to reward long-term stock price appreciation, but also to ensure that value delivered to our stockholders through TSR exceeds that of our comparator companies.
In 2015, we began to see growth in operating earnings and operating cash flow, but performance had not yet returned to desired levels, which resulted in a below target payout under our STIP. Our 2013 to 2015 TSR (stock price appreciation plus dividends) was 40% over the three-year period, which resulted in a #8 out of 14 rank in our comparator group. This performance equated to a payout of 75% of target under our 2013-2015 LRIP. See Long Range Incentive Plan for comparator group details.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 23 |
Response to 2015 Stockholder Vote and Stockholder Engagement Process
At the 2015 Annual Meeting, our stockholders approved the advisory vote on our executive compensation with 97% support. We believe this is in large part due to program changes over the past several years that have been maintained and created a fundamentally sound program aligned with stockholder interests.
In November and December 2015, we reached out to stockholders holding approximately 45% of our shares in the aggregate to seek feedback on our governance and compensation programs, some of whom noted that they had no issues with our programs and declined our request for engagement. With the stockholders who accepted our request for feedback, we discussed the investment by Silver Lake, the PCSOs we granted at the time of the investment and our incentive program design, all of which received generally positive feedback. The investors with whom we spoke expressed no major concerns about the current executive compensation program, including pay programs, approach and overall governance.
Our stockholder engagement process is not just a one-time event; we have ongoing investor relations efforts in place including monitoring best practices, engaging investors and stockholder groups on pay topics and seeking ongoing feedback on pay practices and corporate governance. We actively and periodically engage with our stockholders to request their views of our compensation programs and individual pay actions and take that information into consideration when assessing and evaluating potential changes to our executive compensation programs. In addition, we conduct outreach efforts two times a year that are focused on institutional investors with larger stockholdings, stockholder advocates and proxy advisory firms. Our November/December outreach is designed to gain feedback on the results of the previous Annual Meeting and input on our pay programs and disclosures. Our March/April outreach is designed to answer questions and provide clarifications, if necessary, leading up to the Annual Meeting and ensure stockholders are effectively informed about our programs in advance of the advisory vote on executive compensation.
24 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
We continue to focus on sustained engagement efforts each year and remain committed to taking into account the results of future stockholder votes and ongoing dialogues with our stockholders when reviewing our compensation program and practices.
Our Executive Compensation Program is Aligned to our Business Strategy and Features Many Leading Practices
A significant percentage of target total direct compensation, 90% for the CEO, is at risk and linked to actual performance. |
Performance measures are linked to near-term operating objectives and delivery of long-term value to stockholders through both relative and absolute stock price performance. |
The long-term incentive program established in 2015 is 100% performance-based. |
The Committee retains an independent compensation consultant to review the Companys compensation program and practices. |
The independent compensation consultant reviews our pay and performance relationship annually with the Committee. |
Our performance-based plans (STIP, LRIP, performance options and market stock units) are subject to maximum payout caps. |
In the event of a change-in-control, long-term equity incentives have a double trigger; that is, outstanding equity awards will not vest in the event of a change-in-control unless also accompanied by a qualifying termination of employment. Accelerated vesting at a change-in-control is only provided if the acquirer does not assume or replace the outstanding equity awards. |
The Company provides limited executive perquisites and no excise tax gross-ups. |
Executives are required to hold stock equal to 6x salary for the CEO and 3x salary for each of the NEOs. |
Compensation is subject to claw-back in the event of certain financial restatements. |
Hedging of Company securities is prohibited. |
No NEOs have pledged any Company equity. |
We conduct regular risk assessments of our compensation programs and practices. |
We Focus on Talent Management and Link Talent and Pay Decisions
Our talent programs foster the development of globally diverse executives from within our own organization. This philosophy encourages our key talent to adopt a long-term focus on our business and avoids lengthy and disruptive transitions associated with extensive external hiring. Our pay decisions support our talent objectives by not only considering individual and Company performance, but also considering long-term potential, inclusion and diversity efforts, key retention needs and organizational succession plans. We use a multi-faceted process to develop our executives, including new and expanded job assignments, formal learning, and coaching and engagement with our management executive committee, our CEO and the Board. This approach drives increased engagement and retention by demonstrating investment in our executives that builds their long-term value to the organization.
Independent Experts Guide Program Development
The Committee engages an independent consultant, Compensation Advisory Partners LLC (CAP), to advise on the Companys executive compensation strategy and program design and to provide regulatory and market trend updates. CAP carries out compensation reviews as directed by the Committee and provides recommendations on specific compensation for our CEO and input on specific compensation recommendations for our other executive officers.
In 2015, the Committee continued to engage CAP as its independent compensation consultant. CAP participates in Committee meetings, including regular discussions with the Committee, without management present, to ensure impartiality on certain decisions. During 2015, the Committee also reviewed the independence of CAP using assessment criteria that aligned with the SEC and related NYSE rules adopted in 2012. The Committee concluded that CAP was independent and had no conflicts of interest.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 25 |
2015 EXECUTIVE COMPENSATION PROGRAM
Compensation Philosophy, Practices and Program Design Inputs
Our philosophy is to provide reward programs that attract, retain and motivate the right people, in the right place, at the right time. We strive to provide a total compensation package that is competitive with the prevailing practices in the industries and countries in which we operate, allowing for above average total compensation when justified by business results and individual performance. Program design is guided by these principles:
Principle | Description | |
Business Driven |
Incentives are aligned with the Companys business goals and avoid excessive risk taking | |
Performance Differentiated |
Programs create an effective link between pay and performance at both the Company and individual level | |
Market Competitive |
Total compensation package is competitive to attract, retain and motivate top talent needed to successfully execute our business strategy | |
Ownership Oriented |
Compensation is aligned with stockholder interests by delivering meaningful equity awards and maintaining robust stock ownership guidelines | |
Simplicity |
Employee engagement is driven through simple, cost-efficient plan design |
The Committee reviews the executive compensation program design and executive pay levels annually. As part of this annual review, CAP provided executive compensation market data, information on current market practices and trends, and alternatives to consider for determining compensation for our Section 16 Officers, including the NEOs. The Committee benchmarked our compensation program design, executive pay and performance against a group of comparator companies that are publicly traded and comparable to Motorola Solutions in market segment, product offerings, revenue and market value. The Committee believes Motorola Solutions competes against these companies, including for executive talent and stockholder investment.
The Committee reviews the composition of the comparator group annually with the assistance of CAP. Following the sale of our Enterprise business in late 2014, our comparator group was modified in 2015 to reflect the new size and composition of our Company by removing Danaher, Eaton and NCR and adding ARRIS International, Amphenol, Juniper Networks and Roper Technologies. This comparator group is used exclusively for pay and performance benchmarking and is no longer used for relative TSR measurement comparisons in the LRIP for the 2015-2017 cycle.
2015 Comparator Group
Agilent Technologies, Inc. |
Harris Corp. |
Raytheon Company |
Roper Technologies, Inc. | |||
Amphenol Corp. |
Ingersoll-Rand plc |
Rockwell Automation Inc. |
TE Connectivity Ltd. | |||
ARRIS International plc |
Juniper Networks, Inc. |
Rockwell Collins, Inc. |
Tyco International Ltd. | |||
Dover Corp. |
Parker-Hannifin Corp |
To supplement our comparator group data, the Committee also considers compensation surveys that include data from companies of similar size and business segments to Motorola Solutions. Surveys considered in the 2015 review included:
Survey | Publisher | |
Radford Global Technology Survey |
Radford, an Aon Hewitt consulting company | |
IPAS Global High Technology Survey |
Salary.com |
26 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
While the Committee uses the 50th percentile of our comparator group as a guideline for establishing target total compensation for our NEOs, each NEOs target total compensation position relative to market varies due to the Committees consideration of additional factors such as role, scope of accountabilities, experience, individual performance and market practices when setting total target compensation. When setting 2015 compensation in the first quarter of the year, the Committee evaluated each NEOs target compensation relative to market compensation and found as follows:
Position | NEO | |
Total compensation between the 50th percentile and 75th percentile market | Brown, Moon and Schassler | |
Total compensation at the 50th percentile market |
Conrado and Hacker | |
Total compensation between the 25th percentile and the 50th percentile market |
Bonanotte |
A significant portion of our NEOs compensation is delivered through both short- and long-term incentives linked to financial and stock price performance, with a large percentage based on relative performance.
Base Salary
Base salaries are set by the Committee with the Boards concurrence for the CEO. When setting the base salary level for each NEO, the Committee considers many factors, including: the 50th percentile of the market data, external market conditions, individual performance, experience, internal comparisons, and succession plans.
Short-term Incentives
The STIP is an annual cash incentive award based on Motorola Solutions achievement of financial performance measures and an executives individual performance.
Actual awards are based on the executives target incentive award opportunity, Motorola Solutions achievement of performance results (Business Performance Factor) and assessment of individual performance (Individual Performance Factor). The payout range for both the Business Performance Factor and the Individual Performance Factor is from 0% to 140%, resulting in a total plan maximum payout opportunity of 196% of target. The incentive target opportunity for each NEO was determined based on market data.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 27 |
For 2015, the Business Performance Factor was based on achievement of operating earnings (weighted 65%) and free cash flow (weighted 35%) goals. Operating earnings measures our profits from sales and free cash flow measures the cash available after capital expenditures. These are common performance measures both inside and outside of our industry, and are fundamental inputs we use to measure profitability, business liquidity and rates of return for the business. We believe operating earnings and free cash flow appropriately measure our annual business performance, and ultimately our long-term stockholder value.
A rigorous process is used at the start of each year to determine the range of performance for each measure and includes an analysis of factors such as: prior year financial results, market share, projected revenue growth, margins and operating expenditures and other macroeconomic and industry considerations. The operating earnings and free cash flow targets and performance ranges for the 2015 STIP were aligned with the 2015 operating plan that was approved by the Board in the first quarter of 2015. The range of performance and 2015 results are shown in the following table:
Business Performance Measure |
Minimum | Target | Maximum | 2015 Result |
Business Performance Factor |
Measure Weight |
Weighted Result |
|||||||||||||||||||||
Operating Earnings1 (in millions) |
$1,050 | $1,235 | $1,420 | $1,166 | 0.81 | 65 | % | 0.53 | ||||||||||||||||||||
Free Cash Flow2 (in millions) |
$619 | $825 | $990 | $835 | 1.01 | 35 | % | 0.35 | ||||||||||||||||||||
TOTAL |
0.88 |
1 | Operating Earnings is our reported Non-GAAP operating earnings, which does not include reorganization of business, stock based compensation, and intangible amortization. |
2 | Free Cash Flow is defined as net cash provided by operating activities less capital expenditures. |
The Individual Performance Factor for each NEO is discussed in more detail below in Compensation Decisions for 2015.
Long-term Incentives
Our regular, annual Long-term Incentives (LTI) are delivered through a portfolio of three vehicles, all of which are performance-based and designed to achieve a balancing of objectives within the overall program. The objective of our LTI program is to incentivize our NEOs to:
¡ | Focus on performance metrics that drive long-term value creation for stockholders. |
¡ | Outperform the S&P 500 comparator companies. |
¡ | Achieve the highest, sustainable stock price over time. |
The LTI program includes a long range incentive plan (LRIP), performance stock options (POs) and market stock units (MSUs). The LRIP and POs (two-thirds of the total LTI opportunity) are based on relative TSR and the MSUs (one-third of the total LTI opportunity) are based on absolute stock price, making the program 100% performance-based. Inclusion of the MSUs in the portfolio is also critical to provide a vehicle to assist in retaining our executives once performance is achieved. The LTI pays out one-third in cash (the LRIP) and two-thirds in equity (the POs and MSUs).
28 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
For both POs and MSUs, the number earned increases/decreases in relation to performance and unearned POs and MSUs are forfeited at the end of the performance period. The payout scale for the POs is detailed below. For MSUs, each 1% increase/decrease in stock price results in a 1% increase/decrease in the number of MSUs earned at the end of the performance period with a maximum payout at 100% stock price appreciation and a threshold of 40% stock price depreciation, below which no MSUs are earned. To further reinforce the performance nature of the program, the payout scale for the LRIP and POs requires performance to exceed median performance of the group before a target payout is earned. The comparator group used to measure relative performance is the S&P 500, which we believe is the broader industry group with which we compete for stockholder investment.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 29 |
Long Range Incentive Plan
The LRIP is a performance-based, multi-year incentive plan for our senior executives, including the NEOs. We maintain overlapping three-year cycles with grants made annually, and we currently have three active cycles (2014-2016, 2015-2017 and 2016-2018). The Committee determines the total LTI value with reference to market levels through benchmarking completed by CAP. The LRIP was designed to deliver one-third of that LTI value. Each cycle prior to the 2015-2017 performance cycle uses a comparator group made up of peer companies for relative TSR measurement that is the same as the group used in our pay and performance analysis at that time. A TSR payout factor is determined by calculating the Companys TSR rank within the comparator group based on the approved payout scale detailed below. Beginning with the 2015-2017 performance cycle, the S&P 500 is the comparator group used for relative TSR measurement. A TSR payout factor is determined by calculating the Companys TSR percentile rank within the S&P 500 based on the approved payout scale detailed below. For both methodologies, the TSR calculation uses a three-month average stock price at the beginning (three months preceding performance cycle start) and end (final three months in performance cycle, plus value of reinvested dividends) of the period for measurement purposes. This approach minimizes the impact of a single beginning and ending point stock price for each performance cycle.
If the resulting TSR performance for Motorola Solutions is negative, but would still result in a ranking that would provide a payout, the Committee will have discretion to reduce the calculated payout by up to 25%.
Comparator companies are reviewed annually and are not changed for any established performance cycle once they are approved by the Committee.
30 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
Performance Options and Market Stock Units
In 2015, the Committee granted POs and MSUs under our Omnibus Plan (defined below) to the NEOs. The POs are earned and vest based on relative TSR performance at the end of the three year performance period based on the payout scale described above for the 2015-2017 LRIP. The MSUs are earned and vest based on stock price appreciation/depreciation at the first, second and third anniversaries of the date of grant with respect to one-third of the grant for each of the three time periods.
Timing and Grant Practices of Global Equity Awards
In 2012, we implemented significantly reduced eligibility for our Company-wide annual equity grant and maintained eligibility for special grants on a highly selective basis to align our stock-based compensation programs to market and reduce our annual share usage rate and stock-based compensation expense.
As a result of these changes, our share usage (equity grants as a percentage of common shares outstanding) since 2012 was significantly reduced. This reduced share usage has also caused a decrease in our stock-based compensation expense since 2012, as the expense from previous grants made to a broader population becomes fully recognized. In addition, at the 2015 Annual Meeting, stockholders approved the Motorola Solutions 2015 Omnibus Incentive Plan, which was an amendment and restatement of the Motorola Solutions Omnibus Incentive Plan of 2006 (the Omnibus Plan), which reduced by approximately 7 million shares, to 12 million shares, the total number of shares reserved and approved for issuance. We plan to continue to closely manage our equity granting practices to ensure our share usage and stock-based compensation expense remain in line with competitive levels.
In 2015, our annual equity awards were made in the first quarter of the year to allow the Company to better align the receipt of equity awards with the assessment of prior year performance and achievement of business goals. We do not structure the timing of equity awards to precede or coincide with the disclosure of material non-public information. All equity grants made to Section16 officers are approved by the Committee, with concurrence by the Board for grants to the CEO.
The Committee has also delegated authority to the most senior human resources executive to make off-cycle equity grants to newly hired or promoted employees, in recognition of outstanding achievement or for retention. These types of grants are made on the first trading day of each month.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 31 |
Executive Benefits and Perquisites
To enhance our ability to attract and retain talented executives in a highly competitive talent market, we provide the benefits and perquisites detailed in the following table:
Benefit or Perquisite | Named Executives |
Other Executives and Managers |
All Eligible Full-Time Employees | |||
Retirement1, Saving and Stock Purchase Plans |
||||||
Health and Welfare Benefits2 |
||||||
Deferred Compensation |
||||||
Financial Planning |
Vice Presidents | |||||
Executive Physicals |
Executive & Senior VPs | |||||
Security System Monitoring |
CEO | |||||
Personal Use of Corporate Provided Aircraft3 |
CEO |
1 Pension provided to US-based eligible employees hired prior to Jan 1, 2005.
2 Includes medical, dental, vision, group life insurance, business travel accident insurance, short- and long-term disability and work life programs.
3 In limited circumstances, and as approved by the CEO, other employees are permitted to use our corporate provided aircraft for personal purposes.
COMPENSATION DECISIONS FOR 2015
Gregory Q. Brown, Chairman and Chief Executive Officer
Mr. Browns total target compensation was lower than 2014 target compensation due to lower total LTI. However, reflecting an improved performance year in 2015, Mr. Browns actual compensation increased from 2014 due to a higher STIP award than the prior year, a payout under our LRIP that exceeded the zero payout for the 2012-2014 cycle that ended in December 2014 and the grant of PCSOs in connection with the Silver Lake Investment.
ELEMENT | TARGET COMPENSATION* |
ACTUAL COMPENSATION |
FACTORS INFLUENCING AMOUNT | |||||||||||||||||||||||
BASE SALARY |
$1,250,000 | $1,250,000 | ||||||||||||||||||||||||
STIP AWARD |
$1,875,000 | $1,650,000 | Annual Salary | x | Target | x | BPF | x | IPF | = | STIP Award | |||||||||||||||
$1,250,000 | 150% | 0.88 | 1.0 | $1,650,000 | ||||||||||||||||||||||
TOTAL CASH COMPENSATION | $3,125,000 | $2,900,000 | Mr. Brown continued to transform the Company into a singularly focused leader in mission-critical communications and took important actions to better position the Company for operating leverage and free cash flow generation in future years. The Company acquired Airwave for $1B, secured a $1B investment from Silver Lake to help accelerate software and services growth initiatives, outsourced Penang manufacturing, and secured two additional Public Safety LTE contracts which now positions the Company with the four largest Public Safety LTE contracts in the world. We ended the year with record backlog of $6.5B and returned $3.5B in capital to stockholders. | |||||||||||||||||||||||
LTI CASH PAYMENT (2013-2015 LRIP) |
$3,000,000 | $2,250,000 | 2013 Cycle Base Salary $1,200,000 |
x |
Target 250% |
x | TSR Payout Factor 75% |
= | LRIP Award $2,250,000 | |||||||||||||||||
Relative TSR rank of #8 resulted in 75% of target payout | ||||||||||||||||||||||||||
LTI |
2015-2017 LRIP |
$3,125,000 | | Base Salary | x | Target | = | LRIP Target | ||||||||||||||||||
$1,250,000 | 250% | $3,125,000 | ||||||||||||||||||||||||
Payout based on relative TSR performance through 2017 | ||||||||||||||||||||||||||
PERFORMANCE OPTIONS |
$2,312,500 | $2,312,487 | Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold. | |||||||||||||||||||||||
PCSOs | | $3,127,943 | ||||||||||||||||||||||||
MSUs | $2,312,500 | $2,312,480 | ||||||||||||||||||||||||
2015 TOTAL COMPENSATION |
$10,875,000 | $12,902,910 | Actual Total Compensation is listed in Summary Compensation Table |
* | Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment) |
32 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
Gino A. Bonanotte, Executive Vice President and Chief Financial Officer
Following more substantial pay adjustments for Mr. Bonanotte in 2014 to move him to a more competitive market position, total target compensation was only modestly higher in 2015 primarily due to a 2.4% increase in base salary and the grant of the PCSOs.
ELEMENT | TARGET COMPENSATION* |
ACTUAL COMPENSATION |
FACTORS INFLUENCING AMOUNT | |||||||||||||||||||||||
BASE SALARY |
$625,000 | $622,404 | In March 2015, the Committee approved a base salary increase from $610,000 to $625,000. | |||||||||||||||||||||||
STIP AWARD |
$593,750 | $520,330 | Eligible Earnings | x | Target | x | BPF | x | IPF | = | STIP Award | |||||||||||||||
$622,404 | 95% | 0.88 | 1.0 | $520,330 | ||||||||||||||||||||||
TOTAL CASH COMPENSATION | $1,218,750 | $1,142,734 | Mr. Bonanotte successfully executed our 2015 capital allocation strategy, resulting in the return of $3.5B in capital to stockholders. He also managed the acquisition of Airwave, structured the $1B Silver Lake investment, led the outsourcing of Penang manufacturing and drove more than $200M of Company-wide cost reductions. | |||||||||||||||||||||||
LTI CASH PAYMENT (2013-2015 LRIP) |
$282,510 | $211,883 | 2013 Cycle Base Salary |
x |
Target | x |
TSR Payout Factor | = |
LRIP Award | |||||||||||||||||
$300,000 | 94.17% | 75% | $211,883 | |||||||||||||||||||||||
Relative TSR rank of #8 resulted in 75% of target payout | ||||||||||||||||||||||||||
LTI |
2015-2017 LRIP |
$666,666 | | Payout based on relative TSR performance through 2017 | ||||||||||||||||||||||
PERFORMANCE OPTIONS |
$666,667 | $666,664 | Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold. | |||||||||||||||||||||||
PCSOs | | $637,178 | ||||||||||||||||||||||||
MSUs | $666,667 | $666,642 | ||||||||||||||||||||||||
2015 TOTAL COMPENSATION |
$3,218,750 | $3,325,101 | Actual Total Compensation is listed in Summary Compensation Table |
* | Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment) |
Mark S. Hacker, Executive Vice President, General Counsel and Chief Administrative Officer
Key Talent Management Actions Promoted in 2015 to include Chief Administrative Officer
Mr. Hackers role continued to expand in 2015 by adding accountability for human resources and global marketing to his previous role and promotion to Chief Administrative Officer. At the time of his promotion, Mr. Hacker received a 4.1% base salary increase and a $200,000 equity award delivered $100,000 in stock options and $100,000 in RSUs.
ELEMENT | TARGET COMPENSATION* |
ACTUAL COMPENSATION |
FACTORS INFLUENCING AMOUNT | |||||||||||||||||||||||
BASE SALARY |
$510,000 | $507,488 | In January 2015, the Committee approved a base salary increase from $480,000 to $500,000 in recognition of Mr. Hackers promotion to CAO. In March 2015, the Committee approved an additional base salary increase to $510,000. | |||||||||||||||||||||||
STIP AWARD |
$484,500 | $424,260 | Eligible Earnings | x | Target | x | BPF | x | IPF | = | STIP Award | |||||||||||||||
$507,488 | 95% | 0.88 | 1.0 | $424,260 | ||||||||||||||||||||||
TOTAL CASH COMPENSATION | $994,500 | $931,748 | In early 2015, Mr. Hacker was promoted to Chief Administrative Officer and his role was expanded to include oversight for global marketing and human resources. Mr. Hacker made leadership and organizational changes that resulted in increasing his teams impact while achieving cost reductions of 17% compared to last year. He successfully supported the Airwave and Silver Lake transactions, managed litigation to favorable resolutions, enhanced the Companys brand narrative to emphasize its software and services growth initiatives, and transitioned U.S. healthcare to a private exchange. He also brought renewed focus to diversity and inclusion and formalized the Companys leadership succession planning process. | |||||||||||||||||||||||
LTI CASH PAYMENT (2013-2015 LRIP) |
$290,155 | $217,616 | 2013 Cycle Base Salary |
x |
Target | x |
TSR Payout Factor | = |
LRIP Award | |||||||||||||||||
$300,150 | 96.67% | 75% | $217,616 | |||||||||||||||||||||||
Relative TSR rank of #8 resulted in 75% of target payout | ||||||||||||||||||||||||||
LTI |
2015-2017 LRIP |
$500,000 | | Payout based on relative TSR performance through 2017 | ||||||||||||||||||||||
PERFORMANCE OPTIONS |
$500,000 | $599,986 | Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold. | |||||||||||||||||||||||
PCSOs | | $637,178 | ||||||||||||||||||||||||
MSUs | $500,000 | $593,740 | ||||||||||||||||||||||||
2015 TOTAL COMPENSATION |
$2,494,500 | $2,980,268 | Actual Total Compensation is listed in Summary Compensation Table |
* | Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment) |
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 33 |
Robert C. Schassler, Executive Vice President, Intl Sales and Services and Global Managed & Support Services
On December 31, 2015, Mr. Schassler resigned from the Company, effective as of January 15, 2016, to take a position with another company. The pay actions described below reflect those made while Mr. Schassler remained in his previous role.
ELEMENT | TARGET COMPENSATION* |
ACTUAL COMPENSATION |
FACTORS INFLUENCING AMOUNT | |||||||||||||||||||||
BASE SALARY |
$513,000 | $510,750 | In March 2015, the Committee approved a base salary increase from $500,000 to $513,000. | |||||||||||||||||||||
STIP AWARD |
$487,350 | $426,987 | Eligible Earnings | x | Target | x | BPF | x | IPF | = | STIP Award | |||||||||||||
$510,750 | 95% | 0.88 | 1.0 | $426,987 | ||||||||||||||||||||
TOTAL CASH COMPENSATION
|
$1,000,350 | $937,737 | Mr. Schassler grew our Managed and Support Services and Smart Public Safety businesses and increased backlog by $658M. | |||||||||||||||||||||
LTI CASH PAYMENT (2013-2015 LRIP) |
$332,046 | $249,035 | 2013 Cycle Base Salary |
x |
Target | x |
TSR Payout Factor | = |
LRIP Award | |||||||||||||||
$430,000 | 77.22% | 75% | $249,035 | |||||||||||||||||||||
Relative TSR rank of #8 resulted in 75% of target payout | ||||||||||||||||||||||||
LTI |
2015-2017 LRIP |
$433,334 | | Payout based on relative TSR performance through 2017; participation in this LRIP cycle was forfeited upon resignation from the Company. | ||||||||||||||||||||
PERFORMANCE OPTIONS |
$433,333 | $433,323 | Represents grant date fair value pursuant to ASC Topic 718; all POs, PCSOs and MSUs forfeited upon resignation from the Company. | |||||||||||||||||||||
PCSOs | | $637,178 | ||||||||||||||||||||||
MSUs | $433,333 | $433,299 | ||||||||||||||||||||||
2015 TOTAL COMPENSATION |
$2,300,350 | $2,690,572 | Actual Total Compensation is listed in Summary Compensation Table |
* | Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment) |
Eduardo F. Conrado, Executive Vice President and Chief Strategy & Innovation Officer
Key Talent Management Actions Role expanded in 2015 to include Chief Strategy Officer
Mr. Conrado was promoted to Executive Vice President in August when his role expanded to include accountability for strategy. At the time of his promotion, Mr. Conrado received a 5.6% base salary increase to recognize his expanded responsibilities.
ELEMENT | TARGET COMPENSATION* |
ACTUAL COMPENSATION |
FACTORS INFLUENCING AMOUNT | |||||||||||||||||||||||
BASE SALARY |
$465,000 | $448,750 | In March 2015, the Committee approved a base salary increase from $435,000 to $440,000 and in August 2015 approved an additional 5.6% increase at the time of his promotion. | |||||||||||||||||||||||
STIP AWARD |
$441,750 | $325,820 | Eligible Earnings | x | Target | x | BPF | X | IPF | = | STIP Award | |||||||||||||||
$448,750 | 82.5% | 0.88 | 1.0 | 325,820 | ||||||||||||||||||||||
TOTAL CASH COMPENSATION | $906,750 | $774,570 | Mr. Conrado was promoted in August 2015 when his role was expanded to include Strategy. Mr. Conrado enhanced our technology and solutions portfolio through a combination of organic investments and acquisitions. Mr. Conrado made organizational changes in strategy, chief technology office, and information technology to refresh leadership talent. He also made significant improvements in the employee communication and collaboration tools by transitioning the Company from Microsoft to Google. | |||||||||||||||||||||||
LTI CASH PAYMENT (2013-2015 LRIP) |
$287,014 | $215,261 | 2013 Cycle Base Salary |
x |
Target | x |
TSR Payout Factor | = |
LRIP Award | |||||||||||||||||
$415,000 | 69.16% | 75% | $215,261 | |||||||||||||||||||||||
Relative TSR rank of #8 resulted in 75% of target payout | ||||||||||||||||||||||||||
LTI |
2015-2017 LRIP |
$413,250 | | Payout based on relative TSR performance through 2017 | ||||||||||||||||||||||
PERFORMANCE OPTIONS |
$333,333 | $333,332 | Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold. | |||||||||||||||||||||||
PCSOs | | $637,178 | ||||||||||||||||||||||||
MSUs | $333,333 | $333,321 | ||||||||||||||||||||||||
2015 TOTAL COMPENSATION |
$1,986,666 | $2,293,662 | Actual Total Compensation is listed in Summary Compensation Table |
* | Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment) |
34 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
Mark F. Moon, Former Executive Vice President and President, Sales & Marketing
Mr. Moon no longer served as Executive Vice President and President, Sales & Marketing as of November 2015 although he remains an Executive Vice President and will leave the Company at the end of 2016. When Mr. Moon separates from the Company in 2016, he will be entitled to receive severance benefits under the terms of the Companys plans and arrangements available to senior executive officers. The pay actions described below reflect those made while Mr. Moon remained in the Executive Vice President and President, Sales & Marketing role.
ELEMENT | TARGET COMPENSATION* |
ACTUAL COMPENSATION |
FACTORS INFLUENCING AMOUNT | |||||||||||||||||||||
BASE SALARY |
$660,000 | $658,269 | In March 2015, the Committee approved a base salary increase from $650,000 to $660,000. | |||||||||||||||||||||
STIP AWARD |
$627,000 | $550,313 | Eligible Earnings | x | Target | x | BPF | X | IPF | = | STIP Award | |||||||||||||
$658,269 | 95% | 0.88 | 1.0 | $550,313 | ||||||||||||||||||||
TOTAL CASH COMPENSATION | $1,287,000 | $1,208,582 | Mr. Moon executed on key aspects of the Companys strategy to strengthen our core business and expand into adjacent markets, ending the year with record backlog. He also re-organized the North America and Latin America organizations into a streamlined Americas organization. | |||||||||||||||||||||
LTI CASH PAYMENT (2013-2015 LRIP) |
$791,000 | $593,250 | 2013 Cycle Base Salary |
x |
Target | x |
TSR Payout Factor | = |
LRIP Award | |||||||||||||||
$565,000 | 140% | 75% | $593,250 | |||||||||||||||||||||
Relative TSR rank of #8 resulted in 75% of target payout | ||||||||||||||||||||||||
LTI |
2015-2017 LRIP |
$666,666 | | Payout based on relative TSR performance through 2017 | ||||||||||||||||||||
PERFORMANCE OPTIONS |
$666,667 | $633,322 | Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold. | |||||||||||||||||||||
MSUs | $666,667 | $633,316 | ||||||||||||||||||||||
2015 TOTAL COMPENSATION |
$3,287,000 | $3,068,470 | Actual Total Compensation is listed in Summary Compensation Table |
* | Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment) |
OTHER COMPENSATION POLICIES AND PRACTICES
Stock Ownership Guidelines
To ensure strong alignment of our senior management with the interests of our stockholders, the Company maintains stock ownership guidelines for our senior executives, including each of our NEOs. Our stock ownership requirements are expressed as a multiple of base salary as shown below:
Executive Group | Multiple of Base Salary | |
Chairman and Chief Executive Officer |
6x | |
Executive Vice Presidents and Executive Committee Members |
3x | |
Senior Vice Presidents |
2x | |
Corporate Vice Presidents |
1x |
Executives subject to the guidelines must meet their ownership requirement within five years from the date they first become subject to their applicable ownership requirement. Executives who do not meet their stock ownership requirement within five years must hold 100% of net shares acquired (net of tax withholding) on the exercise of stock options and the vesting of RSUs or MSUs until compliance with the stock ownership requirement is achieved.
Shares counted toward guideline achievement include directly owned shares, unvested RSUs and target MSUs.
The Committee reviews compliance with the ownership guidelines annually. In the Committees last review, it was determined that all NEOs had met their stock ownership requirement or are within the five year grace period.
Change In Control Plan
The Company maintains the Senior Officer Change In Control Severance Plan (the CIC Severance Plan), which the Board has the ability to amend or terminate with at least one years notice to participants.
The CIC Severance Plan covers our NEOs (except for Mr. Brown, whose employment agreement contains change in control provisions) and our other senior executives. The Board considers the maintenance of an effective and stable management team essential to protecting and enhancing
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 35 |
the value of the Company for the benefit of our stockholders. To that end, we recognize that the possibility of a change in control may exist and that this possibility, and the uncertainty and questions it may raise for certain senior executives, may result in the distraction, and potential departure, of senior management employees to the detriment of the Company and our stockholders. The CIC Severance Plan helps to encourage the continued attention and dedication of our senior management to their assigned duties without the distraction that may arise from the possibility of a change in control event.
The CIC Severance Plan employs a double trigger in order for severance benefits to be paid, meaning that both a change in control event must occur and an executive must be involuntarily terminated without cause or must leave for good reason within 24 months following the change in control.
The table below highlights key provisions of the CIC Severance Plan. For a detailed description of the CIC Severance Plan, please refer to the section Change in Control Arrangements.
CIC Provision | CIC Severance Plan | |
Eligibility |
Executive and Senior Vice Presidents | |
CIC Cash Severance Multiple |
Two times base salary plus target bonus | |
Medical Benefit Continuation |
Two years | |
LRIP and Equity Treatment (Provision in Omnibus Plan) |
Equity and LRIP subject to double trigger unless awards are not assumed or replaced by acquirer. If not assumed or replaced, equity and LRIP provide for accelerated treatment with performance at target | |
Excise Tax Gross-Up |
None. Participants receive best net after-tax position of either participants paying the excise tax or a reduction in severance benefits to a level that eliminates the imposition of excise tax |
Recoupment of Incentive Compensation Awards Upon Restatement of Financial Results
If, in the opinion of the independent directors of the Board, the Companys financial results require restatement due to the misconduct by one or more of the Companys executive officers (including the NEOs), the independent directors may seek a number of remedies, all of which are subject to a number of conditions including (i) whether the executive officer engaged in the intentional misconduct, (ii) whether the bonus or incentive compensation to be recouped was calculated based upon the financial results that were restated, and (iii) whether the incentive compensation calculated under the restated financial results is less than the amount actually paid or awarded. The independent directors review whether to require one or more remedies by directing the Company to recover all or a portion of any incentive compensation received by the executive as a result of the misconduct, as well as cancel all or a portion of the outstanding equity-based awards held by the executive (commonly referred to as a claw-back policy). In addition, the independent directors may also seek to recoup any gains realized by the executive with respect to their equity-based awards, including exercised stock options and vested RSUs, regardless of when they were issued.
Impact of Favorable Accounting and Tax Treatment on Compensation Program Design
Favorable accounting and tax treatment of the various elements of our total compensation program is an important, but not the sole, consideration in its design. Section 162(m) of the Internal Revenue Code limits the deductibility of certain items of compensation paid to the CEO and certain other highly compensated executive officers (together, the covered officers) to $1,000,000 annually, unless such compensation qualifies as performance-based compensation. Our short-term and long-term incentive programs generally have been designed so that they may qualify as performance-based compensation. In particular, in order to satisfy the Section 162(m) qualification requirements, under our Omnibus Plan, each year the Committee allocates an incentive pool equal to 5% of our consolidated operating earnings to the covered officers under our STIP. Once the amount of the pool and the specific allocations are determined at the end of the year, the Committee can apply negative discretion to reduce (but not increase) the amount of any award payable from the incentive pool to the covered officers, as determined by the amount payable to each covered officer based on the STIP performance criteria and actual results. The Committee reserves the right to provide for compensation to executive officers that may not be deductible pursuant to Section 162(m).
Securities Trading Policy
Executives and certain other employees, including our NEOs, may not engage in any transaction in which they may profit from short-term speculative swings in the value of our securities. Our securities trading policy is applicable to all employees and is designed to ensure compliance with all applicable insider trading rules.
Anti-Hedging Policy
Directors, executives and certain other employees, including our NEOs, are not permitted to hold any security tied to the performance of our Common Stock other than equity delivered directly to employees under our equity incentive plans.
36 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
COMPENSATION AND LEADERSHIP COMMITTEE REPORT |
THE FOLLOWING REPORT OF THE COMPENSATION AND LEADERSHIP COMMITTEE ON EXECUTIVE COMPENSATION AND RELATED DISCLOSURE SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 (THE SECURITIES ACT) OR UNDER THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
Throughout 2015, Kenneth C. Dahlberg was the Chair of the Compensation and Leadership Committee (the Committee) and Anne R. Pramaggiore and Bradley E. Singer served as members of the Committee.
The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with Company management. Based on such review and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement on Schedule 14A and incorporated by reference into Motorola Solutions 2015 Annual Report on Form 10-K.
Respectfully submitted,
Kenneth C. Dahlberg, Chairman
Anne R. Pramaggiore
Bradley E. Singer
COMPENSATION AND LEADERSHIP COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION |
Kenneth C. Dahlberg, Director and Chair of the Committee, Anne E. Pramaggiore, Director, and Bradley E. Singer, Director, served on the Committee throughout 2015. No member of the Committee was, during the fiscal year ended December 31, 2015, an officer, former officer, or employee of the Company or any of our subsidiaries. We did not have any compensation committee interlocks in 2015.
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 37 |
NAMED EXECUTIVE OFFICER COMPENSATION |
2015 SUMMARY COMPENSATION TABLE
Name and Principal Position |
Year (b) |
Salary ($)(1) (c) |
Stock ($)(2) (e) |
Option ($)(2) (f) |
Non-Equity Plan (g) |
Change
in ($)(4) |
All Other Compensation ($)(5) (i) |
Total ($) (j) |
||||||||||||||||||||||||
Gregory Q. Brown Chairman and Chief Executive Officer |
| |||||||||||||||||||||||||||||||
2015 | 1,250,000 | 2,312,480 | 5,440,430 | 3,900,000 | 0 | 372,415 | 13,275,325 | |||||||||||||||||||||||||
2014 | 1,287,500 | 1,848,923 | 3,916,657 | 558,370 | 26,013 | 331,669 | 7,969,131 | |||||||||||||||||||||||||
2013 | 1,200,000 | 1,572,805 | 3,334,996 | 6,207,600 | 0 | 306,530 | 12,621,931 | |||||||||||||||||||||||||
Gino A. Bonanotte Executive Vice President and Chief Financial Officer |
| |||||||||||||||||||||||||||||||
2015 | 622,404 | 666,642 | 1,303,842 | 732,212 | 0 | 20,600 | 3,345,700 | |||||||||||||||||||||||||
2014 | 615,481 | 660,818 | 799,987 | 175,412 | 173,977 | 20,400 | 2,446,075 | |||||||||||||||||||||||||
2013 | 342,607 | 360,330 | 243,742 | 325,023 | 0 | 17,200 | 1,288,902 | |||||||||||||||||||||||||
Mark S. Hacker Executive Vice President, General Counsel and Chief Administrative Officer |
| |||||||||||||||||||||||||||||||
2015 | 507,488 | 593,740 | 1,237,164 | 641,876 | 0 | 14,450 | 2,994,718 | |||||||||||||||||||||||||
2014 | 488,942 | 472,031 | 499,997 | 110,012 | 36,052 | 27,432 | 1,634,466 | |||||||||||||||||||||||||
Robert C. Schassler(6) Executive Vice President, International Sales & Services and Global Managed & Support Services |
| |||||||||||||||||||||||||||||||
2015 | 510,750 | 433,299 | 1,070,501 | 676,022 | 0 | 23,025 | 2,713,597 | |||||||||||||||||||||||||
2014 | 499,712 | 542,891 | 324,989 | 131,000 | 93,806 | 22,502 | 1,614,900 | |||||||||||||||||||||||||
Eduardo F. Conrado Executive Vice President and Chief Strategy & Innovation Officer |
| |||||||||||||||||||||||||||||||
2015 | 448,750 | 333,321 | 970,510 | 541,081 | 0 | 20,300 | 2,313,962 | |||||||||||||||||||||||||
2014 | 449,615 | 314,666 | 333,332 | 101,163 | 143,257 | 27,302 | 1,369,335 | |||||||||||||||||||||||||
2013 | 424,346 | 229,697 | 487,070 | 486,175 | 0 | 25,813 | 1,653,101 | |||||||||||||||||||||||||
Mark F. Moon Former Executive Vice President and President, Sales & Marketing(7) |
| |||||||||||||||||||||||||||||||
2015 | 658,269 | 633,316 | 633,322 | 1,143,563 | 0 | 37,234 | 3,105,704 | |||||||||||||||||||||||||
2014 | 669,712 | 660,881 | 699,991 | 210,959 | 145,767 | 54,039 | 2,441,348 | |||||||||||||||||||||||||
2013 | 621,096 | 506,086 | 1,073,199 | 989,725 | 0 | 25,506 | 3,215,612 |
(1) | Salary includes amounts deferred pursuant to salary reduction arrangements under the 401(k) and Deferred Compensation Plans; 2014 reflects two additional weeks of pay due to the timing of the 2014 payroll calendar. |
(2) | The amounts in columns (e) and (f) reflect the aggregate grant date fair value of the stock and option awards granted in the respective fiscal year as computed in accordance with ASC Topic 718, excluding the effect of estimated forfeitures. Assumptions used in the calculation of these amounts are included in Note 8, Share-Based Compensation Plans and Other Incentive Plans in the Companys Form 10-K for the fiscal year ended December 31, 2015. If maximum performance is achieved for performance-based stock awards, the aggregate grant date fair value in column (e) is $4,624,960 for Mr. Brown, $1,333,285 for Mr. Bonanotte, $1,093,691 for Mr. Hacker, $866,599 for Mr. Schassler, $666,642 for Mr. Conrado and $1,266,633 for Mr. Moon. If maximum performance is achieved for performance-based option awards, the aggregate grant date fair value in column (f) is $8,909,153 for Mr. Brown, $2,303,837 for Mr. Bonanotte, $1,987,147 for Mr. Hacker, $1,720,476 for Mr. Schassler, $1,470,499 for Mr. Conrado and $1,583,304 for Mr. Moon. Mr. Schasslers unvested stock and option awards were subsequently forfeited on January 15, 2016 when he voluntarily left the Company. |
(3) | In 2015, the amounts in column (g) consist of awards earned by eligible NEOs at the time under the 2015 STIP and under the 2013-2015 LRIP. Earned payments in column (g) during fiscal year 2015 are as follows: |
Mr. Brown | Mr. Bonanotte | Mr. Hacker | Mr. Schassler | Mr. Conrado | Mr. Moon | |||||||||||||||||||
2015 STIP |
$1,650,000 | $520,330 | $424,260 | $426,987 | $325,820 | $550,313 | ||||||||||||||||||
2013-2015 LRIP |
2,250,000 | 211,883 | 217,616 | 249,035 | 215,261 | 593,250 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL |
$3,900,000 | $732,213 | $641,876 | $676,022 | $541,081 | $1,143,563 |
38 | Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement |
In 2014, the amounts in column (g) consist of awards earned by eligible NEOs at that time under the 2014 STIP. There were no payouts under the 2012-2014 LRIP. In 2013, the amounts in column (g) consist of awards earned by eligible NEOs at that time under the 2013 STIP and under the 2011-2013 LRIP. Earned payments in column (g) during fiscal year 2013 are as follows:
Mr. Brown | Mr. Bonanotte | Mr. Conrado | Mr. Moon | |||||||||||||
2013 STIP |
$1,557,600 | $139,200 | $187,800 | $327,100 | ||||||||||||
2011-2013 LRIP |
4,650,000 | 185,823 | 298,375 | 662,625 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL |
$6,207,600 | $325,023 | $486,175 | $989,725 |
(4) | The amounts in column (h) represent the aggregate change in present value of the respective officers benefits under all pension plans. If the aggregate change in value of benefits under all pension plans was negative, the value is reflected as $0. A summary of the specific values for each period are set forth below: |
NEO | Period | Change in Present Value of Pension Plan |
Above Market Deferred Compensation Earnings |
Total | ||||
Gregory Q. Brown |
Dec. 31, 2014 to Dec. 31, 2015 | ($1,384) | $0 | ($1,384) | ||||
Dec. 31, 2013 to Dec. 31, 2014 | $23,912 | $2,101 | $26,013 | |||||
Dec. 31, 2012 to Dec. 31, 2013 | ($12,282) | $0 | ($12,282) | |||||
Gino A. Bonanotte |
Dec. 31, 2014 to Dec. 31, 2015 | ($39,765) | $0 | ($39,765) | ||||
Dec. 31, 2013 to Dec. 31, 2014 | $162,929 | $11,048 | $173,977 | |||||
Dec. 31, 2012 to Dec. 31, 2013 | ($76,221) | $0 | ($76,221) | |||||
Mark S. Hacker |
Dec. 31, 2014 to Dec. 31, 2015 | ($7,067) | $0 | ($7,067) | ||||
Dec. 31, 2013 to Dec. 31, 2014 | $30,561 | $5,491 | $36,052 | |||||
Robert C. Schassler |
Dec. 31, 2014 to Dec. 31, 2015 | ($8,402) | $0 | ($8,402) | ||||
Dec. 31, 2013 to Dec. 31, 2014 | $73,700 | $20,106 | $93,806 | |||||
Eduardo F. Conrado |
Dec. 31, 2014 to Dec. 31, 2015 | ($35,808) | $0 | ($35,808) | ||||
Dec. 31, 2013 to Dec. 31, 2014 | $137,696 | $5,561 | $143,257 | |||||
Dec. 31, 2012 to Dec. 31, 2013 | ($67,132) | $0 | ($67,132) | |||||
Mark F. Moon |
Dec. 31, 2014 to Dec. 31, 2015 | ($11,488) | $0 | ($11,488) | ||||
Dec. 31, 2013 to Dec. 31, 2014 | $110,635 | $35,132 | $145,767 | |||||
Dec. 31, 2012 to Dec. 31, 2013 | ($62,906) | $0 | ($62,906) |
(5) | The amounts in column (i) for 2015 consist of perquisite costs for personal use of Company aircraft, security system monitoring, costs for financial planning, guest attendance at Company events, Company matching contributions to the 401(k) Plan and executive physicals. The incremental cost to the Company for any personal use of Company aircraft is calculated by multiplying the number of hours an NEO travels in a particular plane by the direct cost per flight hour per plane. Direct costs include fuel, maintenance, labor, parts, loading and parking fees, catering and crew. Specific perquisites applicable to each NEO are identified below by an X. Where such perquisite exceeded the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for such officer, the dollar amount is given. |
NEO | Personal Aircraft Use |
Security System Monitoring |
Financial Planning |
Guest Attendance at Company Events |
401K Plan Match |
Executive Physical |
||||||||||||||||||
Gregory Q. Brown |
$329,813 | X | X | X | ||||||||||||||||||||
Gino A. Bonanotte |
X | X | ||||||||||||||||||||||
Mark S. Hacker |
X | X | X | |||||||||||||||||||||
Robert C. Schassler |
X | X | X | |||||||||||||||||||||
Eduardo F. Conrado |
X | X | X | |||||||||||||||||||||
Mark F. Moon |
$11,376 | X | X | X |
(6) | On December 31, 2015, Mr. Schassler resigned from his position as an officer of the Company, effective as of January 15, 2016. |
(7) | Mr. Moon no longer served as Executive Vice President and President, Sales & Marketing as of November 2015, although he remains an Executive Vice President and will leave the Company at the end of 2016. |
Motorola Solutions Notice of 2016 Annual Meeting of Stockholder and Proxy Statement | 39 |
GRANTS OF PLAN-BASED AWARDS IN 2015
Estimated Future Payouts Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other Stock Awards: Number of Shares of Stock Units (#)(1) (i) |
All Other Option Awards: Number of Securities Underlying Options (#)(2) (j) |
Exercise or Base Price of Option Awards ($/Sh)(3) (k) |
Grant Date Fair Value and Option (l) |
|||||||||||||||||||||||||||||||||||||||||||
Name (a) | Grant Type |
Grant Date (b) |
Threshold ($) (c) |
Target ($) |
Maximum ($) (e) |
Threshold (#) (f) |
Target (#)(2) |
Maximum (#) (h) |
||||||||||||||||||||||||||||||||||||||||
Gregory Q. Brown |
STIP | 1/1/2015 | (4) | 0 | 1,875,000 | 3,675,000 | | | | | | | | |||||||||||||||||||||||||||||||||||
LRIP | 1/1/2015 | (5) | 937,500 | 3,125,000 | 7,812,500 | | | | | | | | ||||||||||||||||||||||||||||||||||||
MSUs | 3/9/2015 | | | | 22,982 | 38,303 | (6) | 76,606 | | | | 2,312,480 | ||||||||||||||||||||||||||||||||||||
POs | 3/9/2015 | | | | 39,925 | 132,749 | (7) | 331,873 | | | 66.57 | 2,312,488 | ||||||||||||||||||||||||||||||||||||
PCSOs | 8/25/2015 | | | | 157,560 | 393,479 | (9) | 787,498 | | | 68.50 | 3,127,943 | ||||||||||||||||||||||||||||||||||||
Gino A. Bonanotte |
STIP | 1/1/2015 | (4) | 0 | 591,284 | 1,158,916 | | | | | | | | |||||||||||||||||||||||||||||||||||
LRIP | 1/1/2015 | (5) | 200,000 | 666,666 | 1,666,665 | | | | | | | | ||||||||||||||||||||||||||||||||||||
MSUs | 3/9/2015 | | | | 6,625 | 11,042 | (6) | 22,084 | | | | 666,642 | ||||||||||||||||||||||||||||||||||||
POs | 3/9/2015 | | | | 11,481 | 38,270 | (7) | 95,675 | | | 66.57 | 666,663 | ||||||||||||||||||||||||||||||||||||
PCSOs | 8/25/2015 | | | | 32,083 | 80,209 | (9) | 160,417 | | | 68.50 | 637,178 | ||||||||||||||||||||||||||||||||||||
Mark S. Hacker |
STIP | 1/1/2015 | (4) | 0 | 482,114 | 944,943 | | | | | | | | |||||||||||||||||||||||||||||||||||
LRIP | 1/1/2015 | (5) | 150,000 | 500,000 | 1,250,000 | | | | | | | | ||||||||||||||||||||||||||||||||||||
RSUs | 1/23/2015 | | | | | | | 1,527 | (8) | | | 93,778 | ||||||||||||||||||||||||||||||||||||
Options | 1/23/2015 | | | | | | | | 9,363 | (8) | 65.48 | 99,997 | ||||||||||||||||||||||||||||||||||||
MSUs | 3/9/2015 | | | | 4,969 | 8,281 | (6) | 16,562 | | | | | ||||||||||||||||||||||||||||||||||||
POs | 3/9/2015 | | | | 8,611 | 28,702 | (7) | 71,755 | | | 66.57 | 499,989 | ||||||||||||||||||||||||||||||||||||
PCSOs | 8/25/2015 | | | | 32,083 | 80,209 | (9) | 160,417 | | | 68.50 | 637,178 | ||||||||||||||||||||||||||||||||||||
Robert C. Schassler |
STIP | 1/1/2015 | (4) | 0 | 485,213 | 951,017 | | | | | | | | |||||||||||||||||||||||||||||||||||
LRIP | 1/1/2015 | (5) | 130,000 | 433,334 |