Searching leading public prediction market platforms, the 10Q Detective could not find any trading exchanges willing to offer contract odds on the departure/resignation (forced or voluntary) for one Edward J. Zander, the embattled CEO of Motorola, Inc. (MOT-$17.95).
We doubt that there is any odds-maker out there who would offer less than 1:5 that Zander will last out the summer. Yesterday, the struggling cell-phone maker warned investors of a second-quarter loss and said it no longer expected its mobile phone business to be profitable this year, blaming weak sales in Asia and Europe.
Despite what Carl Icahn and long-suffering shareholders might wish to the contrary, a review of the employment agreement between Motorola and Zander suggests the CEO is going to depart from the Company a wealthy man.
In his contract—short of any malfeasance, dishonesty or fraud—it is near impossible to terminate Zander ‘for cause.’ How can he be fired for insufficient performance—when it is written in his agreement that in “no event will his annual target bonus be less than 135% of his annual base salary”?
To rub salt in the wound: “the Company [paid] directly to the Executive [Zander] all reasonable legal fees and expenses reasonably incurred by the Executive in connection with the negotiation and preparation of [his] Agreement, subject to a maximum of $50,000.”
Mr. Zander’s reward for driving Motorola down an embankment? The 2007 Annual Proxy filed in March reveals that Mr. Zander is entitled to severance, stock options (unvested and accelerated), Restricted Stock Units (unvested and accelerated), health and welfare benefits of $7.05 million, $11.89 million, $10.83 million, and $40,652, respectively. Add in the $178,630 (present value) of accumulated pension benefits, and Messer. Zander will walk away with about $30 million!
"Ask not what your country can do for you - ask what you can do for your country." ~ John F. Kennedy
His resignation a certainty, an indeterminate future still to be decided—who will pay for Zander’s MOTORAZR phone plan?
Editor David J. Phillips does not hold a financial interest in Motorola. The 10Q Detective has a Full Disclosure Policy.