As the recession takes its toll, Motorola announced on Wednesday that it is cutting compensation and benefits packages for employees, including top executives.
Co-chief executive Greg Brown will forgo a 2008 cash bonus earned under his incentive plan, while co-chief executive Sanjay Jha will forfeit his cash bonus, at a similar level to Brown's, and take the remainder of his cash bonus in restricted stock.
Beginning in the new year, Motorola plans to suspend its matching 401k (US pension) contributions, leaving employees as the sole contributors to their 401k plans.
A number of Motorola employees will also face a salary freeze in the new year, with Brown and Jha taking a 25 percent cut to their base salary.
Beginning 1 March, Motorola will permanently freeze its US pension plan, preserving the vested benefits accrued by employees and retirees, but cancelling future benefit accruals. The company, however, will continue to fund its pension obligations to current and future retirees.
"The sustained downturn in the global economy requires that we take these difficult but necessary steps," Brown and Jha said in a statement. "While serving our customers remains a top priority, we are equally focused on our cost structure, and we will continue to implement appropriate measures to conserve cash and reduce expenses."
The compensation hit is just the latest blow to Motorola, whose troubles began before the onset of the current economic crisis. Earlier this month, for instance, Standard & Poor's dropped the phone maker's credit rating to junk status.
Motorola fell 4.31 percent to $4.22 (£2.75) a share in early morning trading on Wednesday.
