Motorola Solutions, Inc. (NYSE:MSI) has announced changes to its executive compensation, including a significant increase in the target annual long-term incentive for its CEO, Gregory Q. Brown. The Board of Directors, following the Compensation and Leadership Committee's recommendation, has raised the incentive from $22.865 million to $27.365 million for the year 2025, as stated in the company's recent SEC filing.
The decision to increase Mr. Brown's incentive reflects the Board’s belief in his critical role in generating shareholder returns, making strategic investments, and executing the company's long-term strategy. The company emphasized that retaining Mr. Brown as CEO aligns with the best interests of Motorola Solutions' shareholders. His annual long-term incentive awards are entirely performance and equity-based, involving performance stock options, market stock units, and performance stock units.
Furthermore, on Monday, the Compensation and Leadership Committee approved a special retention grant for three senior executive leaders, effective mid-November 2024. Jason J. Winkler, Executive Vice President and Chief Financial Officer; John P. Molloy, Executive Vice President and Chief Operating Officer; and Mahesh Saptharishi, Executive Vice President and Chief Technology Officer, will each receive $12 million in target value of performance stock units (PSUs). The Retention Awards aim to incentivize and retain the company's top operational leadership, with a focus on long-term shareholder value.
These PSUs are subject to the same performance criteria as the regular annual awards, with a three-year performance period commencing on the grant date. However, the maximum payout for these awards is capped at 200% of the target, compared to 250% for the regular annual grants, and they do not include special vesting provisions for retirement or mid-cycle promotions.
In other recent news, Motorola Solutions has been showcasing strong financial performance with a 15% increase in its products and systems integration revenue, and a remarkable 56% surge in operating earnings. The company's earnings per share grew by 22%, generating $180 million in operating cash flow. Motorola Solutions ended the quarter with a $14 billion backlog, demonstrating its robust financial position. Full-year revenue growth is projected at around 8%, with non-GAAP EPS forecasted between $13.22 and $13.30.
In addition to its financial achievements, Motorola Solutions declared a regular quarterly dividend of 98 cents per share, emphasizing its dedication to returning value to shareholders. The company also expanded its board of directors with the appointment of Elizabeth Mann, the current executive vice president and CFO of Verisk Analytics (NASDAQ:VRSK). Mann's extensive experience in finance, strategy, data analytics, and the technology sector is expected to bring valuable insights to Motorola Solutions.
Jefferies maintained a Buy rating on Motorola Solutions and increased the price target to $510 from $460, highlighting the company's growth opportunities in Land Mobile Radio (LMR) services. The firm emphasized the high-margin potential of new offerings such as cyber protection and LMR network monitoring. Motorola Solutions has invested over $250 million in acquisitions and plans to allocate approximately $850 million to R&D in 2023.
InvestingPro Insights
Motorola Solutions' recent executive compensation changes align with its strong market performance and financial health. According to InvestingPro data, the company's stock has shown impressive returns, with a 61.65% total return over the past year and a 30.36% return in the last six months. This performance supports the Board's decision to increase CEO Gregory Q. Brown's long-term incentive, as it reflects the company's success under his leadership.
The company's financial metrics further justify the compensation adjustments. Motorola Solutions boasts a robust revenue of $10.42 billion over the last twelve months, with a 7.94% revenue growth. Its operating income margin stands at a healthy 26.22%, indicating efficient operations and strong profitability.
InvestingPro Tips highlight that Motorola Solutions has raised its dividend for 13 consecutive years, demonstrating a commitment to shareholder returns. This aligns with the Board's emphasis on generating shareholder value through executive retention and performance-based compensation.
It's worth noting that while the stock is trading near its 52-week high, it's also trading at high valuation multiples. This suggests investor confidence in the company's future prospects under its current leadership team.
For investors seeking a deeper understanding of Motorola Solutions' financial health and market position, InvestingPro offers 18 additional tips, providing a comprehensive analysis to inform investment decisions.
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