said Wednesday it is permanently freezing its U.S. pension plans and temporarily suspending matching contributions to employee 401(k) plans as part of its bid to cut costs.
In addition, co-CEOs Greg Brown and Sanjay Jha will see their base salaries cut by 25% in 2009. Brown will voluntarily forgo any 2008 cash bonus earned under the Motorola incentive plan, while Jha's employment contract provides for a guaranteed cash bonus for this year, Motorola said. Jha's bonus will be voluntarily reduced by an amount equal to Brown's forfeited bonus, and the remainder will be taken in the form of restricted stock units.
The pension freeze will take effect March 1. Motorola said it will preserve vested benefits that have been accrued by employees and retirees, but eliminate future accruals. The Illinois-based tech company plans to continue providing funding to meet its pension obligations to current and future retirees.
Motorola will stop the 401(k) matching payments on Jan. 1. U.S. employees can continue to pay into the plan, but the company won't make any contributions.
The company also said employees in many of the markets in which it operates won't receive raises next year. Motorola believes the moves will add to the $800 million in savings that were announced in October.
This article was written by a staff member of TheStreet.com.