Corporate Responsibility
EMPLOYEES

Financial rewards: Performance and goals

In 2008, we paid employees more than $298 million through our incentive plan and sales incentive plans based on the company's 2007 performance. Our incentive plan aligns employee performance with annual business goals and rewards employees based on how successfully the company achieves those goals.

In 2007, these goals related to revenues, operating margin, customer satisfaction and quality. The sales incentive plan aligns sales employees with both our short- and long-term business goals and rewards sales employees for achieving or exceeding key sales goals.

Our BRAVO! award program rewards high-performing employees for specific project work. It recognizes behaviors as well as business results. Managers can nominate employees outside of their teams. BRAVO! awards provide immediate and unanticipated recognition of a job well done.

We also offer awards for technical excellence including our Intellectual Property Awards that recognize technological innovation in support of business objectives.

Equity grants and stock purchase
In 2008, to align with market trends, we switched from offering stock options to awarding restricted stock units.

In the 2008 General Equity Grant, we granted more than 18 million restricted stock units to more than 28,000 employees, or 40 percent of the workforce. Employees purchased 19 million shares of Motorola stock in 2008 through our discounted stock purchase plan, which provides employees with a 15 percent discount on stock purchases. Thirty-six percent of employees across 30 countries participated in 2008.

Retirement and savings
We help our employees save for the future through competitive retirement and saving programs. We sponsor retirement plans or retirement saving plans in the majority of the countries where we have employees. In 2008, we contributed $83 million to the U.S. 401(k) plan and $240 million to the U.S. pension plan. Employees who joined Motorola prior to 2005 are eligible for the pension plan, while employees hired in 2005 or after receive a higher company match in the 401(k) plan instead. We also provide a comprehensive financial planning program in the U.S. to help employees and their families.

Changes to compensation and benefits in 2008
In response to the challenging economic climate we have eliminated 2009 salary increases in many markets. Salary increases will continue to be offered in countries where they are legally required or a competitive necessity; however, in most cases, these increases will be below 2008 levels.

The Motorola CEOs have voluntarily reduced their base compensation by 25 percent in 2009 and will forgo 2008 cash bonuses.

We will temporarily suspend all company matching contributions to the U.S. 401(k) plan. This means that while U.S. employees may continue to contribute to the 401(k) plan, they will not receive matching contributions from the company. Motorola will provide the 2008 matching contribution as planned.

We will permanently freeze all future benefit accruals under the Motorola pension plan and the Motorola supplemental pension plan. This means that U.S. pension plan participants (e.g., employees hired on or before 31 December 2004) will keep any pension benefits earned through 28 February 2009, but will not accumulate any additional pension benefits beyond that date.

We are freezing the pension benefit in response to difficult market conditions and in line with the competitive industry environment. When market conditions improve, we intend to continue to fund the 401(k) matching contributions to meet our obligations to retirees and active employees with accrued benefits.