By Wailin Wong | Motorola Inc. has revised the terms of co-Chief Executive Sanjay Jha’s
compensation that relate to the company’s new plan to separate into two
entities.

Jha’s original employment agreement called
for the executive to receive $30 million if the separation failed to
take place before Oct. 31, 2010. If the separation was successful, Jha
was to get stock and stock options worth 3 percent of the new handset
company.

The key date for separation is now June 30, 2011. If the split does not
happen by then, Jha will receive $38 million  — higher than the
original $30 million under his first employment agreement.

When Jha joined Motorola from Qualcomm Inc. in August 2008 from
Qualcomm Inc., the company was planning to separate the phone unit from
its other two businesses. But, last week, Motorola said it had revamped its separation plan. Mobile devices will be joined by the “home” business, which makes cable TV set-top boxes, in one company headed by Jha.

The other entity, headed by co-Chief Executive Greg Brown, would consist of the wireless networks unit and the division that makes communications gear for government agencies and business clients. The separation is targeted for the first quarter of 2011.

According to a Tuesday filing with the U.S. Securities and Exchange Commission, Motorola and Jha amended his employment agreement last week. The key date for separation is now June 30, 2011. If the split does not happen by then, Jha will receive $38 million  — higher than the original $30 million under his first employment agreement.

If the separation goes through, Jha will no longer receive a fixed equity stake of 3 percent of the new company. Instead, he will receive between 1.8 percent and 3 percent of the new entity’s outstanding shares, depending on its market capitalization.

In the regulatory filing, Motorola noted that Jha will receive either the payment or the equity award; he will not receive both.