Motorola Mobility chief's $65.7M farewell Fea

Featured: Sanjay Jha, outgoing Motorola Mobility CEO

Originally published: May 31, 2012

For almost anyone, losing a job is a severe hardship. Finding a new one is tough in this labor market, and then there's the work that goes with changing health insurance, revising your retirement plan or dealing with any stock options you may hold.

For a CEO, though, losing a job can be a sweet deal.

How so? Because in the rarefied world of these One-Percenters, job contracts typically contain provisions for massive cash payments and accelerated vesting of options and restricted stock when a CEO departs. The upshot is that CEOs regularly get huge golden parachutes when they leave their jobs for practically any reason at all.

We saw this once again on May 22 as Google ( GOOG ) completed a $12.5 billion purchase of Motorola Mobility. The move triggered a rich golden parachute for outgoing Motorola Mobility CEO Sanjay Jha worth $65.7 million, according to Paul Hodgson of GMI, an independent corporate governance research firm.

So for netting in one day what it takes 1,260 U.S. households to make in an entire year (assuming an average household income of $52,000), I'm making Jha my "One-Percenter of the Week."

This wasn't all that Jha got for being at the helm of a company that owned lots of patents that Google wanted to help protect itself against lawsuits from Apple ( AAPL ). (Apple asserts that phones using Google's Android operating system copy iPhone features, and this helps explain Google's buyout, say many analysts.)

Besides the $65.7 million Jha netted as the Google buyout triggered $13.2 million in cash payments and accelerated vesting of options and stock, Jha also enjoys the following benefits for his three years and 10 months at Motorola and Motorola Mobility:

• Jha has 4.6 million vested stock options with a strike price of $35.37, handed to him when he became co-CEO of Motorola in August 2008. So the Google offer at $40 a share netted him $21.3 million here.

• He has 215,934 options priced at $24.75. This brought Jha $3.3 million in profits on the Google deal.

• Those are only two of several sets of options or restricted stock Jha is sitting on. In 2010, the year he became CEO of a spun-off Motorola Mobility, he got 647,804 stock options and 80,251 shares. And in 2011, he got an additional 318,792 restricted shares and 2,869,131 stock options, according to Hodgson.

Given that the company had already given him 4.6 million stock options, Hodgson wonders if it really needed to hand out so many more options and restricted shares to incentivize Jha to do what he had been hired to do. One might ask the same about all the perks.

Last year, Jha got $331,000 worth of personal use of company aircraft. And the cost of his personal use of a company car and driver alone, at $55,647, was more than what the typical U.S. household makes in a year. Company filings say the plane, car and driver expenses were necessary as part of a company security program, since Jha "has strong visibility in the media and other public forums."

Motorola Mobility shareholders also paid $100,031 for "temporary housing benefits" as part of a relocation. And the cost of the lawyers Jha hired to negotiate and maintain such a sweet employment deal? Not on his tab. That was picked up by shareholders, along with taxes on those fees.

In the world of One-Percenter CEOs, where pay levels are stratospheric, it may seem petty to harp on such "small" amounts. But one has to wonder why they don't just pay for this stuff themselves.

Motorola Mobility responds by pointing out that shareholders did very well in the Google takeover, which is true. The stock leapt 63% on news of the Google $40-per-share takeover offer last August. Early on in the spinoff from Motorola, Motorola Mobility stock traded in the $25-to-$30 range. In 2011, the stock gained 24.5% compared with 1.2% for the Standard & Poor's 500 Index ( $INX ) and a 15.3% loss for Motorola Mobility peers, the company says in filings.

But while shareholders gained nicely, the Google deal was particularly sweet for Jha, since it helped him rake in more than $90 million in less than four years -- some of the worst years in a long time for our economy, to boot.

Especially when you consider that much of the know-how inside Motorola Mobility that led to the Google takeover was there long before Jha ever arrived.

http://money.msn.com/investing/one-percenter-of-the-week