DEF 14A 1 d326195ddef14a.htm DEF 14A DEF 14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to §240.14a-12

Motorola Solutions, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

  No fee required.
  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1)  

Title of each class of securities to which transaction applies:

 

             

  (2)  

Aggregate number of securities to which transaction applies:

 

             

  (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

             

  (4)  

Proposed maximum aggregate value of transaction:

 

             

  (5)  

Total fee paid:

 

             

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)  

Amount Previously Paid:

 

             

  (2)  

Form, Schedule or Registration Statement No.:

 

             

  (3)  

Filing Party:

 

             

  (4)  

Date Filed:

 

             

 

 

 


Table of Contents

 

 
NOTICE OF
2017 ANNUAL MEETING
OF STOCKHOLDERS AND PROXY STATEMENT
 

 

 

LOGO

 

 


Table of Contents

LOGO

ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 15, 2017

March 27, 2017

Dear Fellow Motorola Solutions Stockholders:

On behalf of the Motorola Solutions Board of Directors, it is my pleasure to invite you to attend our 2017 Annual Stockholders Meeting. This year’s meeting will be held on Monday, May 15, 2017 at 5 p.m., EDT, at the Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007.

As a Motorola Solutions stockholder, your vote is important. Even if you are planning to attend the annual meeting in person, you are strongly encouraged to vote your shares through one of the methods described in the enclosed proxy statement. The Board and I would appreciate your support on our recommendations for the following proposals:

 

      Election of the nine nominated directors;

 

      Advisory approval of the Company’s executive compensation;

 

      Advisory approval of the frequency of the advisory vote approving the Company’s executive compensation; and

 

      Ratification of KPMG LLP as our appointed, independent, registered public accounting firm.

On behalf of your Board of Directors, thank you for your confidence in Motorola Solutions. I look forward to your continued support.

 

 

LOGO

Gregory Q. Brown

Chairman and CEO

Motorola Solutions, Inc.


Table of Contents

LOGO

 

PRINCIPAL EXECUTIVE OFFICES:

500 West Monroe Street

Chicago, Illinois 60661

March 27, 2017

NOTICE OF 2017 ANNUAL MEETING OF STOCKHOLDERS

Annual Meeting Date: Monday, May 15, 2017

Time: 5:00 P.M., EDT

Location: Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007

A live webcast (audio only) of the meeting will be available at www.motorolasolutions.com/investors.

The purpose of the meeting is to:

1. elect nine directors for a one-year term;
2. hold a stockholder advisory vote to approve the Company’s executive compensation;
3. hold a stockholder advisory vote to approve the frequency of the advisory vote approving the Company’s executive compensation;
4. ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2017;
5. consider and vote upon the stockholder proposals described in the enclosed proxy statement, if properly presented at the meeting; and
6. act upon such other matters as may properly come before the Annual Meeting.

By order of the Board of Directors,

 

 

LOGO

Kristin L. Kruska

Secretary

Only Motorola Solutions stockholders of record at the close of business on March 17, 2017 (the “record date”) will be entitled to vote at the meeting. The Notice, which contains instructions on how to access this Proxy Statement, the form of proxy and the Company’s 2016 Annual Report, is being mailed to stockholders on or about March 27, 2017.

 

 

LOGO

PLEASE NOTE THAT ATTENDANCE AT THE MEETING WILL BE LIMITED TO STOCKHOLDERS OF MOTOROLA SOLUTIONS AS OF THE RECORD DATE (OR THEIR AUTHORIZED REPRESENTATIVES). You will be required to provide the admission ticket that is detachable from your proxy card or provide other evidence of ownership. If your shares are held by a bank or broker, please bring your bank or broker statement evidencing your beneficial ownership of Motorola Solutions stock on the record date to gain admission to the meeting.


Table of Contents

PROXY STATEMENT SUMMARY

 

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider. You should read the entire Proxy Statement carefully before voting. For more complete information regarding the Company’s 2016 performance, please review the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

2017 ANNUAL MEETING OF STOCKHOLDERS

 

      Date and Time: May 15, 2017, 5:00 p.m. EDT

 

      Location: Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007

 

      Record Date: March 17, 2017

 

      Voting: Stockholders as of the close of business on the record date are entitled to vote. Each share of common stock is entitled to one

         vote for each director nominee and one vote for each of the other proposals to be voted on.

 

      Meeting Webcast (audio only): www.motorolasolutions.com/investors

 

      Common Stock Outstanding as of Record Date: 163,892,787

 

      Stock Symbol: MSI

 

      Registrar & Transfer Agent: Wells Fargo Shareowner Services

ITEMS TO BE VOTED ON

 

    Our Board’s Recommendation    

Election of Directors (page 4)

  FOR    

Advisory Approval of the Company’s Executive Compensation (page 19)

  FOR    

Advisory Approval of the Frequency of the Advisory Vote Approving the Company’s Executive Compensation (page 20)

  1 YEAR    

Ratification of Independent Registered Public Accounting Firm (page 54)

  FOR    

Stockholder Proposal on Lobbying Disclosure (page 58)

  AGAINST    

Stockholder Proposal on Ethical Recruitment in Global Supply Chains (page 60)

  AGAINST    

 

DIRECTOR NOMINEES

 

                       

Board Committees

(as of March 9, 2017)

 
Name  

  Director  

  Since  

  Indep.    

Other

  Public Co.  

Boards

  Position   Audit     Comp.     Gov. &
Nom.
    Exec.  

Gregory Q. Brown

  2007           1  

Chairman and CEO,

Motorola Solutions, Inc.

                            LOGO  

Kenneth D. Denman

 

  2017     LOGO     3   Former CEO and President, Emotient, Inc.                     LOGO          

Egon P. Durban

  2015     LOGO     2   Managing Partner and Managing Director of Silver Lake             LOGO                  

Clayton M. Jones

  2015     LOGO     2   Former Chairman, CEO and President, Rockwell Collins, Inc.     LOGO                          

Judy C. Lewent

  2011     LOGO     2  

Former EVP and CFO,

Merck & Co., Inc.

    LOGO                       LOGO  

Gregory K. Mondre

  2015     LOGO     2   Managing Partner and Managing Director of Silver Lake                     LOGO          

Anne R. Pramaggiore

  2013     LOGO     1  

President and CEO,

Commonwealth Edison

            LOGO       LOGO          

Samuel C. Scott

  1993     LOGO     2   Former Chairman, President and CEO, Corn Products International                     LOGO       LOGO  

Joseph M. Tucci

  Nom.     LOGO     2   Co-Chairman and Co-CEO GTY Technology Holdings, Inc.                                

 

(i)


Table of Contents

PERFORMANCE AND ACCOMPLISHMENTS

 

 

LOGO

 

     2016 HIGHLIGHTS         MOTOROLA SOLUTIONS HIGHLIGHTS SINCE 2011

     Ended the year with record backlog of $8.4B, up 29% compared to 2015

 

     Grew operating earnings 7% to $1.1B

 

     Operating cash flow increased $144M to $1.2B

 

     Repurchased $842M of shares and paid $280M in dividends

 

     MSI generated TSR of 24% vs. 12% for the S&P500

 

     Invested $1.3B in four acquisitions of software and services companies

  

     Launched as MSI Jan 4, 2011

 

     Initiated stock repurchase plan

 

     Reinstated dividend, and increased dividend double digits every year thereafter

 

     Ranked third in category in Fortune’s Most Admired Companies multiple years

 

     Named to The Global 100 Most Sustainable Companies

 

     Divested networks business for $1B

 

     Divested enterprise business for $3.45B

  

     Restructured and divested approximately half of the pension plan, decreasing the U.S. pension liabilities by $4.2B

 

     $1B investment by Silver Lake to accelerate growth in services

 

     Acquired Airwave, the world’s largest private operator of a public safety network bolstering Managed and Support Services

 

     Acquired Spillman Technologies, Public Engines, and Emergency Call Works bolstering command center offerings

PERFORMANCE HIGHLIGHTS SINCE 2011

 

 

150%

TOTAL STOCKHOLDER  

RETURN1

 

   

 

  52%

REDUCTION

IN SHARE

COUNT

 

   

 

$13.3

BILLION

IN CAPITAL RETURN

 

 

1. Based on the closing price of MSI common stock on December 31, 2010 and the closing price of MSI common stock on December 31, 2016, illustrating the growth over the initial investment.

 

(ii)


Table of Contents

EXECUTIVE COMPENSATION

2016 CEO Total Direct Compensation

2016 performance reflected our sustained efforts over the past several years to position Motorola Solutions for long-term financial success. 2016 performance was improved from 2015 with strong business performance for revenue growth along with record results for operating earnings, free cash flow and backlog. We ended the year only slightly below our operating plan and this resulted in below target funding under our Executive Officer Short Term Incentive Plan. However, the Board recognized Mr. Brown’s strong individual performance leading the company through an outstanding year of operational and financial performance and completing a number of strategic acquisitions, by providing him an above target payout.

Our three-year performance that ended December 31, 2016 continued to show increased returns to our stockholders relative to our comparator group driven primarily by strong results in both 2015 and 2016. This three-year performance resulted in an above target payout under the 2014-2016 cycle of our Long Range Incentive Plan. Even with our improved performance in 2016, Mr. Brown’s total direct compensation for 2016 was $1.1 million lower than in 2015 due to the 2015 performance contingent stock option award, which had the effect of increasing compensation last year.

 

                     

Base Salary

  $1,250,000    

Executive Officer Short Term Incentive

  $2,415,000    
   

 

   

Total Short-term Cash Compensation

  $3,665,000    

Long-term Incentive Cash Payment (2014-2016 Long Range Incentive Plan)

  $3,300,000    

Long-term Incentives (POs and MSUs grant date fair value)

  $4,874,964    
   

 

   

Total Compensation (excluding perquisites)

  $11,839,964    

GOVERNANCE HIGHLIGHTS

As part of our commitment to high ethical standards, our Board follows sound governance practices. These practices are described in more detail in the Corporate Governance section of our web site.

 

     
Independence  

      Eight out of our nine nominees are independent

      Our CEO is the only management director

      All Board committees that met during 2016 are comprised of independent directors

Independent Lead Director  

      We have a Lead Independent Director, selected by the independent directors

      The Lead Independent Director serves as liaison between management and the other non-management directors

Executive Sessions    

      The independent directors regularly meet in private without management

      The Lead Independent Director presides at these executive sessions

Accountability  

      All directors stand for election annually

      In uncontested elections, directors must be elected by a majority of votes cast

      Holders of 20% or more of our common stock have the ability to request a special meeting of stockholders

Board Oversight of

Risk Management

 

      Our Board reviews the Company’s approach to identifying and assessing risks

      The Audit Committee reviews the risk exposure of the Company, including our internal audit assessment of risk and our material risk disclosures, and meets periodically with senior management to discuss our risk assessment and risk management policies

      The Compensation and Leadership Committee reviews the annual compensation risk assessment and retains an independent compensation consultant

      The Governance and Nominating Committee reviews all related party transactions

      We have a recoupment or “clawback” policy to recover certain executive pay

      We have a policy prohibiting trading in derivative securities of the Company, and no NEOs or Directors have pledged any Company stock

Stock Ownership

Requirements

 

      Our independent directors must hold our common stock with a value equal to at least five times the annual retainer, or $500,000, within five years of joining the Board

      Directors are required to hold all shares paid or awarded by the Company until their termination of service

      Our CEO must hold our common stock with a value equal to six times his annual salary within five years of attaining the position

      Members of the management executive committee must hold our common stock with a value equal to three times their annual salary within five years of joining the group

 

(iii)


Table of Contents

TABLE OF CONTENTS

 

PROXY STATEMENT

 

ABOUT THE 2017 ANNUAL MEETING

    1  

PROPOSAL NO. 1 — ELECTION OF DIRECTORS FOR A ONE-YEAR TERM

    4  

2017 DIRECTOR NOMINEES

    4  

CORPORATE GOVERNANCE

    9  

DIRECTORS’ QUALIFICATIONS

    10  

IDENTIFYING AND EVALUATING DIRECTOR CANDIDATES

    10  

COMMITTEES OF THE BOARD

    11  

INDEPENDENT DIRECTORS

    13  

RELATED PERSON TRANSACTION POLICY AND PROCEDURES

    13  

SUCCESSION PLANNING

    13  

SECURITY OWNERSHIP INFORMATION

    14  

DIRECTOR COMPENSATION

    16  

DETERMINING DIRECTOR COMPENSATION

    16  

HOW THE DIRECTORS ARE COMPENSATED

    16  

DIRECTOR RETIREMENT PLAN AND INSURANCE COVERAGE

    18  

PROPOSAL NO.  2 — ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION

    19  
PROPOSAL NO. 3 — ADVISORY APPROVAL OF THE FREQUENCY OF ADVISORY VOTES TO APPROVE EXECUTIVE COMPENSATION     20  

COMPENSATION DISCUSSION AND ANALYSIS

    21  

NAMED EXECUTIVE OFFICERS

    21  

EXECUTIVE SUMMARY

    21  

2016 EXECUTIVE COMPENSATION PROGRAM

    26  

COMPENSATION DECISIONS FOR 2016

    32  

COMPENSATION AND LEADERSHIP COMMITTEE REPORT

    37  

COMPENSATION AND LEADERSHIP COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    37  

NAMED EXECUTIVE OFFICER COMPENSATION

    38  

2016 SUMMARY COMPENSATION TABLE

    38  

GRANTS OF PLAN-BASED AWARDS IN 2016

    40  

OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END

    41  

OPTION EXERCISES AND STOCK VESTED IN 2016

    42  

NONQUALIFIED DEFERRED COMPENSATION IN 2016

    43  

RETIREMENT PLANS

    44  

PENSION BENEFITS IN 2016

    44  

EMPLOYMENT CONTRACTS

    45  

TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS

    46  

EQUITY COMPENSATION PLAN INFORMATION

    53  
PROPOSAL NO. 4 — RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2017     54  

AUDIT COMMITTEE MATTERS

    55  

REPORT OF AUDIT COMMITTEE

    55  

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

    56  

AUDIT COMMITTEE PRE-APPROVAL POLICIES

    57  

PROPOSAL NO.  5 — STOCKHOLDER PROPOSAL RE: “LOBBYING DISCLOSURE”

    58  

PROPOSAL NO.  6 — STOCKHOLDER PROPOSAL RE: “ETHICAL RECRUITMENT IN GLOBAL SUPPLY CHAINS

    60  

IMPORTANT DATES FOR THE 2018 ANNUAL MEETING

    62  

OTHER MATTERS

    63  

 

     


Table of Contents

ABOUT THE 2017 ANNUAL MEETING

 

 

This proxy statement (the “Proxy Statement”) is being furnished to holders of common stock, $0.01 par value per share (the “Common Stock”), of Motorola Solutions, Inc. (“we,” “our,” “Motorola Solutions,” or the “Company”). Proxies are being solicited on behalf of the Board of Directors of the Company (the “Board”) to be used at the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) to be held at the Four Seasons Hotel Washington, DC, 2800 Pennsylvania Avenue NW, Washington, D.C. 20007 on Monday, May 15, 2017 at 5:00 P.M., EDT, for the purposes set forth in the Notice of 2017 Annual Meeting of Stockholders. This Proxy Statement is dated March 27, 2017 and is being distributed to stockholders on or about March 27, 2017.

All stockholders may view and print Motorola Solutions’ Proxy Statement and the 2016 Annual Report at the Company’s website at www.motorolasolutions.com/investors. The information contained on Motorola Solutions’ website is not a part of this Proxy Statement and is not deemed incorporated by reference into this Proxy Statement or any other public filing made with the Securities and Exchange Commission (the “SEC”).

Stockholders Entitled to Vote at the Annual Meeting

Only stockholders of record at the close of business on March 17, 2017 (the “record date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements thereof. On the record date, there were 163,892,787 shares outstanding of Common Stock. The Common Stock is the only class of voting securities of the Company.

A list of stockholders entitled to vote at the meeting will be available for examination at the Company’s corporate offices at 500 West Monroe Street, Chicago, Illinois 60661 for ten days before the Annual Meeting and at the Annual Meeting.

Voting Without Attending the Annual Meeting

There are three convenient methods for registered stockholders to direct their vote by proxy without attending the Annual Meeting. Stockholders can:

 

      Vote by Internet. The website address for Internet voting is provided on your Notice or proxy card. You will need to use the control number appearing on your Notice of Internet Availability of Proxy Materials (“Notice”) or proxy card to vote via the Internet. You can use the Internet to transmit your voting instructions until 11:59 P.M., EDT on Sunday, May 14, 2017. Internet voting is available 24 hours a day. If you vote via the Internet you do NOT need to vote by telephone or return a proxy card.

 

      Vote by Telephone. You can also vote by telephone by calling the toll-free telephone number provided on your proxy card. You will need to use the control number appearing on your proxy card to vote by telephone. You may transmit your voting instructions from any touch-tone telephone until 11:59 P.M., EDT on Sunday, May 14, 2017. Telephone voting is available 24 hours a day. If you vote by telephone you do NOT need to vote over the Internet or return a proxy card.

 

      Vote by Mail. If you received a printed copy of the proxy card, you can vote by marking, dating, signing, and returning it in the postage-paid envelope provided. Please promptly mail your proxy card to ensure that it is received prior to the closing of the polls at the Annual Meeting.

Your Proxy at the Annual Meeting

If you do not vote in person at the Annual Meeting, but have voted your shares by Internet, telephone, or mail, you have authorized certain members of Motorola Solutions’ senior management designated by the Board and named in your proxy to represent you and to vote your shares as instructed. All shares that have been properly voted–whether by Internet, telephone or mail–and not revoked will be voted at the Annual Meeting in accordance with your instructions. If you sign your proxy but do not give voting instructions with respect to one or more items, the shares represented by that proxy will be voted as recommended by the Board with respect to those items:

 

Proposal

  The Board Recommended Vote

Proposal 1 –

 

Election of nine Directors

  FOR

Proposal 2 –

 

Advisory Approval of the Company’s Executive Compensation

  FOR

Proposal 3 –

 

Advisory Approval of the Frequency of the Advisory Vote Approving Executive Compensation

  1 YEAR

Proposal 4 –

 

Ratification of Independent Registered Public Accounting Firm for Fiscal Year 2017

  FOR

Proposal 5 –

 

Stockholder Proposal on Lobbying Disclosure

  AGAINST

Proposal 6 –

 

Stockholder Proposal on Ethical Recruitment in Global Supply Chains

  AGAINST

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   1


Table of Contents

Holding Shares in the Name of a Bank, Broker or Other Nominee

If you are the beneficial owner of shares held in “street name” by a broker, the broker, as the record holder of the shares, is required to vote those shares in accordance with your instructions. Please check your voting instruction card or contact your bank, broker or nominee to determine whether you will be able to vote by Internet or telephone. If you do not give instructions to your broker, your broker will be entitled to vote the shares with respect to “discretionary” items, but will not be permitted to vote the shares with respect to “non-discretionary” items (resulting in a “broker non-vote”). The ratification of the appointment of KPMG LLP is the only “discretionary” item. The election of directors, the advisory approval of the Company’s executive compensation, the advisory approval of the frequency of the advisory vote approving the Company’s executive compensation and the stockholder proposals are “non-discretionary” items.

Voting At the Annual Meeting as a Beneficial Owner

If you are a beneficial owner of shares held in “street name” by a bank, broker or other nominee and want to vote your shares in person at the Annual Meeting, you will need to ask your bank, broker or other nominee to furnish you with a legal proxy. You will need to bring the legal proxy with you to the Annual Meeting and hand it in with a signed ballot that will be provided to you. You will not be able to vote your shares at the Annual Meeting without a legal proxy. If you are provided a legal proxy, any previously executed proxy will be revoked and your vote will not be counted unless you appear at the Annual Meeting and vote in person or legally appoint another proxy to vote on your behalf.

If you do not have a legal proxy, you can still attend the Annual Meeting with evidence of your stock ownership as of the record date; however, you will not be able to vote your shares at the meeting. Accordingly, we encourage you to vote or instruct your broker to vote your shares in advance, even if you plan to attend.

Changing Your Vote

Registered stockholders can revoke their proxy at any time before it is voted at the Annual Meeting by either:

 

    Submitting another timely, later-dated proxy by Internet, telephone or mail;

 

    Delivering timely written notice of revocation to: Secretary, Motorola Solutions, Inc., 500 West Monroe Street, Chicago, IL 60661; or

 

    Attending the Annual Meeting and voting in person.

Notice of Internet Availability

The SEC has adopted rules for the electronic distribution of proxy materials. We have elected to provide our stockholders access to our proxy materials and 2016 Annual Report on the Internet instead of sending a full set of printed proxy materials to all of our stockholders. This enables us to reduce costs and lessen the environmental impact of our Annual Meeting by mailing most of our stockholders a Notice. If you receive a Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request them by following the instructions for requesting such materials included in the Notice. The Notice instructs you on how to access and review all of the information contained in the 2017 Proxy Statement and 2016 Annual Report. The Notice also instructs you on how you may submit your proxy over the Internet or by telephone.

The Notice, which contains instructions on how to access this Proxy Statement, the form of proxy and the Company’s 2016 Annual Report, is being mailed to stockholders on or about March 27, 2017.

Other Matters at the Annual Meeting

If any other matters are properly presented at the Annual Meeting for consideration, and if you have voted your shares by Internet, telephone or mail, the persons named as proxies in your proxy will have the discretion to vote on those other matters for you. As of the date we filed this Proxy Statement, the Board did not know of any other matter to be raised at the Annual Meeting.

 

2   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

Votes Required to Conduct Business at the Annual Meeting or Approve Proposals

In order for business to be conducted, a quorum of a majority of the shares entitled to vote must be represented in person or by proxy at the Annual Meeting. Abstentions and broker non-votes are included in determining whether a quorum is present, but will not be included in vote totals and will not affect the outcome of the vote for the election of directors. Abstentions will have the same effect as a vote “Against” the other proposals.

 

Proposal   Affirmative Vote Required  

Broker  

Discretionary  

Voting Allowed  

Proposal 1 –

  Election of Nine Directors  

More “For” votes than “Against” votes cast at the Annual Meeting in person or by proxy (for non-contested election)

 

No

Proposal 2 –

  Advisory Approval of the Company’s Executive Compensation  

Majority of shares present and entitled to vote; abstentions will count as votes “Against”

 

No

Proposal 3 –

  Advisory Approval of the Frequency of the Advisory Vote Approving the Company’s Executive Compensation  

Plurality–frequency receiving most votes; abstentions have no effect

 

No

Proposal 4 –

  Ratification of Independent Registered Public Accounting Firm for Fiscal Year 2017  

Majority of shares present and entitled to vote; abstentions will count as votes “Against”

 

Yes

Proposal 5 –

  Stockholder Proposal on Lobbying Disclosure  

Majority of shares present and entitled to vote; abstentions will count as votes “Against”

 

No

Proposal 6 –

  Stockholder Proposal on Ethical Recruitment in Global Supply Chains  

Majority of shares present and entitled to vote; abstentions will count as votes “Against”

 

No

With respect to each proposal, other than Proposal 3, you may vote “FOR,” “AGAINST” or “ABSTAIN”. With respect to Proposal 3, you may vote for one of the “1 YEAR,” “2 YEAR” or “3 YEAR” frequencies or “ABSTAIN.” Broker non-votes will have no effect on the outcome of any of the proposals.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   3


Table of Contents

PROPOSAL NO. 1 — ELECTION OF DIRECTORS FOR A ONE-YEAR TERM

 

The number of directors of the Company to be elected at the Annual Meeting is nine. The directors elected at the Annual Meeting will serve a one-year term ending at the 2018 Annual Meeting, until their respective successors are elected and qualified or until their earlier death, resignation or removal. Each of the nominees has consented to being named in this Proxy Statement and to serve as a director if elected. However, if any nominee named below is not available to serve as a director for any reason at the time of the Annual Meeting, the proxies will be voted for the election of such other person or persons as the Board may designate, unless the Board, in its discretion, reduces the number of directors. The Board is currently comprised of ten directors, including Kenneth C. Dahlberg and General Michael V. Hayden who have reached the age of 72. Mr. Dahlberg and General Hayden will not be standing for election pursuant to the retirement age policy in the Company’s Board Governance Guidelines. Samuel C. Scott III has also reached the age of 72, however, given Mr. Scott’s extensive knowledge of the Company and position as Lead Independent Director, the Board of Directors has granted a waiver of the retirement age for Mr. Scott. Immediately following the Annual Meeting, if all nominees are elected, the Board will consist of nine directors. The Board has the authority under the Company’s Bylaws to increase or decrease the size of the Board and to fill vacancies between Annual Meetings.

2017 DIRECTOR NOMINEES

Each of the nominees named below, other than Mr. Tucci, is currently a director of the Company. Other than Mr. Denman, who was appointed by the Board of Directors by Unanimous Written Consent on February 1, 2017, each of the current directors was elected at the Annual Meeting of Stockholders held on May 16, 2016. The ages shown are current as of the date of this Proxy Statement.

 

GREGORY Q.

BROWN

  

 

Mr. Brown joined the Company in 2003, was appointed as Chief Executive Officer of Motorola, Inc. in January 2008, and since May 2011 has been the Chairman and Chief Executive Officer of Motorola Solutions, Inc.

 

Other Public Company Boards: Xerox Corporation. In the last five years Mr. Brown served on the board of Cisco Systems, Inc. from January 2013 to July 2014.

 

Board Committees: Executive (Chair)

 

Director Qualifications:

 

      Public company CEO, relevant industry and technology experience as Chairman and CEO of the Company, and former CEO of Micromuse, Inc.

 

      International and global business, developing markets, government, public policy and regulatory experience as Chairman and CEO of the Company, former chair and current board member of the Federal Reserve Bank of Chicago, former Vice Chair of the U.S. – China Business Council, former member of the President of the United States’ Management Advisory Board

 

      Government, public policy and regulatory experience as a member of Executive Committee of the Business Roundtable and Chair of its Immigration Committee

 

      Public company board experience

 

LOGO

  

Principal Occupation:

Chairman and Chief Executive Officer, Motorola Solutions, Inc.

  

Age: 56

Director since: 2007

Chairman since: 2011

  

 

4   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

KENNETH D.

DENMAN

  

 

Mr. Denman served as the CEO and President of Emotient, Inc. from 2012 to 2016. He also served as the Chief Executive Officer of Openwave Systems Inc. from 2008 to 2011, as a Director from 2004 to 2011; and as the Chief Executive Officer and President and Director of iPass, Inc. from 2001 to 2008, as its Chairman from 2003 to 2008.

 

Other Public Company Boards: Costco Wholesale Corporation, Mitek Solutions, Inc., ShoreTel, Inc.

 

Board Committees: Governance and Nominating

 

Director Qualifications:

 

      Relevant industry, technology experience as CEO and President of Emotient, Inc., Openwave Systems, Inc. and iPass, Inc.

 

      Public company CEO, international and global business experience as CEO and President of iPass, Inc. and Openwave System, Inc.

 

      Private equity and investment management experience as an Advisor to Sway Ventures

 

      Public company board experience

LOGO

  

Principal Occupation:

Retired; Formerly

Chairman, Chief Executive

Officer and President, Emotient, Inc.

  

 

Age: 58

Director since: 2017

Independent

  

 

EGON P.

DURBAN

  

 

Mr. Durban is a Managing Partner and Managing Director of Silver Lake, a global private equity firm. Mr. Durban joined Silver Lake in 1999 as a founding principal and is based in the firm’s Menlo Park office. He has previously worked in the firm’s New York office, as well as the London office, which he launched and managed from 2005 to 2010.

 

Other Public Company Boards: SecureWorks Corp, VMWare, Inc. In the last 5 years Mr. Durban served on the board of Intelsat S.A from August 2011 to December 2016 and on the board of NXP Semiconductors N.V. from September 2006 to December 2013.

 

Board Committees: Compensation and Leadership

 

Director Qualifications:

 

      Technology and international and global business experience as Managing Partner and Managing Director of Silver Lake

 

      Financial/accounting and private equity and investment banking experience as a former associate with Morgan Stanley’s Investment Banking Division

 

      Public company board experience

 

LOGO

  

Principal Occupation:

Managing Partner and Managing Director, Silver Lake

  

 

Age: 43

Director since: 2015

Independent

  

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   5


Table of Contents

CLAYTON M.

JONES

  

 

Mr. Jones served as Chairman of the Board of Rockwell Collins, Inc. from 2002 through July 2014, and Chief Executive Officer from June 2001 until his retirement in July 2013. Mr. Jones also served as President of Rockwell Collins and Corporate Officer and Senior Vice President of Rockwell International which he joined in 1979.

 

Other Public Company Boards: Cardinal Health, Inc., Deere & Company. In the last five years, Mr. Jones served on the board of Rockwell Collins from March 2001 to July 2014.

 

Board Committees: Audit

 

Director Qualifications:

 

       Public company CEO, international and global business experience as former CEO of Rockwell Collins, Inc.

 

       Relevant industry and technology experience as former CEO of Rockwell Collins, Inc., and Corporate Officer and Senior Vice President of Rockwell International

 

       Government, public policy and regulatory experience as a member of The Business Council, and former member of the President’s National Security Telecommunications Advisory Committee

 

       Public company board experience

 

LOGO

  
Principal Occupation: Retired; Formerly Chairman, Chief Executive Officer and President, Rockwell Collins, Inc. (“Rockwell Collins”)   

 

Age: 67

Director since: 2015

Independent

  

 

JUDY C.

LEWENT

  

 

Ms. Lewent served as Chief Financial Officer of Merck, a pharmaceutical company, from 1990 until her retirement in 2007.

 

Other Public Company Boards: GlaxoSmithKline plc, Thermo Fisher Scientific, Inc. Ms. Lewent served on the board of directors of Motorola, Inc. from May 1995 to May 2010.

 

Board Committees: Audit (Chair), Executive

 

Director Qualifications:

 

      Public company CFO, financial and accounting expertise, and international business experience as the former CFO of Merck

 

      Technology experience as a life member of the Massachusetts Institute of Technology

 

       Public company board experience

LOGO

  
Principal Occupation: Retired; Formerly Executive Vice President & Chief Financial Officer, Merck & Co., Inc. (“Merck”)   

 

Age: 68

Director since: 2011

Independent

  

 

6   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

GREGORY K.

MONDRE

  

 

Mr. Mondre joined Silver Lake in 1999 and is a Managing Partner and Managing Director of Silver Lake based in New York. Mr. Mondre was a principal at TPG, where he focused on private equity investments across a wide range of industries, with a particular focus on technology.

 

Other Public Company Boards: GoDaddy, Inc., Sabre Corporation

 

Board Committees: Governance and Nominating

 

Director Qualifications:

 

     Technology, international and global business, financial/accounting and private equity and investment banking experience as Managing Partner and Managing Director of Silver Lake and as former principal at TPG

 

       Public company board experience

 

LOGO

  
Principal Occupation: Managing Partner and Managing Director, Silver Lake   

 

Age: 42

Director since: 2015

Independent

  

 

ANNE R.

PRAMAGGIORE

  

 

Ms. Pramaggiore has been the President and Chief Executive Officer of ComEd, an electric utility company and a business unit of Exelon Corporation, and a member of the ComEd board of directors since February 2012. She served as ComEd’s President and Chief Operating Officer from May 2009 until February 2012.

 

Other Public Company Boards: The Babcock & Wilcox Company

 

Board Committees: Compensation and Leadership, Governance and Nominating

 

Director Qualifications:

 

     Government, public policy and regulatory and technology experience as CEO of ComEd, Executive Vice President, Customer Operations, Regulatory and External Affairs of ComEd, and as a licensed attorney

 

      International and global business experience as Chair of the Federal Reserve Bank of Chicago and board member of the Chicago Council on Global Affairs and The Chicago Urban League

 

     Public company board experience

 

LOGO

  
Principal Occupation: President and Chief Executive Officer, Commonwealth Edison Company (“ComEd”)   

 

Age: 58

Director since: 2013

Independent

  

 

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   7


Table of Contents

SAMUEL C.

SCOTT III

  

 

Mr. Scott served as Chairman, President and Chief Executive Officer of Corn Products International, a corn refining business, from February 2001 until his retirement in May 2009.

 

Other Public Company Boards: Abbott Laboratories, Bank of New York Mellon

 

Board Committees: Governance and Nominating (Chair), Executive

 

Director Qualifications:

 

      Public company CEO experience as former chairman and CEO of Corn Products International, Inc.

 

      International and global business and developing markets experience as former chairman and CEO of Corn Products International, Inc., a board member of the Chicago Council on Global Affairs, World Business Chicago, The Chicago Urban League, and Northwestern Medical Group, and as Chairman of Chicago Sister Cities International

 

      Public company board experience

 

LOGO

  

Principal Occupation:

Retired; Formerly

Chairman of the Board,

President and Chief

Executive Officer, Corn Products

International

  

Age: 72

Director since: 1993

Lead Independent Director

since 2015

Independent

 

  

 

JOSEPH M.

TUCCI

  

 

Mr. Tucci is the Co-Chief Executive Officer and Co-Chairman of GTY Technology Holdings, Inc. Formerly, Mr. Tucci was the Chairman and Chief Executive Officer of EMC Corporation. He was EMC’s Chairman from January 2006 and CEO from January 2001 until September 2016, when Dell Technologies acquired the company. At that time, he became an advisor to the acquiring company’s founder, Michael Dell, and its board of directors.

 

Other Public Company Boards: GTY Technology Holdings, Inc., Paychex, Inc.

 

Board Committees: None

 

Director Qualifications:

 

      Public company CEO, technology and global business experience as Chairman, CEO and President of EMC Corporation

 

      Relevant industry, managed and support services, developing markets and private equity experience as Co-CEO and Co-Chairman of GTY Technology Holdings, Inc. and founding member and current Chairman of the Strategic Advisory Board of Bridge Growth Partners

 

      Government, public policy and regulatory experience as a member of The Business Roundtable and Chair of its Task Force on Education and the Workforce and as a member of The Technology CEO Council.

 

      Public company board experience

LOGO

 

  
Principal Occupation: Co-Chief Executive Officer and Co-Chairman of GTY Technology Holdings, Inc.   

Age: 69

Director since: nominee

Independent

 

  

RECOMMENDATION OF THE BOARD

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NINE NOMINEES NAMED HEREIN AS DIRECTORS. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR THE ELECTION OF SUCH NINE NOMINEES AS DIRECTORS.

 

8   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

CORPORATE GOVERNANCE

 

 

The Board’s Corporate Governance Principles

The Board adheres to governance principles designed to assure the continued vitality of the Board and excellence in the execution of its duties. The Board has responsibility for management oversight and providing strategic guidance to the Company. The Board believes that it must continue to renew itself to ensure that its members bring a fresh perspective to understanding the industries and the markets in which the Company operates. The Board also believes that it must remain well-informed about the opportunities and challenges facing Motorola Solutions and its industries and markets so that the Board members can exercise their fiduciary responsibilities to Motorola Solutions stockholders.

 

GOVERNANCE HIGHLIGHTS

The Board recognizes the importance of evolving corporate governance practices and is committed to regularly reviewing specific elements of the Company’s corporate governance. Key governance practices of the Company are:

 

  LOGO Eight of nine director nominees are independent

 

  LOGO Board Committees comprised of independent directors

 

  LOGO Compensation and Leadership Committee retains independent compensation consultant

 

  LOGO Lead Independent Director

 

  LOGO Independent directors regularly meet in private without management

 

  LOGO Risk assessment process with Audit and Compensation and Leadership Committees

 

  LOGO Hold annual advisory vote on executive compensation

 

  LOGO No gross-up for excise taxes

 

  LOGO Recoupment or “clawback” policy

 

  LOGO Stock Ownership Guidelines

 

  LOGO Board and Committee self assessment process

 

  LOGO Annual election of all directors

 

  LOGO Majority vote for directors in uncontested elections

 

  LOGO Holders of 20% or more of our Common Stock have the ability to request a special meeting of stockholders

 

  LOGO Active stockholder engagement process

 

  LOGO Anti-hedging policy

 

Motorola Solutions encourages you to visit our corporate governance page on our website at
www.motorolasolutions.com/investors which provides information about our corporate
governance practices and includes the following documents:

       Board Governance Guidelines

       Director Independence Guidelines

       The Principles of Conduct for Members of the Board of Directors

       Code of Business Conduct

       Audit Committee, Compensation and Leadership Committee and Governance and Nominating Committee charters

       Restated Certificate of Incorporation, as amended

       Amended and Restated Bylaws

Amendments to the above documents, or waivers applicable to our directors, chief executive officer, chief financial officer or corporate controller from certain provisions of its ethical policies and ethical standards for directors and employees, will be posted on the Motorola Solutions website within four business days following the date of the amendment or waiver. There were no waivers in 2016.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   9


Table of Contents

DIRECTORS’ QUALIFICATIONS

The Board believes it should be comprised of individuals with appropriate skills and experiences to meet its board governance responsibilities and contribute effectively to the Company. Our Governance and Nominating Committee carefully considers the skills and experiences of current directors and new candidates to ensure that they meet the needs of the Company before nominating directors for election to the Board. All of our non-employee directors serve on Board committees, further supporting the Board by providing expertise to those committees. The needs of the committees also are reviewed when considering nominees to the Board. The Board has a deep working knowledge of matters common to large companies and is comprised of a mix of skills and qualifications which includes:

 

      Public company CEOs and CFOs

 

      Financial and accounting expertise

 

      Relevant industry experience

 

      Technology experience, including in information technology and cyber security

 

      Global business experience

 

      Developing markets experience

 

      Government, public policy and regulatory experience

 

      Managed and Support Services

 

      Private equity and investment banking experience

 

      Public company board experience

 

      Gender and ethnic diversity

 

      Independence

Specific experience, qualifications, attributes or skills of our nominees are listed in the biographies above.

IDENTIFYING AND EVALUATING DIRECTOR CANDIDATES

As stated in our Board Governance Guidelines, when selecting directors, the Board and the Governance and Nominating Committee review and consider many factors, including: experience in the context of the Board’s needs; leadership qualities; ability to exercise sound judgment; existing time commitments; years to retirement age; and independence from management. They also consider ethical standards and integrity. While the Company does not have a formal policy regarding diversity, diversity is one of several factors considered by the Board and the Governance and Nominating Committee when selecting director nominees. The Board and the Governance and Nominating Committee strive to nominate directors with a variety of complementary skills, backgrounds and perspectives so that, as a group, the Board will possess the appropriate talent, skills, experience and expertise to oversee the Company’s businesses. The Governance and Nominating Committee annually assesses the effectiveness of its director nomination process and the Board Governance Guidelines.

The Governance and Nominating Committee will consider nominees recommended by Motorola Solutions stockholders, provided that the recommendation contains sufficient information (as required by the Company’s Bylaws), including the candidate’s qualifications, to assess the suitability of the candidate, and is timely received in accordance with the Company’s Bylaws. Stockholder-recommended candidates that comply with these procedures will receive the same consideration that other candidates receive.

The Governance and Nominating Committee considers recommendations from many sources, including members of the Board, management and search firms. From time to time, Motorola Solutions hires search firms to help identify and facilitate the screening and interview process of director candidates. In 2016, we retained Russell Reynolds to assist with this process. Accordingly, they screened candidates based on the Board’s criteria, performed reference checks, prepared a biography of each candidate for the Governance and Nominating Committee’s review and helped arrange interviews. The Governance and Nominating Committee and the Chairman of the Board conduct interviews with candidates who meet the Board’s criteria. Russell Reynolds compiled a list of candidates, evaluated each candidate and made recommendations to the Governance and Nominating Committee. The Governance and Nominating Committee then interviewed the candidates, including Mr. Denman, additionally the Governance and Nominating Committee identified Mr. Tucci as a potential candidate. After being interviewed by the Governance and Nominating Committee and members of management, the Governance and Nominating Committee nominated Mr. Denman and Mr. Tucci as directors. The Governance and Nominating Committee has full discretion in considering potential candidates and making its nominations to the Board.

 

10   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

COMMITTEES OF THE BOARD

To assist it in carrying out its duties, the Board has delegated certain authority to several committees. The Board currently has the following standing committees: (1) Audit, (2) Compensation and Leadership, (3) Governance and Nominating, and (4) Executive. The charters for each of the Audit Committee, Compensation and Leadership Committee and Governance and Nominating Committee are available on our website at www.motorolasolutions.com/investors. Committee membership as of December 31, 2016, the number of meetings of each committee during 2016, and the functions of each committee are described below:

 

 

    AUDIT COMMITTEE              

 

   

       Assist the Board in fulfilling its oversight responsibilities as they relate to the Company’s accounting policies, internal controls, disclosure controls and procedures, financial reporting practices and legal and regulatory compliance.

 

       Engage the Independent registered public accounting firm.

    2016 Meetings: 8    

 

    Judy C. Lewent (Chair)

    Kenneth C. Dahlberg

    Clayton M. Jones

   

       Monitor the qualifications, independence and performance of the Company’s independent registered public accounting firm and the performance of the Company’s internal auditors.

 

       Maintain, through regularly scheduled meetings, a line of communication between the Board and the Company’s financial management, internal auditors and independent registered public accounting firm.

 

       Oversee compliance with the Company’s policies for conducting business, including ethical business standards.

 

       Review the Company’s overall financial position, asset utilization and capital structure.

 

       Review the need for equity and/or debt financing and specific outside financing proposals.

 

       Monitor the performance and investments of employee retirement and related funds.

 

       Review the Company’s dividend payment plans and practices.

 

       Prepare the report of the Audit Committee included in this Proxy Statement.

 

 

 

    COMPENSATION AND

    LEADERSHIP COMMITTEE

 

   

       Assist the Board in overseeing the management of the Company’s human resources, including:

 

       compensation and benefits programs;

 

       CEO performance and compensation;

 

       executive development and succession;

 

       diversity efforts; and

 

       evaluation of the Company’s senior management.

 

       Review and discuss the Compensation Discussion and Analysis (“CD&A”) with management and make a recommendation to the Board on the inclusion of the CD&A in this Proxy Statement.

 

       Prepare the report of the Compensation and Leadership Committee included in this Proxy Statement.

 

    2016 Meetings 6    

 

    Kenneth C. Dahlberg (Chair)

    Egon Durban

    Anne R. Pramaggiore

 

   

 

 

    GOVERNANCE AND              

    NOMINATING

    COMMITTEE*

 

   

       Identify individuals qualified to become Board members, consistent with the criteria approved by the Board.

 

       Recommend director nominees and individuals to fill vacant positions and to serve on committees.

 

       Assist the Board in interpreting the Company’s Board Governance Guidelines, the Board’s Principles of Conduct and any other similar governance documents adopted by the Board.

 

       Oversee the evaluation of the Board and its committees.

 

       Review the independence of directors and evaluate and/or approve related party transactions.

 

       Generally oversee the governance and compensation of the Board.

 

    2016 Meetings: 5    

 

    Samuel C. Scott III (Chair)

    Gen. Michael V. Hayden

    Anne R. Pramaggiore

    Gregory K. Mondre

 

   

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   11


Table of Contents

  EXECUTIVE COMMITTEE

 

 

       Act for the Board between meetings on matters already approved in principle by the Board.

 

       Exercise the authority of the Board on specific matters assigned by the Board from time to time.

 

  2016 Meetings: 0  

  Gregory Q. Brown (Chair)

  Kenneth C. Dahlberg

  Judy C. Lewent

  Samuel C. Scott III   (Lead Independent Director)

 

 

    * On February 1, 2017, Mr. Denman joined the Governance and Nominating Committee.

Attendance

The Board held five meetings during 2016. Overall attendance at Board and committee meetings was 91%. Each incumbent director attended 80% or more of the combined total meetings of the Board and the committees on which he or she served during 2016. At the Board meetings, independent directors of the Company meet regularly in executive session without management as required by the Motorola Solutions, Inc. Board Governance Guidelines and NYSE listing standards. Generally, executive sessions are held in conjunction with regularly-scheduled meetings of the Board. In 2016, the non-employee independent members of the Board met in executive session four times. In addition, Board members are expected to attend the Annual Meeting as provided in the Board Governance Guidelines. Eight of the nine directors who stood for election at the 2016 Annual Meeting attended that meeting.

Leadership Structure of the Board

At the Annual Board meeting held in May 2011, the Board combined the roles of Chairman and Chief Executive Officer and appointed Gregory Q. Brown to serve as both Chief Executive Officer and Chairman of the Board and also appointed an independent director as Lead Independent Director. The Board reappointed Mr. Brown as Chairman of the Board and an independent director as Lead Independent Director at the Annual Board meetings held in 2012 through 2016. The Board determined that Mr. Brown’s thorough knowledge of Motorola Solutions business, strategy, people, operations, competition and financial position coupled with his leadership and vision made him well positioned to chair Board meetings and bring key business and stakeholder issues to the Board’s attention. Our Lead Independent Director, currently Mr. Scott, chairs the executive sessions of the Board and acts as a liaison between our Chairman and independent directors.

Communicating with the Board

All communications to the Board of Directors, Chairman of the Board, the non-management directors or any individual director, must be in writing and addressed to them c/o Secretary, Motorola Solutions, Inc., 500 West Monroe Street, Chicago, IL 60661 or by email to boardofdirectors@MotorolaSolutions.com. Our Secretary reviews all written communications and forwards to the Board a summary and/or copies of any such correspondence that, in the opinion of the Secretary, deals with the functions of the Board or Board committees or that she otherwise determines requires the Board’s or any Board committee’s attention.

The Board’s Role in the Oversight of Risks

The Board oversees the business of the Company, including CEO and senior management performance and risk management, to assure that the long-term interests of the stockholders are being served. Each committee of the Board is also responsible for reviewing the risk exposure of the Company related to the committee’s areas of responsibility and providing input to management on such risks.

Management and our Board have a robust process embedded throughout the Company to identify, analyze, manage and report all significant risks facing the Company. Our CEO and other senior managers regularly report to the Board on significant risks facing the Company, including financial, operational and strategic risks. Each of the Board committees reviews with management significant risks related to the committee’s area of responsibility and reports to the Board on such risks, which includes the Compensation and Leadership Committee’s review of Company-wide compensation-related risks. While each committee is responsible for reviewing significant risks in the committee’s area of responsibility, the entire Board is regularly informed about such risks through committee reports. The oversight of specific risks by board committees enables the entire Board to oversee risks facing the Company more effectively and develop strategic direction taking into account the effects and magnitude of such risks. The independent Board members also discuss the Company’s significant risks when they meet in executive session without management. Our audit services department has a very important role in the risk management program. The role of this department is to provide management and the Audit Committee with an overarching and objective view of the risk management activity of the Company. This department’s engagements span financial, operational, strategic and compliance risks and the engagement results assist management in maintaining acceptable risk levels. This department identifies and conducts engagements utilizing an enterprise risk management model. The director of the department reports directly to the Audit Committee as well as the Chief Financial Officer and meets regularly with the committee and the committee chairperson, including in executive session.

 

12   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

INDEPENDENT DIRECTORS

On March 9, 2017, the Board made the determination, based on the recommendation of the Governance and Nominating Committee and in accordance with our Director Independence Guidelines, that the former non-employee director, Mr. Singer, and the current non-employee directors, Mr. Dahlberg, Mr. Denman, Mr. Durban, General Hayden, Mr. Jones, Ms. Lewent, Mr. Mondre, Ms. Pramaggiore, and Mr. Scott, were independent during the periods in 2016 and 2017 that they were members of the Board. Mr. Brown does not qualify as an independent director because he is the Chief Executive Officer of the Company. On March 9, 2017, the Board, on the recommendation of the Governance and Nominating Committee, also determined that Mr. Tucci would qualify as an independent director. See Motorola Solutions’ Relationship with Entities Associated with Independent Directors for further details.

Determining Independence

The Director Independence Guidelines include both the NYSE independence standards and additional independence standards the Board has adopted to determine if a relationship that a Board member has with the Company is material. We have adopted a stricter application of the NYSE independence standards requiring a look-back of four years when assessing independence in connection with a director’s (i) status as an employee of the Company, (ii) direct compensation in excess of $120,000, (iii) relationship with our internal or external auditor, and (iv) employment with a company that has made payments to, or received payments from, the Company for property or services.

A complete copy of the Director Independence Guidelines is available on the Company’s website at www.motorolasolutions.com/investors.

Motorola Solutions’ Relationship with Entities Associated with Independent Directors

When assessing independence, each of Mr. Denman, General Hayden, Mr. Jones, Ms. Pramaggiore, Mr. Scott, and Mr. Singer had relationships with entities that were reviewed by the Board under independence standards covering contributions or payments to charitable or similar not-for-profit organizations. In addition, each of Mr. Dahlberg, Mr. Durban, Mr. Jones, Ms. Lewent, Mr. Mondre, Ms. Pramaggiore, Mr. Scott, Mr. Tucci and Mr. Singer had relationships with entities that were reviewed by the Board under independence standards covering payments to, or received from, other entities. In each case, the payments or contributions were significantly less than the NYSE independence standards or the Director Independence Guidelines adopted by the Board, or did not constitute a disqualifying event under such standards and were determined by the Board to be immaterial.

Independent Members of the Audit, Compensation and Leadership and Governance and Nominating Committees

The Board has determined that all of the current members of the Audit Committee, the Compensation and Leadership Committee and the Governance and Nominating Committee are independent within the meaning of the Director Independence Guidelines, applicable rules of the SEC and the NYSE listing standards for independence.

RELATED PERSON TRANSACTION POLICY AND PROCEDURES

The Company has established a written related person transaction policy and procedures (the “RPT Policy”) to assist it in reviewing transactions in excess of $120,000 (“Transactions”) involving the Company and its subsidiaries and Related Persons (as defined below). The RPT Policy supplements our other conflict of interest policies set forth in the Principles of Conduct for Members of the Motorola Solutions, Inc. Board of Directors and the Code of Business Conduct for employees and our other internal procedures.

For purposes of the RPT Policy, a Related Person includes directors, director nominees and executive officers of the Company since the beginning of the Company’s last fiscal year, beneficial owners of 5% or more of any class of voting securities of the Company and members of their respective immediate family. The Governance and Nominating Committee reviews all RPT Policy matters.

The RPT Policy provides that any Transaction since the beginning of the last fiscal year is to be promptly reported to the Company’s Secretary. The Secretary will assist with gathering important information about the Transaction and present the information to the Governance and Nominating Committee. The Governance and Nominating Committee will determine whether the Transaction is a Related Person Transaction and, if so, approve, ratify or reject the Related Person Transaction. In approving, ratifying or rejecting a Related Person Transaction, the Governance and Nominating Committee will consider such information as it deems important to conclude if the transaction is fair to the Company and its subsidiaries.

Motorola Solutions had no Related Person Transactions in 2016.

SUCCESSION PLANNING

Succession planning is important at all levels of the Company. In 2016, the Board reviewed short and long-term succession plans for the CEO and other members of management’s executive committee. When assessing possible CEO candidates, the Board identified skills and behavioral characteristics they consider a requirement for the Company’s CEO. The Board evaluates these succession plans with the overall business strategy in mind. When possible, potential leaders are introduced to the Board through presentations or separate events.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   13


Table of Contents

SECURITY OWNERSHIP INFORMATION

Management and Directors

The following table sets forth information as of the close of business on March 10, 2017 regarding the beneficial ownership of shares of Common Stock by each director and nominee for director of the Company, the named executive officers (“NEOs”) in the Summary Compensation Table, and all current directors and executive officers of the Company as a group. Except for Mr. Brown, who owns 2% of the outstanding Common Stock, each other director and NEO owns less than 1% of the outstanding Common Stock based on 168,523,557 shares of Common Stock outstanding on March 10, 2017. All current directors, NEOs and executive officers as a group own 2.5% of the outstanding Common Stock.

 

Name   Shares Owned(1)     Shares Under
Exercisable
Options and
SARs(2)
    Stock Units(3)     Total Shares
Beneficially
Owned(4)(5)
 

  Gregory Q. Brown

        359,538       3,095,115       33,651       3,488,304  

  Gino A. Bonanotte

    24,721       89,957       0       114,678  

  Bruce W. Brda

    13,228       22,202       0       35,430  

  Mark S. Hacker

    11,901       103,486       0       115,387  

  John P. Molloy

    12,887       30,358       0       43,245  

  Kenneth C. Dahlberg

    10,213       0       9,217       19,430  

  Kenneth D. Denman

    0       0       438       438  

  Egon P. Durban

    0       0       5,498       5,498  

  Michael V. Hayden

    0       0       17,862       17,862  

  Clayton M. Jones

    0       0       4,435       4,435  

  Judy C. Lewent

    22,991       0       6,111       29,102  

  Gregory K. Mondre

    70       0       5,498       5,568  

  Anne R. Pramaggiore

    0       0       13,191       13,191  

  Samuel C. Scott

    5,129       0       34,250       39,379  

  Joseph M. Tucci

    0       0       0       0  

  All current directors, NEOs and executive officers as a group (15 persons)

    480,555       3,522,466       130,151       4,133,172  

 

(1) Includes shares over which the person currently holds or shares voting and/or investment power but excludes the shares listed under “Shares Under Exercisable Options and SARs” and “Stock Units.”
(2) Includes shares under options and SARs exercisable on March 10, 2017 and which may become exercisable within 60 days thereafter (assuming all performance measures are satisfied).
(3) Includes stock units which are deemed to be beneficially owned on March 10, 2017 or within 60 days thereafter (assuming all performance measures are satisfied). Stock units are not deemed beneficially owned until the restrictions on the units have lapsed. Each stock unit is intended to be the economic equivalent of one share of Common Stock.
(4) Unless otherwise indicated, each person has sole voting and investment power over the shares reported.
(5) Includes the shares listed under “Shares Under Exercisable Options” and units listed under “Stock Units.”
(6) Mr. Brown’s holdings under “Total Shares Beneficially Owned” include: 277,863 shares subject to exercisable stock settled stock appreciation rights (“SARs”). The number of shares subject to the stock settled SARs, assumes the exercise of 134,297 shares of stock settled SARs at an exercise price of $40.33 and the exercise of 471,398 stock settled SARs at an exercise price of $38.04, on March 10, 2017. The closing price of the Company stock on March 10, 2017 was $82.10. Mr. Brown has shared voting and investment power over 83,220 shares, included under “Total Shares Beneficially Owned”. He disclaims beneficial ownership over 81,000 shares held in a trust of which his wife is trustee and 2,220 shares held by his wife, except to the extent of his pecuniary interest in these shares.
(7) Mr. Scott does not have investment power over 2,133 of these shares.

No directors, nominees or current executive officers have pledged shares of Common Stock pursuant to any loan or arrangement.

 

14   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

Principal Stockholders

The following table sets forth information as of December 31, 2016 with respect to any person who is known to be the beneficial owner of more than 5% of Common Stock.

 

Name and Address   Number of Shares of
Motorola Solutions, Inc.
and Nature of
Beneficial Ownership
    Percent of
Outstanding Shares
(1)

 The Vanguard Group

 100 Vanguard Blvd.

 Malvern, PA 19355

   

15,592,309

shares of

Common Stock

(2) 

 

 

  9.4%

 BlackRock, Inc.

 55 East 52nd Street

 New York, NY 10055

   

15,203,774

shares of

Common Stock

(3) 

 

 

  9.2%

 

(1) The percentage calculations set forth above are based on 164,744,310 shares of Common Stock outstanding as of February 1, 2017 rather than the percentages set forth on various stockholders’ Schedule 13G filings.
(2) Solely based on information in a Schedule 13G/A Amendment No. 1 dated February 9, 2017 filed with the SEC by The Vanguard Group. The Schedule 13G/A indicates that as of December 31, 2016, The Vanguard Group was the beneficial owner with sole voting power as to 260,000 shares, shared voting power as to 36,930 shares, sole dispositive power as to 15,294,340 shares and shared dispositive power as to 297,969 shares.
(3) Solely based on information in a Schedule 13G/A Amendment No. 3 dated January 24, 2017 filed with the SEC by BlackRock, Inc. The Schedule 13G/A indicates that as of December 31, 2016, BlackRock, Inc., as the parent holding company, was the beneficial owner with sole voting power as to 13,520,716 shares and sole dispositive power as to 15,203,774 shares.

Section 16(a) Beneficial Ownership Reporting Compliance

Each director and certain officers of the Company are required to report to the SEC, by a specified date, his or her transactions related to our Common Stock. Based solely on a review of the copies of reports furnished to the Company or written representations that no other reports were required, the Company believes that, during the 2016 fiscal year, all reports required by Section 16(a) were timely filed by its officers and directors except as follows: In November of 2015, John P. Molloy filed a Form 3 with the SEC on a timely basis reporting, among other things, the amount of securities beneficially held. Due to an administrative error, the number of securities reported was incorrect. Upon being informed of the error, Mr. Molloy filed an amendment to the Form 3 on October 26, 2016 reporting the correct number of securities beneficially owned.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   15


Table of Contents

DIRECTOR COMPENSATION

 

DETERMINING DIRECTOR COMPENSATION

The Governance and Nominating Committee recommends to the Board the compensation for non-employee directors, which is to be consistent with market practices of other similarly situated companies and takes into consideration the impact on non-employee directors’ independence and objectivity. The Board has asked the Compensation and Leadership Committee to assist the Governance and Nominating Committee in making such recommendations. The charter of the Governance and Nominating Committee does not permit it to delegate director compensation matters to management, and management has no role in recommending the amount or form of director compensation.

HOW THE DIRECTORS ARE COMPENSATED

The non-employee directors are compensated on an annual basis as follows:

 

Cash Compensation    Annual Compensation (paid quarterly)
Annual Cash Retainer    $100,000
Lead Independent Director Fee      $25,000
Audit Committee Chairperson Fee      $20,000

Compensation and Leadership

Committee Chairperson Fee

     $15,000

Governance and Nominating

Committee Chairperson Fee

     $15,000
Audit Committee Member Fee        $5,000
Equity Compensation    Annual Compensation (paid annually)
Annual Equity Grant    $140,000

During 2016, a director could elect to receive all or a portion of his or her annual cash retainer and other cash fees in the form of (i) deferred stock units (“DSUs”) that settle when the director terminates service, (ii) DSUs that settle after one year (unless service is earlier terminated), or (iii) outright shares. Directors could also elect to receive the annual equity grant in the form of (i) DSUs that settle when the director terminates service, or (ii) DSUs that settle after one year (unless service is earlier terminated). These choices allow directors to engage in tax planning appropriate for their circumstances. Notwithstanding earlier settlement or receipt of shares, directors must hold all shares awarded or paid to them until termination of service from the Board.

On May 16, 2016, each then non-employee director received a DSU award of 1,977 shares of Common Stock. The number of DSUs awarded was determined by dividing $140,000 by the fair market value of a share of Common Stock on the date of grant (rounded up to the next whole number) based on the closing price on the date of grant. For a non-employee director who becomes a member of the Board of Directors after the annual grant of deferred stock units, the award will be prorated based on the number of full months to be served until the next annual meeting of stockholders ($11,666.67 per month) divided by the closing price of the Common Stock on the day of election to the Board.

Non-employee directors are not eligible to participate in the Motorola Solutions Management Deferred Compensation Plan. Motorola Solutions does not have a non-equity incentive plan or pension plan for non-employee directors. Non-employee directors do not receive any additional fees for attendance at meetings of the Board or its committees, or for additional work done on behalf of the Board or a committee. The Company also reimburses its directors and, in certain circumstances, spouses who accompany directors, for travel, lodging and related expenses they incur in attending Board and committee meetings or other meetings as requested by Motorola Solutions. Mr. Brown, who was an employee during 2016, received no additional compensation for serving on the Board or its committees.

 

16   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

The following table further summarizes compensation paid to the non-employee directors during 2016.

 

Name

(a)

  Fees Earned or
Paid in Cash  ($)
(1)
(b)
   

Stock
Awards ($)
(2)(3)

(c)

    All Other
Compensation ($)
(g)
    Total ($)
(h)
 

Kenneth C. Dahlberg

    120,000       140,031             260,031  

Egon P. Durban

    0       240,143             240,143  

Michael V. Hayden

    70,000       170,216             240,216  

Clayton M. Jones

    105,000       140,031             245,031  

Judy C. Lewent

    120,000       140,031             260,031  

Gregory K. Mondre

    0       240,143             240,143  

Anne R. Pramaggiore

    50,000       190,157             240,158  

Samuel C. Scott III

    140,000       140,031             280,031  

Former Director:

                               

Bradley E. Singer(4)

    52,500                   52,500  

 

(1) During 2016, directors could elect to receive all or a portion of their annual cash retainer or other cash fees in the form of (i) DSUs that settle when the director terminates service, (ii) DSUs that settle after one year (unless service is earlier terminated), or (iii) outright shares (in each case, rounded up to the next whole share). The amounts in column (b) are the portion of the annual cash retainer and any other fees the non-employee director has elected to receive in cash. Messrs. Dahlberg, Durban, Hayden, Jones, Mondre, Scott, and Ms. Pramaggiore elected to receive DSUs that settle at termination of service with respect to the amounts set forth in column (c) above.
(2) The non-employee directors received an annual grant of DSUs on May 16, 2016. With respect to the annual grant of equity, Messrs. Dahlberg, Durban, Hayden, Jones, Mondre, Scott and Ms. Pramaggiore elected to receive DSUs that settle at termination of service, and Ms. Lewent elected to receive DSUs that settle at termination or after one year, whichever is earlier, and these amounts are included in column (c). All amounts in column (c) are the aggregate grant date fair value of DSUs computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation–Stock Compensation (“ASC Topic 718”), including dividend equivalents, as applicable. The number of DSUs or shares of Common Stock received and the fair value on each date of grant are as follows:

 

     March 31     May 16     June 30     September 30     December 31  
Directors   Common
Stock/
Deferred
Stock Units
   

Annual Grant of

Deferred Stock Units

    Common
Stock/
Deferred
Stock Units
    Common
Stock/
Deferred
Stock Units
    Common
Stock/
Deferred
Stock Units
 

Kenneth C. Dahlberg

          1,977                    

Fair Value

            $140,031                          

Egon P. Durban

    331       1,977       379       328       302  

Fair Value

    $25,057       $140,031       $25,002       $25,020       $25,033  

Michael V. Hayden

    100       1,977       114       99       91  

Fair Value

    $7,570       $140,031       $7,520       $7,552       $7,543  

Clayton M. Jones

          1,977                    

Fair Value

            $140,031                          

Judy C. Lewent

          1,977                    

Fair Value

            $140,031                          

Gregory K. Mondre

    331       1,977       379       328       302  

Fair Value

    $25,057       $140,031       $25,002       $25,020       $25,033  

Anne R. Pramaggiore

    166       1,977       190       164       151  

Fair Value

    $12,566       $140,031       $12,534       $12,510       $12,516  

Samuel C. Scott III

          1,977                    

Fair Value

            $140,031                          

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   17


Table of Contents
(3) The aggregate number of Motorola Solutions DSUs and Restricted Stock includes accrued dividend equivalents or shares, as applicable.

 

Directors   Deferred Stock Units  

Restricted

Stock

Kenneth C. Dahlberg     9,165  
Egon P. Durban     5,469  
Michael V. Hayden   17,761  
Clayton M. Jones     4,410  
Judy C. Lewent     6,076  
Gregory K. Mondre     5,469  
Anne R. Pramaggiore   13,117  
Samuel C. Scott III   34,056   2,121

Former Director:

Bradley E. Singer*

    8,698  

    * The total for Mr. Singer is as of his retirement from the Board on May 16, 2016.

 

(4) Mr. Singer’s last day on the Board was May 16, 2016.

Director Stock Ownership Guidelines

Our Board stock ownership guidelines provide that non-employee directors are expected to own Common Stock with a value equivalent to at least five times the annual cash retainer fee for directors within five years after the date of joining the Board. In addition, directors are required to hold all shares paid or awarded by the Company until their termination of service, other than shares acquired through the exercise of options awarded to directors. For the purposes of these guidelines, Common Stock includes deferred stock units. As of December 31, 2016, all non-employee directors were in compliance with the stock ownership guidelines.

DIRECTOR RETIREMENT PLAN AND INSURANCE COVERAGE

In 1996, the Board terminated its director retirement plan and no current non-employee directors are entitled to receive retirement benefits. In 1998, Mr. Scott, the only current director with an interest in the plan, converted his accrued benefits in the retirement plan into shares of restricted Common Stock. He may not sell or transfer these shares and these shares are subject to repurchase by Motorola Solutions until he is no longer a member of the Board because: (1) he does not stand for re-election or is not re-elected, or (2) of his disability or death.

Non-employee directors are covered by insurance that provides accidental death and dismemberment coverage of $500,000 per person. The spouse of each such director is also covered by such insurance when traveling with the director on business trips for the Company. The Company pays the premiums for such insurance. The total premiums for coverage of all such non-employee directors and their spouses during the year ended December 31, 2016 were $2,020.

 

18   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

PROPOSAL NO. 2 — ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION

 

In accordance with Section 14A of the Exchange Act we are providing our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our NEOs as disclosed in this Proxy Statement. The Board has adopted a policy providing for annual “say-on-pay” advisory votes. Although the vote is non-binding, the Board and Compensation and Leadership Committee will review and consider the outcome of the vote when considering future executive compensation arrangements. In deciding how to vote on this proposal, the Board encourages you to read the Compensation Discussion and Analysis, below, for a detailed description of our executive compensation philosophy and programs. In particular, you should consider the following factors, which are more fully discussed in the Compensation Discussion and Analysis:

 

      We actively engage our stockholders on their views and consider this input when designing our executive compensation programs.

 

      Our programs are designed to pay for performance, so a majority of the NEOs’ total compensation is based on the performance of the Company and 100% of their long-term incentives are performance-based.

 

      Our executive compensation program incorporates many leading practices to ensure ongoing good governance, including eliminating the excise tax gross-up for our CEO in 2014.

For the reasons discussed above, the Board unanimously recommends that stockholders vote in favor of the following resolution:

“Resolved, that the stockholders approve, on an advisory basis, the compensation of the named executive officers, as described in the Compensation Discussion and Analysis, the 2016 Summary Compensation Table and other related tables and disclosures in this Proxy Statement.”

RECOMMENDATION OF THE BOARD

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR THE ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   19


Table of Contents

PROPOSAL NO. 3 — ADVISORY APPROVAL OF THE FREQUENCY OF ADVISORY VOTES TO APPROVE EXECUTIVE COMPENSATION

 

As part of the Board’s commitment to excellence in corporate governance, and as required by the Section 14A of the Exchange Act, the Board is providing the Company’s stockholders with an opportunity to provide an advisory vote to determine whether the stockholder advisory vote on executive compensation should occur every one, two or three years.

In accordance with our Board Governance Guidelines, the Board recommends that the advisory vote on executive compensation be presented to stockholders on an annual basis. This frequency is consistent with the practice we adopted in 2008 and 2011 to annually provide stockholders the opportunity to vote on our pay practices. Further, we believe an annual advisory vote on executive compensation will allow us to obtain information on stockholders’ views of the compensation of our named executive officers on a more consistent basis and will provide our Board and Compensation and Leadership Committee with frequent input from stockholders on our compensation programs. Because your vote is advisory, it will not be binding upon the Board.

RECOMMENDATION OF THE BOARD

THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF “1 YEAR” WITH RESPECT TO THE FREQUENCY OF THE ADVISORY VOTE ON THE COMPANY’S EXECUTIVE COMPENSATION. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED “1 YEAR.”

 

20   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

NAMED EXECUTIVE OFFICERS

Our Compensation Discussion and Analysis (the “CD&A”) describes Motorola Solutions’ executive compensation philosophy and programs, which are governed by the Compensation and Leadership Committee (the “Committee”). The CD&A includes 2016 total compensation for our named executive officers (“NEOs”) who are listed below.

 

  Named Executive Officer    Title

  Gregory Q. Brown

 

Chairman and Chief Executive Officer

  Gino A. Bonanotte

 

Executive Vice President and Chief Financial Officer

  Bruce W. Brda

 

Executive Vice President, Products & Services

  Mark S. Hacker

 

Executive Vice President, General Counsel and Chief Administrative Officer

  John P. Molloy

 

Executive Vice President, Worldwide Sales

EXECUTIVE SUMMARY

2016 was a strong year of improvement and execution reflected in our 6% revenue growth, along with record results for operating earnings and backlog. The revenue growth was driven primarily by Airwave, which we acquired in February, in addition to 2% organic revenue growth in the second half of the year. The improved earnings and cash flow were driven by higher revenue, lower expenses and improved operating leverage. Our record backlog position of $8.4 billion includes $1.5 billion of Products and $6.9 billion of Services backlog, with Services comprised primarily of multi-year Managed and Support Services contracts. These long-term, multi-year agreements reflect the confidence our customers have in the durability and longevity of our land mobile radio (LMR) platform for mission-critical communications. Additionally, the Company continues to innovate and invest for future growth in software and services while driving shareholder return. During the year, we invested $1.3 billion in acquiring four software and services companies, repurchased $842 million of stock and paid dividends of $280 million. Since July 2011, the Company has returned over $13 billion in capital and reduced our share count by 52%. Our three-year total shareholder return is 31.1% compared with 29.0% for the S&P 500.

Our 2016 Performance Was Slightly Below Our Operating Plan;

Our 2014-2016 Performance Delivered Strong Positive Returns To Our Stockholders

Our 2016 business performance was improved over 2015 and was only slightly below our operating plan. Our three-year performance ending in 2016 showed solid returns to our stockholders driven by an improved year in 2015 followed by strong results in 2016. As a result of our performance, and consistent with our pay for performance philosophy, our incentive plans paid out as follows:

 

      Our 2016 Executive Officer Short Term Incentive Plan (“STIP”) resulted in slightly below target funding for the business performance component (92% of target), reflecting our operating earnings and free cash flow results just below our operating plan; and

 

      Our 2014-2016 Long Range Incentive Plan (“LRIP”), which is based on Motorola Solutions’ total shareholder return (“TSR”) relative to our comparator group for the performance cycle, resulted in an above target payout (110% of target).

Even with our improved incentive payouts in 2016 versus 2015, which were 88% of target for STIP and 75% of target for LRIP, and strong individual performance for our NEOs, 2016 total compensation for NEOs was lower than in 2015 due to the 2015 performance contingent stock option award, which had the effect of increasing compensation last year.

2016 Actions

Our compensation program is critical to our ability to attract, retain and motivate key talent necessary to deliver on our purpose to help people be their best in the moments that matter. As part of our continuous review of our compensation program and consideration of ongoing feedback from investors, we believe we have a balanced program that continues to support our business growth. Therefore, no changes were made to our compensation program for our management executive committee, which includes all NEOs, in 2016.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   21


Table of Contents

2016 Compensation Program Overview

Our regular, annual compensation program included a mix of the following fixed and variable elements:

 

LOGO

 

ELEMENT DESCRIPTION RATIONALE FACTORS INFLUENCING AMOUNT BASE SALARY Fixed compensation delivered in cash Provide base amount of market competitive pay Experience, role scope. market and individual performance SHORT-TERM INCENTIVES (“STIP”) Variable compensation paid annually in cash based on performance against annually established goals and individual performance Motivate and reward executives for achievement of key financial results for the year Targets based on role scope and market; payout based on Company and individual performance LONG-TERM INCENTIVES Long Range Incentive Plan (“LRIP”) Performance Options Long-term payout in cash or shares based on achievement of total shareholder return over three years relative to the S&P 500 Aligns interests of executives with long-term stockholder value and aligns payout to performance relative to the S&P 500 Targets based on role scope and market; award based on total shareholder return relative to that of the S&P 500 Market Stock Units Shares that are earned and vest one-third per year over three years based on stock price appreciation/depreciation Aligns interests of executives with long-term stockholder value and assists in retaining talent once performance is achieved Targets based on role scope and market; award based on stock price appreciation/depreciation

 

22   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

Our Incentive Compensation Program Based On 2016 Performance Resulted In Below Target Funding;

Our Incentive Compensation Program Based On 2014-2016 TSR Resulted In Above Target Payouts

To support our pay for performance philosophy, our 2016 executive compensation program used a mix of fixed and at-risk elements to align with short- and long-term business goals through various incentives.

Our STIP is tied to achieving operating earnings and free cash flow targets to measure what enables the Company to invest in future growth and appropriately return capital to stockholders. These two measures are commonly tracked by investors and we believe that they provide useful information to investors as a measure of the strength and sustainability of our business model, while also driving long-term, sustainable stockholder value.

Our long-term incentive program provides awards that are earned and vest based on stock price appreciation or relative TSR, not only to reward long-term stock price appreciation, but also to ensure that value delivered to our stockholders through TSR exceeds that of our comparator companies.

In 2016, we delivered growth in both operating earnings and operating cash flow and fell just short of achieving our operating plan, which resulted in below target funding for the business performance component of our STIP. Our 2014-2016 TSR (stock price appreciation plus dividends) was 31.1% over the three-year period, which resulted in a #6 out of 14 rank in our comparator group. This performance equated to a payout of 110% of target under our 2014-2016 LRIP. See “Long Range Incentive Plan” for comparator group details.

 

LOGO

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   23


Table of Contents

Response to 2016 Stockholder Vote and Stockholder Engagement Process

At the 2016 Annual Meeting, our stockholders approved the advisory vote on our executive compensation with 96% support. We believe this is in large part due to program changes over the past several years that have been maintained, have created a fundamentally sound program designed to drive our growth and have aligned with stockholder interests.

 

 

LOGO

In November and December 2016, we contacted stockholders holding approximately 59% of our shares in the aggregate to seek feedback on our governance and compensation programs, some of whom noted that they had no issues with our programs and declined our request for engagement. With the stockholders who accepted our request for feedback, we discussed the 2015 investment by Silver Lake and our unchanged incentive program design, which continued to receive positive feedback. In addition, we asked for our stockholders’ input on current governance topics of interest (e.g., Board refreshment and proxy access). The investors with whom we spoke expressed no major concerns about the current executive compensation program, including pay programs, approach and overall governance.

Our stockholder engagement process is not just a one-time event; we have ongoing investor relations efforts in place including monitoring trends, engaging investors and stockholder groups on pay topics and seeking ongoing feedback on pay practices and corporate governance. We actively and periodically engage with our stockholders to request their views of our compensation programs and individual pay actions and take that information into consideration when assessing and evaluating potential changes to our executive compensation programs. In addition, we conduct outreach efforts two times a year that are focused on institutional investors with larger stockholdings, stockholder advocates and proxy advisory firms. Our November/December outreach is designed to gain feedback on the results of the previous Annual Meeting and input on our pay programs and disclosures. Our March/April outreach is designed to answer questions and provide clarifications, if necessary, leading up to the Annual Meeting and ensure stockholders are effectively informed about our programs in advance of the advisory vote on executive compensation.

 

PROGRAM CHANGE 2011 2012 2013 2014 2015 2016 100% performance-based LTI program based on relative TSR and absolute stock price All NEOs Performance-contingent vesting for equity grants All NEOs All NEOs All NEOs 100% Performance-Based LTI Change in control plan with reduced benefits and elimination of excise tax gross-up New Plan Approved (effective for new participants) Effective (for participants following required notice period) Elimination of excise tax gross-up for CEO CEO Extended stock ownership guidelines further down in organization All Corporate VPs and above Maintained Strengthened stock ownership guidelines for the Board of Directors Implemented for Directors Maintained Removed share recycling provisions from stock plan Plan Revision Approved Maintained in Plan Approved in 2015 Significantly reduced equity eligible population to better align eligibility, share usage and equity expense with market Implemented Reduced Eligibility Maintained

 

24   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

We continue to focus on sustained engagement efforts each year and remain committed to taking into account the results of future stockholder votes and ongoing dialogues with our stockholders when reviewing our compensation program and practices.

Our Executive Compensation Program Is Aligned to Our Business Strategy and Features Many Leading Practices

 

  LOGO A significant percentage of target total direct compensation, 89% for the CEO and 79% on average for the other NEOs, is “at risk” and linked to actual performance.

 

  LOGO Performance measures are linked to near-term operating objectives and delivery of long-term value to stockholders through both relative and absolute stock price performance.

 

  LOGO The long-term incentive program established in 2015 and unchanged in 2016 is 100% performance-based.

 

  LOGO The Committee retains an independent compensation consultant to review the Company’s compensation program and practices.

 

  LOGO The independent compensation consultant reviews our pay and performance relationship annually with the Committee.

 

  LOGO Our performance-based plans (STIP, LRIP, performance options and market stock units) are subject to maximum payout caps.

 

  LOGO In the event of a change in control, long-term equity incentives have a double trigger; that is, outstanding equity awards will not vest in the event of a change in control unless also accompanied by a qualifying termination of employment. Accelerated vesting at a change in control is only provided if the acquirer does not assume or replace the outstanding equity awards.

 

  LOGO The Company provides limited executive perquisites and no excise tax gross-ups.

 

  LOGO Executives are required to hold stock equal to 6x salary for the CEO and 3x salary for each of the other NEOs.

 

  LOGO Compensation is subject to claw-back in the event of certain financial restatements.

 

  LOGO Hedging of Company securities is prohibited.

 

  LOGO Our insider trading policy prohibits pledging, and no NEOs have pledged any Company equity.

 

  LOGO We conduct regular risk assessments of our compensation programs and practices.

We Continue to Innovate our Talent Programs and Link Talent and Pay Decisions

As our business continues to grow and our talent needs evolve we are enhancing our talent programs to ensure that we can meet the new challenges of attracting, developing, engaging and rewarding the top talent in our global industry. In 2016, we introduced a new framework of development for all employees and acceleration for key talent and critical roles, a new framework of leadership tools and resources and efforts to continue to increase the inclusion and diversity of our workforce. We remain committed to the development of globally diverse leaders and use a multi-faceted approach to development that includes new and expanded job assignments, formal and informal learning and coaching and engagement with management’s executive committee, our CEO and the Board. We continue to pay competitively and strive to provide differentiated rewards that recognize outstanding business performance and leadership behaviors.

Independent Experts Guide Program Development

The Committee engages an independent consultant, Compensation Advisory Partners LLC (“CAP”), to advise on the Company’s executive compensation strategy and program design and to provide regulatory and market trend updates. CAP carries out competitive reviews as directed by the Committee and provides input on specific compensation for our CEO and input on specific compensation recommendations for our other executive officers.

In 2016, the Committee continued to engage CAP as its independent compensation consultant. CAP participates in Committee meetings, including regular discussions with the Committee, without management present, to ensure impartiality on certain decisions. During 2016, the Committee also reviewed the independence of CAP using assessment criteria that aligned with the SEC and related NYSE rules adopted in 2012. The Committee concluded that CAP was independent and had no conflicts of interest.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   25


Table of Contents

2016 EXECUTIVE COMPENSATION PROGRAM

Compensation Philosophy, Practices and Program Design Inputs

Our philosophy is to provide reward programs that attract, retain and motivate the right people, in the right place, at the right time. We strive to provide a total compensation package that is competitive with the prevailing practices in the industries and countries in which we operate, allowing for above average total compensation when justified by business results and individual performance. Program design is guided by these principles:

 

  Principle   Description

  Business

  Driven

 

Incentives are aligned with the Company’s business goals and avoid excessive risk taking

 

  Performance

  Differentiated

  Programs create an effective link between pay and performance at both the Company and individual level

  Market

  Competitive

  Total compensation package is competitive to attract, retain and motivate top talent needed to successfully execute our business strategy

  Ownership

  Oriented

  Compensation is aligned with stockholder interests by delivering meaningful equity awards and maintaining robust stock ownership guidelines

  Simplicity

 

Employee engagement is driven through simple, cost-efficient plan design

 

The Committee reviews the executive compensation program design and executive pay levels annually. As part of this annual review, CAP provided executive compensation market data, information on current market practices and trends and alternatives to consider for determining compensation for our Section 16 Officers, including the NEOs. The Committee benchmarked our compensation program design, executive pay and performance against a group of comparator companies that are publicly traded and comparable to Motorola Solutions in market segment, product offerings, revenue and market value. The Committee believes Motorola Solutions competes against these companies, for executive talent and stockholder investment.

The Committee reviews the composition of the comparator group annually with the assistance of CAP. Following the sale of our Enterprise business in late 2014, our comparator group was modified in 2015 to reflect the new size and composition of our Company by removing Danaher, Eaton and NCR and adding ARRIS International, Amphenol, Juniper Networks and Roper Technologies. This same comparator group was used in 2016 to evaluate pay levels and mix and alignment of pay with our performance. This group is no longer used for relative TSR measurement comparisons in the LRIP beginning with the 2015-2017 performance cycle.

2016 Comparator Group

 

 Agilent Technologies, Inc.    Harris Corp.    Raytheon Company    Roper Technologies, Inc.
 Amphenol Corp.    Ingersoll-Rand plc    Rockwell Automation Inc.    TE Connectivity Ltd.
 ARRIS International plc    Juniper Networks, Inc.    Rockwell Collins, Inc.    Tyco International Ltd.1
 Dover Corp.    Parker-Hannifin Corp          

 

  1 Tyco International was acquired by Johnson Controls in September 2016.

To supplement our comparator group data, the Committee also considers compensation surveys that include data from companies of similar size and business segments to Motorola Solutions. For 2016, the Committee considered data from the Radford Global Technology Survey and the IPAS Global High Technology Survey.

The Committee uses the 50th percentile of our comparator group as a guideline for establishing target total compensation for our NEOs, however each NEO’s target total compensation position relative to market varies due to the Committee’s consideration of additional factors such as role, scope of accountabilities, experience, individual performance and market practices when setting total target compensation. In the first quarter of the year, the Committee evaluated each NEO’s target compensation relative to market compensation to set 2016 compensation and found as follows:

 

Position    NEO

Total compensation between the 50th percentile and 75th percentile market

   Brown and Bonanotte

Total compensation at the 50th percentile market

   Brda, Hacker and Molloy

 

26   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

A significant portion of our NEOs’ compensation is delivered through both short- and long-term incentives linked to financial and stock price performance, with a large percentage based on relative performance.

 

 

LOGO

Base Salary

Base salaries are set by the Committee with the Board’s concurrence for the CEO. When setting base salary for each NEO, the Committee considers many factors, including: the 50th percentile of the market data, external market conditions, individual performance, experience, internal comparisons and succession plans.

Short-term Incentives

The STIP is an annual cash incentive award based on Motorola Solutions’ achievement of financial performance measures and an executive’s individual performance.

Actual awards are based on the executive’s target incentive award opportunity, Motorola Solutions’ achievement of performance results (“Business Performance Factor”) and assessment of individual performance (“Individual Performance Factor”). The payout range for both the Business Performance Factor and the Individual Performance Factor is from 0% to 140%, resulting in a total plan maximum payout opportunity of 196% of target. The incentive target opportunity for each NEO was determined based on market data.

 

 

LOGO

For 2016, the Business Performance Factor was based on achievement of operating earnings (weighted 65%) and free cash flow (weighted 35%) goals. Operating earnings measures our profits from sales and free cash flow measures the cash available after capital expenditures. These are common performance measures both inside and outside of our industry and are fundamental inputs we use to measure profitability, business liquidity and rates of return for the business. We believe operating earnings and free cash flow appropriately measure our annual business performance and ultimately drive our long-term stockholder value over time.

 

ELIGIBLE EARNINGS INDIVIDUAL TARGET AWARD % TARGET INCENTIVE OPPORTUNITY BUSINESS PERFORMANCE FACTOR OPERATING EARNINGS (65%) FREE CASH FLOW (35%) Payout Range: 0 to 140% INDIVIDUAL PERFORMANCE FACTOR Payout Range: 0 to 140% PERFORMANCE SHORT TERM INCENTIVE PLAN AWARD

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   27


Table of Contents

A rigorous process is used at the start of each year to determine the range of performance for each measure and includes an analysis of factors such as: prior year financial results, market share, projected revenue growth, margins and operating expenditures and other macroeconomic and industry considerations. The operating earnings and free cash flow targets and performance ranges for the 2016 STIP were aligned with the 2016 operating plan that was approved by the Board in the first quarter of 2016. The range of performance and 2016 results are shown in the following table:

 

  Business

  Performance

  Measure

  Minimum     Target     Maximum     2016
Result
    Business
Performance
Factor
   

Measure

Weight

   

Weighted

Result

 

  Operating Earnings1 (in millions)

    $1,267       $1,490       $1,714       $1,427       0.90       65     0.58  

  Free Cash Flow2 (in millions)

    $694       $925       $1,110       $894       0.97       35     0.34  

  TOTAL

                                                    0.92  
1  Operating Earnings is our reported Non-GAAP operating earnings, which excludes highlighted items, stock-based compensation and intangible amortization.
2  Free Cash Flow is defined as net cash provided by operating activities less capital expenditures.

The Individual Performance Factor for each NEO is the Committee’s assessment if the NEO’s individual performance and accomplishments and is discussed in more detail in Compensation Decisions for 2016.

Long-term Incentives

Our regular, annual Long-term Incentives (“LTI”) are delivered through a portfolio of three vehicles, all of which are performance-based and designed to achieve a balancing of objectives within the overall program. The objective of our LTI program is to incentivize our NEOs to:

 

  Focus on financial and operational metrics that drive our growth in ways that result in long-term value creation for stockholders.

 

  Outperform the S&P 500 comparator companies.

 

  Achieve the highest, sustainable stock price over time.

The LTI program includes a long range incentive plan (“LRIP”), performance stock options (“POs”) and market stock units (“MSUs”). The LRIP and POs (two-thirds of the total LTI opportunity) are based on relative TSR and the MSUs (one-third of the total LTI opportunity) are based on absolute stock price, making the program 100% performance-based. Inclusion of the MSUs in the portfolio is also critical to provide a vehicle to assist in retaining our executives once performance is achieved. The LTI pays out one-third in cash (the LRIP) and two-thirds in equity (the POs and MSUs).

 

28   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

For both POs and MSUs, the number earned increases/decreases in relation to performance and unearned POs and MSUs are forfeited at the end of the performance period. The payout scale for the POs is detailed below. For MSUs, each 1% increase/decrease in stock price results in a 1% increase/decrease in the number of MSUs earned at the end of the performance period with a maximum payout at 100% stock price appreciation and a threshold of 40% stock price depreciation, below which no MSUs are earned. To further reinforce the performance nature of the program, the payout scale for the LRIP and POs requires performance to exceed median performance of the group before a target payout is earned. The comparator group used to measure relative performance is the S&P 500, which we believe is the broader industry group with which we compete for stockholder investment.

 

 

 

LOGO

 

PAY MIX LTI VEHICLE MIX 1/3 Cash 1/3 Performance LRIP 2/3 Equity 1/3 Performance Options 1/3 Market Stock Units 2/3 Performance-Based vs. S&P 500 1/3 Performance-Based vs. Absolute Stock Price Appreciation PAYOUT SCALE Relative TSR Payout Scale MSI 3-Year TSR Percentile Rank Payout Factor 90th - 100th Percentile 250% 80th - 89.99th Percentile 200% 70th - 79.99th Percentile 175% 60th - 69.99th Percentile 150% 55th - 59.99th Percentile 110% 50th - 54.99th Percentile 90% 45th - 49.99th Percentile 80% 35th - 44.99th Percentile 50% 30th - 34.99th Percentile 30% <30.00th Percentile 0% Year 0 Year 1 Year 2 Year 3 Grant 33% 33% 33% Amount earned is equal to the stock price appreciation/depreciation as of each vest date Threshold = 40% stock price depreciation Maximum = 100% stock price appreciation

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   29


Table of Contents

Long Range Incentive Plan

The LRIP is a performance-based, multi-year incentive plan for our senior executives, including the NEOs. We maintain overlapping three-year cycles with grants made annually, and we currently have three active cycles (2015-2017, 2016-2018 and 2017-2019). The Committee determines the total LTI value with reference to market levels through benchmarking completed by CAP. The LRIP was designed to deliver one-third of that LTI value. Each cycle prior to the 2015-2017 performance cycle uses a comparator group made up of peer companies for relative TSR measurement that is the same as the group used in our pay and performance analysis at that time. A TSR payout factor is determined by calculating the Company’s TSR rank within the comparator group based on the approved payout scale detailed below. Beginning with the 2015-2017 performance cycle, the comparator group used for relative TSR measurement is the S&P 500. A TSR payout factor is determined by calculating the Company’s TSR percentile rank within the S&P 500 based on the approved payout scale detailed below. For both methodologies, the TSR calculation uses a three-month average stock price at the beginning (three months preceding performance cycle start) and end (final three months in performance cycle, plus value of reinvested dividends) of the period for measurement purposes. This approach minimizes the impact of a single beginning and ending point stock price for each performance cycle.

 

 

LOGO

If the resulting TSR performance for Motorola Solutions is negative, but would still result in a ranking that would provide a payout, the Committee will have discretion to reduce the calculated payout by up to 25%.

Comparator companies are reviewed annually and are not changed for any established performance cycle once they are approved by the Committee.

 

INDIVIDUAL TARGET AWARD $ TARGET INCENTIVE OPPORTUNITY TSR PAYOUT FACTOR (based on scale) PERFORMANCE LRIP AWARD PAYOUT SCALE ABOVE MEDIAN PERFORMANCE MEDIAN PERFORMANCE BELOW MEDIAN PERFORMANCE COMPARATOR COMPANIES 2014 – 2016 TSR Rank Relative TSR Payout Factor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 200% 180% 160% 140% 120% 110% 100% 75% 50% 25% 0% Bottom Quartile 2015 – 2017 TSR Percentile Rank Relative TSR Payout Factor TSR Percentile Rank 2016 – 2018 Relative TSR Payout Factor 90th to 100th Percentile 250% 80th to 89.99th Percentile 200% 70th to 79.99th Percentile 175% 60th to 69.99th Percentile 150% 55th to 59.99th Percentile 110% 50th to 54.99th Percentile 90% 45th to 49.99th Percentile 80% 35th to 44.99th Percentile 50% 30th to 34.99th Percentile 30% < 30th Percentile 0% 90th to 100th Percentile 250% 80th to 89.99th Percentile 200% 70th to 79.99th Percentile 175% 60th to 69.99th Percentile 150% 55th to 59.99th Percentile 110% 50th to 54.99th Percentile 90% 45th to 49.99th Percentile 80% 35th to 44.99th Percentile 50% 30th to 34.99th Percentile 30% < 30th Percentile 0% S&P 500 S&P 500 Agilent Technologies NCR Danaher Parker-Hannifin Dover Raytheon Eaton Rockwell Automation Harris Rockwell Collins Ingersoll-Rand TE Connectivity Tyco International

 

30   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

Performance Options and Market Stock Units

In 2016, the Committee granted POs and MSUs to the NEOs under our Omnibus Plan (defined below). The POs are earned and vest based on relative TSR performance at the end of the three-year performance period based on the same payout scale described above for the 2015-2017 and 2016-2018 LRIP. The MSUs are earned and vest based on stock price appreciation/depreciation at the first, second and third anniversaries of the date of grant with respect to one-third of the grant for each of the three time periods.

Timing and Grant Practices of Global Equity Awards

Since 2012, our share usage (equity grants as a percentage of common shares outstanding) has been significantly reduced from our prior granting practices, resulting in a decrease in our stock-based compensation expense. In 2016, the expense from previous grants made to a broader population had been fully recognized, resulting in a level of expense we anticipate will continue for future years, unless and until we further modify our equity granting practices. In 2016, we also issued more equity than in prior years due to multiple, key acquisitions. We grant equity to employees of our acquired companies as a key strategy to retain employees and their enterprise knowledge and align their interests with those of our stockholders. In addition, at the 2015 Annual Meeting, stockholders approved the Motorola Solutions 2015 Omnibus Incentive Plan, which was an amendment and restatement of the Motorola Solutions Omnibus Incentive Plan of 2006 (the “Omnibus Plan”), which reduced by approximately 7 million shares, to 12 million shares, the total number of shares reserved and approved for issuance. We plan to continue to closely manage our equity granting practices to ensure our share usage and stock-based compensation expense remain in line with competitive levels.

 

 

LOGO

In 2016, our annual equity awards were made in the first quarter of the year to allow the Company to better align the receipt of equity awards with the assessment of prior year performance, achievement of prior year business goals and the prospective incentive objectives for our NEOs. We do not structure the timing of equity awards to precede or coincide with the disclosure of material non-public information. All equity grants made to Section 16 Officers are approved by the Committee, with concurrence by the Board for grants to the CEO.

The Committee has also delegated authority to the most senior human resources executive to make off-cycle equity grants to newly hired or promoted employees, in recognition of outstanding achievement or for retention. These types of grants are made on the first trading day of each month.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   31


Table of Contents

Executive Benefits and Perquisites

To enhance our ability to attract and retain talented executives in a highly competitive talent market, we provide the benefits and perquisites detailed in the following table:

 

Benefit or Perquisite  

Named

        Executives        

  

Other Executives

and Managers

   

    All Eligible    

    Full-Time    

    Employees    

  Retirement1, Saving and Stock Purchase Plans

  LOGO      LOGO     LOGO

  Health and Welfare Benefits2

  LOGO      LOGO     LOGO

  Deferred Compensation

  LOGO      LOGO      

  Financial Planning

  LOGO      Vice Presidents      

  Executive Physicals

  LOGO      Executive & Senior VPs      

  Security System Monitoring

  CEO             

  Personal Use of Corporate Aircraft Service3

  CEO             

1 Pension provided to US-based eligible employees hired prior to Jan 1, 2005.

2 Includes medical, dental, vision, group life insurance, business travel accident insurance, short- and long-term disability and work life programs.

3 In limited circumstances, and as approved by the CEO, other employees are permitted to use our corporate aircraft service for personal purposes.

COMPENSATION DECISIONS FOR 2016

 

Gregory Q. Brown, Chairman and Chief Executive Officer

Mr. Brown’s 2016 compensation reflects a strong year of operational and financial performance. One- and three-year performance were both improved from 2015 resulting in a higher 1) STIP award based on improved company performance and an IPF of 1.4 reflecting Mr. Brown’s outstanding individual performance for the year, and 2) LRIP payout due to improved three-year TSR for the 2014-2016 LRIP cycle. Even with this strong performance, 2016 total actual compensation was lower than in 2015 due to the 2015 PCSO award, which increased last year’s compensation.

 

   
ELEMENT  

TARGET

COMPENSATION*

 

ACTUAL

COMPENSATION

  FACTORS INFLUENCING AMOUNT

BASE SALARY

  $1,250,000   $1,250,000   In March 2016, the Committee approved no change to base salary.

STIP AWARD

  $1,875,000   $2,415,000   Annual Salary   x     Target     x   BPF   x   IPF   =   STIP Award
      $1,250,000      150%     0.92     1.4     $2,415,000

TOTAL CASH

COMPENSATION

 

  $3,125,000   $3,665,000   Mr. Brown led the Company through an outstanding year of operational and financial performance and completed a number of strategic acquisitions that position the Company for future growth in its core business while also accelerating momentum in software and services. The Company ended the year with a record backlog of $8.4B, returned $1.1B in capital to stockholders and delivered total shareholder return of 24%, which was double the S&P500 average.

 

LTI CASH PAYMENT

(2014-2016 LRIP)

  $3,000,000   $3,300,000   2014 Cycle Start

Base Salary

$1,200,000

 

x

    Target  

  250%

  x   TSR Payout Factor

110%

  =   LRIP Award

$3,300,000

                 
      Relative TSR rank of #6 resulted in 110% of target payout

LTI 

  2016-2018
LRIP
  $3,125,000     Base Salary   x     Target     =   LRIP Target
        $1,250,000     250%     $3,125,000
        Payout based on relative TSR performance through 2017
  PERFORMANCE
OPTIONS
  $2,437,500   $2,437,499   Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold.
  MSUs   $2,437,500   $2,437,465  

2016 TOTAL

COMPENSATION

  $11,125,000   $11,839,964   Actual Total Compensation is listed in Summary Compensation Table
* Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment)

 

32   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

Gino A. Bonanotte, Executive Vice President and Chief Financial Officer

Mr. Bonanotte received a 4.0% base salary increase and above target payouts under both the STIP and 2014-2016 LRIP cycle. Even with this strong performance, 2016 total actual compensation was lower than in 2015 due to the 2015 PCSO award, which increased last year’s compensation.

 

   
ELEMENT  

TARGET

COMPENSATION*

 

ACTUAL

COMPENSATION

  FACTORS INFLUENCING AMOUNT

BASE SALARY

  $650,000   $645,385   In March 2016, the Committee approved a base salary increase from $625,000 to $650,000.

STIP AWARD

  $617,500   $789,693   Eligible Earnings   x     Target     x   BPF   x   IPF   =   STIP Award
      $645,385     95%     0.92     1.4     $789,693

 

TOTAL CASH

COMPENSATION

 

  $1,267,500   $1,435,078   Mr. Bonanotte successfully executed our 2016 capital allocation strategy, culminating in a record adjusted return on invested capital. He drove another year of cost reductions which led to the realization of record EBITDA, operating cash flow and free cash flow. He led the rationalization of our real estate footprint, including the move of our corporate headquarters to downtown Chicago, the move of our U.S. manufacturing facility to Elgin, Illinois and the sale of our Schaumburg, Illinois campus.

 

LTI CASH PAYMENT

(2014-2016 LRIP)

  $500,000   $550,000   Target Value   x   TSR Payout Factor   =   LRIP Award
      $500,000     110%     $550,000
      Relative TSR rank of #6 resulted in 110% of target payout.

LTI 

 

2016-2018

LRIP

  $666,666     Payout based on relative TSR performance through 2018.
  PERFORMANCE
OPTIONS
  $666,667   $666,666   Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold.
  MSUs   $666,667   $666,647  

2016 TOTAL

COMPENSATION

  $3,267,500   $3,318,391   Actual Total Compensation is listed in Summary Compensation Table

 

* Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment)

 

Bruce W. Brda, Executive Vice President, Products & Services

As a newer member of management’s executive committee, Mr. Brda received a 9.8% base salary increase in 2016 to move him closer to the competitive range for his role. Mr. Brda received above target payouts under both the STIP and 2014-2016 LRIP cycle.

 

   
ELEMENT  

TARGET

COMPENSATION*

 

ACTUAL

COMPENSATION

  FACTORS INFLUENCING AMOUNT

BASE SALARY

  $560,000   $550,769   In March 2016, the Committee approved a base salary increase from $510,000 to $560,000.

STIP AWARD

  $532,000   $673,921   Eligible Earnings   x     Target     x   BPF   x   IPF   =   STIP Award
      $550,769     95%     0.92     1.4     $673,921

 

TOTAL CASH

COMPENSATION

 

  $1,092,000   $1,224,690   Mr. Brda led supply chain optimization efforts by outsourcing Penang manufacturing and German distribution and moving other key operations to low-cost locations. Operationally, he achieved record inventory turns and successfully completed the first phase of a significant public safety LTE implementation. He also made significant progress in expanding our LTE and software portfolios while continuing to enhance our land mobile radio portfolio.

 

LTI CASH PAYMENT

(2014-2016 LRIP)

  $359,073   $394,980   Target Value   x   TSR Payout Factor   =   LRIP Award
      $359,073     110%     $394,980
      Relative TSR rank of #6 resulted in 110% of target payout.

LTI 

 

2016-2018

LRIP

  $466,666     Payout based on relative TSR performance through 2018.
  PERFORMANCE
OPTIONS
  $466,667   $466,666   Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold.
  MSUs   $466,667   $466,661  

2016 TOTAL

COMPENSATION

  $2,492,000   $2,552,997   Actual Total Compensation is listed in Summary Compensation Table

 

* Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment)

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   33


Table of Contents

Mark S. Hacker, Executive Vice President, General Counsel and Chief Administrative Officer

Mr. Hacker received a 3.9% base salary increase and above target payouts under both the STIP and 2014-2016 LRIP cycle. Even with this strong performance, 2016 total actual compensation was lower than in 2015 due to the 2015 PCSO award, which increased last year’s compensation.

 

   
ELEMENT  

TARGET

COMPENSATION*

 

ACTUAL

COMPENSATION

  FACTORS INFLUENCING AMOUNT

BASE SALARY

  $530,000   $526,337   In March 2016, the Committee approved a base salary increase from $510,000 to $530,000.

STIP AWARD

  $503,500   $644,026   Eligible Earnings   x     Target     x   BPF   x   IPF   =   STIP Award
      $526,337     95%     0.92     1.4     $644,026

 

TOTAL CASH

COMPENSATION

 

  $1,033,500   $1,170,363   Mr. Hacker led key victories and favorable settlements in long-standing litigations. He supported the completion of five acquisitions and five venture capital investments. He launched several impactful human resources initiatives including Executive Committee succession planning, an ecosystem for developing managers, and a program to identify high-potential females and provide them greater access to senior leadership and opportunities for career path acceleration.

 

LTI CASH PAYMENT

(2014-2016 LRIP)

  $500,000   $550,000   Target Value   x   TSR Payout Factor   =   LRIP Award
      $500,000     110%     $550,000
      Relative TSR rank of #6 resulted in 110% of target payout.

LTI 

 

2016-2018

LRIP

  $433,334     Payout based on relative TSR performance through 2018.
  PERFORMANCE
OPTIONS
  $433,333   $433,323   Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold.
  MSUs   $433,333   $433,317  

2016 TOTAL

COMPENSATION

  $2,333,500   $2,587,003   Actual Total Compensation is listed in Summary Compensation Table

 

* Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment)

 

John P. Molloy, Executive Vice President, Worldwide Sales

Key Talent Management Actions LOGO Promoted in November 2015 to Executive Vice President

Mr. Molloy was promoted to Executive Vice President in November 2015 when his role expanded to include accountability for worldwide sales. As a newer member of management’s executive committee, Mr. Molloy received an 8.6% base salary increase in 2016 to move him closer to the competitive range for his role. He received above target payouts under both the STIP and 2014-2016 LRIP cycle. In addition, Mr. Molloy received a $300,000 cash award to recognize his contributions since his promotion.

 

   
ELEMENT  

TARGET

COMPENSATION*

 

ACTUAL

COMPENSATION

  FACTORS INFLUENCING AMOUNT

BASE SALARY

  $505,000   $497,615   In March 2016, the Committee approved a base salary increase from $465,000 to $505,000.

RECOGNITION AWARD

    $300,000   In March 2017, the Committee approved a cash recognition award to recognize 2016 contributions and to calibrate compensation for prior incentive programs, which were prorated in November 2015 as part of the promotion.

STIP AWARD

  $479,750   $608,882   Eligible Earnings   x     Target     x   BPF   x   IPF   =   STIP Award
      $497,615     95%     0.92     1.4     $608,882

 

TOTAL CASH

COMPENSATION

 

  $984,750   $1,406,497   Mr. Molloy delivered outstanding operational results. He ended the year with record backlog of $8.4B. He achieved revenue growth in both products and services, 20% orders growth in the commercial business and 14% revenue growth in the U.S. Federal business. He also delivered significant cost reductions and made impactful leadership changes.

 

LTI CASH PAYMENT

(2014-2016 LRIP)

  $190,485   $209,534   Target Value   x   TSR Payout Factor   =   LRIP Award
      $190,485     110%     $209,534
      Relative TSR rank of #6 resulted in 110% of target payout.

LTI 

 

2016-2018

LRIP

  $466,666     Payout based on relative TSR performance through 2018.
  PERFORMANCE
OPTIONS
  $466,667   $466,666   Represents grant date fair value pursuant to ASC Topic 718; actual value realized will be based on options and MSUs earned and stock price when/if the vested options are exercised and when the vested MSUs are sold.
  MSUs   $466,667   $466,661  

2016 TOTAL

COMPENSATION

  $2,384,750   $2,549,358   Actual Total Compensation is listed in Summary Compensation Table

 

* Target Compensation = Total Cash Compensation + LTI (excluding LTI Cash Payment)

 

34   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

OTHER COMPENSATION POLICIES AND PRACTICES

Stock Ownership Guidelines

To ensure strong alignment of our senior management with the interests of our stockholders, the Company maintains stock ownership guidelines for our senior executives, including each of our NEOs. Our stock ownership requirements are expressed as a multiple of base salary as shown below:

 

Executive Group   

Multiple of

Base Salary

Chairman and Chief Executive Officer

   6x

Executive Vice Presidents and Executive Committee Members

   3x

Senior Vice Presidents

   2x

Corporate Vice Presidents

   1x

Executives subject to the guidelines must meet their ownership requirement within five years from the date they first become subject to their applicable ownership requirement. Executives who do not meet their stock ownership requirement within five years must hold 100% of net shares acquired (net of tax withholding) on the exercise of stock options and the vesting of RSUs or MSUs until compliance with the stock ownership requirement is achieved.

Shares counted toward guideline achievement include directly owned shares, unvested RSUs and target MSUs.

The Committee reviews compliance with the ownership guidelines annually. In the Committee’s last review, it was determined that all NEOs had met their stock ownership requirement or are within the five-year grace period.

Change in Control Plan

The Company maintains the Senior Officer Change in Control Severance Plan (the “CIC Severance Plan”), which the Board has the ability to amend or terminate with at least one year’s notice to participants.

The CIC Severance Plan covers our NEOs (except for Mr. Brown, whose employment agreement contains change in control provisions) and our other senior executives. The Board considers the maintenance of an effective and stable management team essential to protecting and enhancing the value of the Company for the benefit of our stockholders. To that end, we recognize that the possibility of a change in control may exist and that this possibility, and the uncertainty and questions it may raise for certain senior executives, may result in the distraction, and potential departure, of senior management employees to the detriment of the Company and our stockholders. The CIC Severance Plan helps to encourage the continued attention and dedication of our senior management to their assigned duties without the distraction that may arise from the possibility of a change in control event.

The CIC Severance Plan employs a “double trigger” in order for severance benefits to be paid, meaning that both a change in control event must occur and an executive must be involuntarily terminated without “cause” or must leave for “good reason” within 24 months following the change in control.

The table below highlights key provisions of the CIC Severance Plan. For a detailed description of the CIC Severance Plan, please refer to the section “Change in Control Arrangements.”

 

CIC Provision   CIC Severance Plan

Eligibility

  Executive and Senior Vice Presidents

CIC Cash Severance Multiple

  Two times base salary plus target bonus

Medical Benefit Continuation

  Two years

LRIP and Equity Treatment

(Provision in Omnibus Plan)

  Equity and LRIP subject to “double trigger” unless awards are not assumed or replaced by acquirer. If not assumed or replaced, equity and LRIP provide for accelerated treatment with performance at target

Excise Tax Gross-Up

  None. Participants receive “best net” after-tax position of either participant’s paying the excise tax or a reduction in severance benefits to a level that eliminates the imposition of excise tax

Recoupment of Incentive Compensation Awards Upon Restatement of Financial Results

If, in the opinion of the independent directors of the Board, the Company’s financial results require restatement due to the misconduct by one or more of the Company’s executive officers (including the NEOs), the independent directors may seek a number of remedies, all of which are subject to a number of conditions including (i) whether the executive officer engaged in the intentional misconduct, (ii) whether the bonus or incentive compensation to be recouped was calculated based upon the financial results that were restated, and (iii) whether the incentive

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   35


Table of Contents

compensation calculated under the restated financial results is less than the amount actually paid or awarded. The independent directors review whether to require one or more remedies by directing the Company to recover all or a portion of any incentive compensation received by the executive as a result of the misconduct, as well as cancel all or a portion of the outstanding equity-based awards held by the executive (commonly referred to as a claw-back policy). In addition, the independent directors may also seek to recoup any gains realized by the executive with respect to their equity-based awards, including exercised stock options and vested RSUs, regardless of when they were issued.

Impact of Favorable Accounting and Tax Treatment on Compensation Program Design

Favorable accounting and tax treatment of the various elements of our total compensation program is an important, but not the sole, consideration in its design. Section 162(m) of the Internal Revenue Code limits the deductibility of certain items of compensation paid to the CEO and certain other highly compensated executive officers (together, the “covered officers”) to $1,000,000 annually, unless such compensation qualifies as performance-based compensation. Our short-term and long-term incentive programs generally have been designed so that they may qualify as performance-based compensation. In particular, in order to design our STIP so that it may meet certain Section 162(m) qualification requirements, under our Omnibus Plan, each year the Committee allocates an incentive pool equal to 5% of our consolidated operating earnings to the covered officers under our STIP. Once the amount of the pool and the specific allocations are determined at the end of the year, the Committee can apply “negative discretion” to reduce (but not increase) the amount of any award payable from the incentive pool to the covered officers, as determined by the amount payable to each covered officer based on the STIP performance criteria and actual results. The Committee reserves the right to provide for compensation to executive officers that may not be deductible pursuant to Section 162(m).

Securities Trading Policy

Executives and certain other employees, including our NEOs, may not engage in any transaction in which they may profit from short-term speculative swings in the value of our securities. Our securities trading policy is applicable to all employees and is designed to ensure compliance with all applicable insider trading rules.

Anti-Hedging Policy

Directors, executives and certain other employees, including our NEOs, are not permitted to hold any security tied to the performance of our Common Stock other than equity delivered directly to employees under our equity incentive plans.

 

36   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents
COMPENSATION AND LEADERSHIP COMMITTEE REPORT     

 

THE FOLLOWING REPORT OF THE COMPENSATION AND LEADERSHIP COMMITTEE ON EXECUTIVE COMPENSATION AND RELATED DISCLOSURE SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING THIS PROXY STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR UNDER THE EXCHANGE ACT, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.

Throughout 2016, Kenneth C. Dahlberg was the Chair of the Compensation and Leadership Committee (the “Committee”) and Anne R. Pramaggiore served as a member of the Committee. Egon P. Durban was appointed as a member of the Committee on February 3, 2016, and Bradley E. Singer served as a member of the committee from January 1, 2016 until May 15, 2016 when he resigned as a member of the Board of Directors.

The Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with Company management. Based on such review and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement on Schedule 14A and incorporated by reference into Motorola Solutions’ 2016 Annual Report on Form 10-K.

Respectfully submitted,

Kenneth C. Dahlberg, Chairman

Egon P. Durban

Anne R. Pramaggiore

 

COMPENSATION AND LEADERSHIP COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

Kenneth C. Dahlberg, Director and Chair of the Committee and Anne R. Pramaggiore, Director served on the Committee throughout 2016. Egon P. Durban, Director was appointed to the Committee on February 3, 2016 and Bradley E Singer served as a member of the committee from January 1, 2016 until May 15, 2016. No member of the Committee was, during the fiscal year ended December 31, 2016, an officer, former officer, or employee of the Company or any of our subsidiaries. We did not have any compensation committee interlocks in 2016.

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   37


Table of Contents
NAMED EXECUTIVE OFFICER COMPENSATION

 

2016 SUMMARY COMPENSATION TABLE

 

Name and

Principal Position
            (a)

 

Year

(b)

   

Salary

($)(1)

(c)

   

Bonus

($)(2)

(d)

   

Stock
Awards

($)(3)

(e)

   

Option
Awards

($)(3)

(f)

   

Non-Equity
Incentive

Plan
Compensation
($)(4)

(g)

   

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings

($)(5)
(h)

   

All Other

Compensation

($)(6)

(i)

   

Total

($)

(j)

 

Gregory Q. Brown

Chairman and Chief Executive Officer

 

 

      2016       1,250,000       0       2,437,465       2,437,499       5,715,000       25,469       359,278       12,224,711  
      2015       1,250,000       0       2,312,480       5,440,430       3,900,000       0       372,415       13,275,325  
      2014       1,287,500       0       1,848,923       3,916,657       558,370       26,013       331,669       7,969,131  

Gino A. Bonanotte

Executive Vice President and Chief Financial Officer

 

 

      2016       645,385       0       666,647       666,666       1,339,693       93,829       24,200       3,436,420  
      2015       622,404       0       666,642       1,303,842       732,212       0       20,600       3,345,700  
      2014       615,481       0       660,818       799,987       175,412       173,977       20,400       2,446,075  

Bruce W. Brda

Executive Vice President, Products & Services

 

 

      2016       550,769       0       466,661       466,666       1,068,901       179,594       24,200       2,756,791  

Mark S. Hacker

Executive Vice President, General Counsel and Chief Administrative Officer

 

 

      2016       526,337       0       433,317       433,323       1,194,026       65,630       20,775       2,673,408  
      2015       507,488       0       593,740       1,237,164       641,876       0       14,450       2,994,718  
      2014       488,942       0       472,031       499,997       110,012       36,052       27,432       1,634,466  

John P. Molloy

Executive Vice President, Worldwide Sales

 

 

      2016       497,615       300,000       466,661       466,666       818,416       35,444       17,112       2,601,914  

 

(1) Salary includes amounts deferred pursuant to salary reduction arrangements under the 401(k) and Deferred Compensation Plans; 2014 reflects two additional weeks of pay due to the timing of the 2014 payroll calendar.
(2) Mr. Molloy’s bonus is to recognize his contributions since his promotion in November 2015 and to calibrate his compensation for prior incentive programs, which were prorated upon his promotion.
(3) The amounts in columns (e) and (f) reflect the aggregate grant date fair value of the stock and option awards granted in the respective fiscal year as computed in accordance with ASC Topic 718, excluding the effect of estimated forfeitures. Assumptions used in the calculation of these amounts are included in Note 8, “Share-Based Compensation Plans and Other Incentive Plans” in the Company’s Form 10-K for the fiscal year ended December 31, 2016. If maximum performance is achieved for performance-based stock awards, the aggregate grant date fair value in column (e) is $4,874,931 for Mr. Brown, $1,333,295 for Mr. Bonanotte, $933,322 for Mr. Brda, $866,634 for Mr. Hacker and $933,322 for Mr. Molloy. If maximum performance is achieved for performance-based option awards, the aggregate grant date fair value in column (f) is $6,093,747 for Mr. Brown, $1,666,665 for Mr. Bonanotte, $1,666,656 for Mr. Brda, $1,083,298 for Mr. Hacker and $1,666,656 for Mr. Molloy.
(4) In 2016, the amounts in column (g) consist of awards earned by eligible NEOs at the time under the 2016 STIP and under the 2014-2016 LRIP. Earned payments in column (g) during fiscal year 2016 are as follows:

 

    Mr. Brown     Mr. Bonanotte     Mr. Brda     Mr. Hacker     Mr. Molloy  

2016 STIP

    $2,415,000       $789,693       $673,921       $644,026       $608,882  

2014-2016 LRIP

    $3,300,000       $550,000       $394,980       $550,000       $209,534  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

TOTAL

    $5,715,000       $1,339,693       $1,068,901       $1,194,026       $818,416  

In 2015, the amounts in column (g) consist of awards earned by eligible NEOs at the time under the 2015 STIP and under the 2013-2015 LRIP. Earned payments in column (g) during fiscal year 2015 are as follows:

 

    Mr. Brown     Mr. Bonanotte     Mr. Hacker  

2015 STIP

    $1,650,000       $520,330       $424,260  

2013-2015 LRIP

    $2,250,000       $211,883       $217,616  
 

 

 

   

 

 

   

 

 

 

TOTAL

            $3,900,000               $732,213               $641,876  

In 2014, the amounts in column (g) consist of awards earned by eligible NEOs at that time under the 2014 STIP. There were no payouts under the 2012-2014 LRIP.

 

38   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents
(5) The amounts in column (h) represent the aggregate change in present value of the respective officer’s benefits under all pension plans. If the aggregate change in value of benefits under all pension plans was negative, the value is reflected as $0. A summary of the specific values for each period is set forth below:

 

NEO    Period  

 Change in Present Value 

of Pension Plan

  Above Market Deferred
 Compensation Earnings 
  Total

Gregory Q. Brown

   Dec. 31, 2015 to Dec. 31, 2016   $15,798   $9,671   $25,469
   Dec. 31, 2014 to Dec. 31, 2015   ($1,384)   $0   ($1,384)
     Dec. 31, 2013 to Dec. 31, 2014   $23,912   $2,101   $26,013

Gino A. Bonanotte

   Dec. 31, 2015 to Dec. 31, 2016   $66,904   $26,925   $93,829
   Dec. 31, 2014 to Dec. 31, 2015   ($39,765)   $0   ($39,765)
     Dec. 31, 2013 to Dec. 31, 2014   $162,929   $11,048   $173,977

Bruce W. Brda

   Dec. 31, 2015 to Dec. 31, 2016   $76,279   $103,315   $179,594

Mark S. Hacker

   Dec. 31, 2015 to Dec. 31, 2016   $19,229   $46,401   $65,630
   Dec. 31, 2014 to Dec. 31, 2015   ($7,067)   $0   ($7,067)
     Dec. 31, 2013 to Dec. 31, 2014   $30,561   $5,491   $36,052

John P. Molloy

   Dec. 31, 2015 to Dec. 31, 2016   $31,528   $3,916   $35,444

 

(6) The amounts in column (i) for 2016 consist of perquisite costs for personal use of corporate aircraft service, security system monitoring, costs for financial planning, guest attendance at Company events, Company matching contributions to the 401(k) Plan and executive physicals. The incremental cost to the Company for any personal use of corporate aircraft service is calculated by multiplying the number of hours an NEO travels in a particular plane by the direct cost per flight hour per plane. Direct costs include fuel, maintenance, labor, parts, loading and parking fees, catering and crew. Specific perquisites applicable to each NEO are identified below by an “X”. Where such perquisite exceeded the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for such officer, the dollar amount is given.

 

NEO  

Personal

Aircraft Use

   

Security System

Monitoring

   

Financial

Planning

   

Guest Attendance

at Company Events

   

401K Plan

Match

   

Executive

Physical

 

Gregory Q. Brown

    $329,550       X       X               X       X  

Gino A. Bonanotte

                    X               X       X  

Bruce W. Brda

                    X               X       X  

Mark S. Hacker

                    X               X       X  

John P. Molloy

                    X       X       X          

 

Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement   39


Table of Contents

GRANTS OF PLAN-BASED AWARDS IN 2016

 

      

Estimated Future Payouts

Under Non-Equity Incentive

Plan Awards

   

Estimated Future Payouts

Under Equity Incentive

Plan Awards

    All Other
Stock
Awards:
Number of
Shares of
Stock Units
(#)
(i)
    All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(j)
    Exercise
or Base
Price of
Option
Awards
($/Sh)(3)
(k)
   

Grant Date

Fair Value
of Stock

and

Option
Awards

(l)

 
Name (a)   Grant
Type
   

Grant

Date

(b)

    Threshold
($)
(c)
   

Target

($)
(d)

    Maximum
($)
(e)
    Threshold
(#)
(f)
   

Target

(#)(1)(2)
(g)

    Maximum
(#)
(h)
         

Gregory Q. Brown 

    STIP       1/1/2016 (4)      0       1,875,000       3,675,000                                            
      LRIP       1/1/2016 (5)      937,500       3,125,000       7,812,500                                            
      MSUs       3/10/2016                         19,123       31,872 (6)      63,744                         2,437,464  
      POs       3/10/2016                         36,932       123,106 (7)      307,765                   71.22       2,437,499  

Gino A. Bonanotte 

    STIP       1/1/2016 (4)      0       613,115       1,201,705                                            
      LRIP       1/1/2016 (5)      200,000       666,666       1,666,665                                            
      MSUs       3/10/2016                         5,230       8,717 (6)      17,434                         666,647  
      POs       3/10/2016                         10,101       33,670 (7)      84,175                   71.22       666,666  

Bruce W. Brda 

    STIP       1/1/2016 (4)      0       523,231       1,025,533                                            
      LRIP       1/1/2016 (5)      140,000       466,666       1,166,665                                            
      MSUs       3/10/2016                         3,661       6,102 (6)      12,204                         466,661  
      POs       3/10/2016                         7,071       23,569 (7)      58,923                   71.22       466,666  

Mark S. Hacker 

    STIP       1/1/2016 (4)      0       500,020       980,039                                            
      LRIP       1/1/2016 (5)      130,000       433,334       1,083,335                                            
      MSUs       3/10/2016                         3,400       5,666 (6)      11,332                         433,317  
      POs       3/10/2016                         6,566       21,885 (7)      54,713                   71.22       433,323  

John P. Molloy 

    STIP       1/1/2016 (4)      0       472,735       926,561                                            
      LRIP       1/1/2016 (5)      140,000       466,666       1,166,665                                            
      MSUs       3/10/2016                         3,661       6,102 (6)      12,204                         466,661  
      POs       3/10/2016                         7,071       23,569 (7)      58,923                   71.22       466,666  

 

(1) In the aggregate, the MSUs (at target) described in this table represent approximately 0.035% of the total shares of Common Stock outstanding on February 1, 2017. MSUs are not eligible for dividend equivalent rights. Each of these MSU target awards were granted under the Omnibus Plan. The fair value for MSUs is determined using a Monte Carlo simulation model.
(2) In the aggregate, the options (at target) described in this table are exercisable for approximately 0.137% of the total shares of Common Stock outstanding on February 1, 2017. All option awards were granted under our Omnibus Plan. All options entitle the holder to acquire shares of Common Stock at the exercise price determined on the grant date. The options carry the right to elect to have shares withheld upon exercise and/or to deliver previously-acquired shares of Common Stock to satisfy tax-withholding requirements. Options may be transferred to family members or certain entities in which family members have an interest. All options expire at the end of ten years. However, options could expire or be cancelled earlier in certain situations.
(3) The exercise price of option awards is based on the fair market value of our Common Stock at the time of grant, which is the closing price for a share of our Common Stock on the date of grant.
(4) These grants were made pursuant to the STIP for the 2016 plan year and are payable in cash. The STIP is the Company’s annual pay-for-performance bonus plan that is based on a formula that combines Company and individual performance. For a detailed discussion of the STIP, including the targets and plan mechanics, see Compensation Discussion and Analysis. Threshold payouts assume the minimum individual performance factor of 0.0. Target payouts assume individual and business performance factors of 1.0. Maximum payouts assume the maximum individual and business performance factors of 1.4. Awards under the STIP for NEOs are determined using their eligible earnings and individual incentive target percentages for the plan year.
(5) These grants are for the 2016-2018 LRIP. Awards under the 2016-2018 LRIP cycle are determined in dollars but, at the discretion of the Compensation and Leadership Committee, may be paid in cash or Common Stock. For a discussion of the LRIP, including the targets and plan mechanics, see Compensation Discussion and Analysis. The amounts under Threshold assume the minimum performance level necessary to generate an award was achieved. If final cycle performance is below the minimum performance level at the end of the three-year cycle, awards will be $0. The amounts under Target assume the target level of performance is achieved. The amounts under Maximum will be payable if Motorola Solutions’ three-year total shareholder return ranks in the top 10th percentile among the S&P 500.
(6) MSUs are granted at target on the grant date. Actual shares are earned and vest on the first, second and third anniversary of the grant date based on stock price appreciation or depreciation. For every 1% increase or decrease in stock price, MSUs earned on the performance measurement date will increase or decrease by 1%. Maximum opportunity is 200% of the target award for 100% stock price appreciation. Minimum opportunity is 60% of the target award at 40% stock price depreciation. On March 10, 2017, the first anniversary of the grant date, the Company’s stock had appreciated by 16%; therefore, one-third of the target award was earned at 116%.
(7) Performance options are granted at target on the grant date. Actual options are earned and vest on the third anniversary of the grant date based on the payout factor that corresponds with the Company’s relative total shareholder return percentile rank amongst the S&P 500. Maximum opportunity is 250% of the target award if percentile rank is at least the 90th percentile. Minimum opportunity is 30% of the target award if percentile rank is at least the 30th percentile.

 

40   Motorola Solutions Notice of 2017 Annual Meeting of Stockholder and Proxy Statement


Table of Contents

OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END

 

    Option Awards   Stock Awards

 Name

 (a)

   Grant 
Date
 

Number of
Securities
Underlying
Unexercised
Options  (#)
Exercisable
(Vested)

(b)

 

Number of
Securities
Underlying
Unexercised

Options (#)
Unexercisable
(Unvested)

(c)

 

Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)

(d)

 

Option
Exercise
Price

($)

(e)

 

Option
Expiration
Date

(f)

   Grant 
Date
 

Number

of Shares
or Units of
Stock

That Have
Not Vested
(#)

(g)

 

Market
Value of
Shares or
Units of
Stock

That Have

Not Vested
($)
(1)

(h)

 

Equity
Incentive

Plan Awards:
Number of
Unearned

Shares,

Units or

Other Rights

That Have

Not Vested

(#)

(i)

 

Equity
Incentive

Plan Awards
Market or
Payout Value

of Unearned
Shares,

Units or

Other Rights
That Have

Not Vested

($)(1)

(j)

 Gregory Q. Brown 

    8/27/2008       552,521 (2)      0               40.33       8/27/2018       3/10/2014       9,826 (3)      814,477                  
      8/27/2008       134,297 (4)      0               40.33       8/27/2018       3/9/2015                       25,535 (5)      2,116,596  
      5/7/2009       270,826 (6)      0               26.13       5/7/2019       3/10/2016                       31,872 (7)      2,641,870  
      5/5/2010       264,635 (8)      0               28.86       5/5/2020                                          
      2/1/2011       665,778 (9)      0               39.02       2/1/2021                                          
      2/22/2011       48,489 (10)      0               38.04       2/22/2021                                          
      2/22/2011       471,398 (10)      0               38.04       2/22/2021                                          
      5/2/2012       281,731 (11)      0               51.33       5/2/2022                                          
      5/13/2013       362,894 (12)      0               56.17       5/13/2023                                          
      3/10/2014       217,956 (13)      108,977 (13)              66.43       3/10/2024                                          
      3/9/2015                       132,749 (14)      66.57       3/9/2025                                          
      8/25/2015                       787,498 (15)      68.50       8/25/2022                                          
      3/10/2016                       123,106 (16)      71.22       3/10/2026                                          

 TOTAL

            3,270,525       108,977       1,043,353                               9,826       814,477       57,407       4,758,466  

 Gino A. Bonanotte 

    5/13/2013       7,161 (8)      0         56.17       5/13/2023       3/10/2014       1,003 (8)      83,139      
    8/14/2013       16,040 (8)      0         57.71       8/14/2023       3/10/2014       2,508 (3)      207,888      
    3/10/2014       16,681 (8)      8,339 (8)        66.43       3/10/2024       3/9/2015           7,361 (5)      610,153  
    3/10/2014       27,824 (13)      13,912 (13)        66.43       3/10/2024       3/10/2016           8,717 (7)      722,552  
    3/9/2015           38,270 (14)      66.57       3/9/2025            
    8/25/2015           160,417 (15)      68.50       8/25/2022            
    3/10/2016           33,670 (16)               

 TOTAL

            67,706       22,251       232,357                               3,511       291,027       16,078       1,332,705  

 Bruce W. Brda

    3/10/2014       5,143 (8)      2,571 (8)              66.43       3/10/2024       3/10/2014       1,392 (8)      115,383                  
      6/2/2014       6,196 (8)      3,097 (8)              67.40       6/2/2024       6/2/2014       989 (8)      81,978                  
      3/9/2015       4,146 (8)      8,291 (8)              66.57       3/9/2025       3/9/2015       3,755 (8)      311,252                  
      8/25/2015                       160,417 (15)      68.50       8/25/2025       3/10/2016                       6,102 (7)      505,795  
      3/10/2016                       23,569 (16)      71.22       3/10/2026                                          

 TOTAL

            15,485       13,959       183,986                               6,136       508,613       6,102       505,795  

 Mark S. Hacker

    5/2/2012       4,581 (8)      0         51.33       5/2/2022       3/10/2014       2,508 (3)      207,888      
    4/1/2013       7,411 (17)      0         63.70       4/1/2023       1/23/2015       1,018 (8)      84,382      
    5/13/2013       5,815 (8)      0         56.17       5/13/2023       3/9/2015           5,520 (5)      457,553  
    6/17/2013       37,700 (8)      0         57.33       6/17/2023       3/10/2016           5,666 (7)      469,655  
    3/10/2014       27,824 (13)      13,912 (13)        66.43       3/10/2024            
    1/23/2015       3,122 (8)      6,241 (8)        65.48       1/23/2025            
    3/9/2015           28,702 (14)      66.57       3/9/2025            
    8/25/2015           160,417 (15)      68.50       8/25/2022            
    3/10/2016           21,885 (16)      71.22              

 TOTAL

            86,453       20,153       211,004                               3,526       292,270       11,186       927,208  

 John P. Molloy

    5/8/2007       1,071 (18)      0               74.35       5/8/2017       3/3/2014       378 (8)      31,332                  
      2/1/2013       5,307 (19)      0               58.87       2/1/2023       3/10/2014       1,392 (8)      115,383                  
      3/3/2014       4,325 (8)      2,162 (8)              65.98       3/3/2024       3/9/2015       3,755 (8)      311,252                  
      3/10/2014       5,143 (8)      2,571 (8)              66.43       3/10/2024       11/10/2015       975 (8)      80,818                  
      3/9/2015       4,146 (8)