DEF 14A 1 d25774ddef14a.htm DEF 14A DEF 14A
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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  ☐

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  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)

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Table of Contents

                    

 

 

 

 

 

 

 

 

 

 

 

 

Notice of

 

2021 ANNUAL MEETING

 

of Shareholders and Proxy Statement

 

 

 

LOGO

 


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LOGO

Dear Fellow Motorola Solutions Shareholder:

On behalf of Motorola Solutions, the board of directors and our employees, thank you for your continued support. We value your investment in our company, enabling us to deliver the mission critical technologies for public safety and enterprise that make communities safer and help businesses stay productive and secure.

The significance of our purpose as a company has never been more meaningful than in this last year –we help people be their best in the moments that matter – and 2020 was a year of unprecedented moments.

From the onset of the COVID-19 pandemic, we responded to unexpected developments with agility and focus. During this time, a few things stood out: our people are extraordinary, our strategy is sound, our business is resilient, and our mission critical solutions keep communities and people safe. And as first responders around the world responded to COVID-19, natural disasters, extreme weather, crime and accidents, we are incredibly proud that our mission critical solutions played a key role in this important work.

Throughout the year, we focused on:

 

   

Prioritizing the safety and welfare of our people and those we serve.

 

   

Reliably delivering the mission critical solutions that thousands of public safety agencies and enterprise customers – and millions of people around the world – rely on.

 

   

Investing in innovation, launching new products across our technologies and accelerating product migration to the cloud.

 

   

Building on our commitment to diversity, equity and inclusion with a new unconscious bias curriculum for our global workforce and the appointment of our Chief Diversity Officer.

 

   

Giving back to our communities where we work and live through grants of more than $12 million to charitable organizations, including $2 million to support COVID-19 relief efforts.

 

   

Reducing Scope 1 and 2 greenhouse gas emissions by 31%, well in advance of our 2022 goal.

 

   

Maintaining our disciplined and strategic approach to capital allocation, with a focus on investing for the long term and delivering superior value to shareholders, resulting in total shareholder return of 451%, compared to the S&P 500’s total shareholder return of 267%, since our public listing in 2011.

The driving force behind our ability to navigate the challenges of 2020 is our 18,000 employees around the world, and I have never been more proud to lead such an exceptional team. Their support for our customers, our communities and each other is unwavering. At the same time, we remained focused on our strategy to deliver mission critical technologies for public safety and enterprise. We’ve increased our total addressable market to just under $40 billion, transformed from primarily selling hardware to being a solutions provider for public safety and enterprise, generating more than a third of our revenue from software and services, and we ended the year with a record backlog of $11.4 billion.

Motorola Solutions is positioned well for the long term. Our performance in 2020 demonstrates that by operating responsibly, investing in our future and having strong values to guide us, we can continue advancing the interests of our employees and communities, and creating value for our customers and shareholders. Thank you for your support.

Sincerely,

 

LOGO

Gregory Q. Brown

Chairman and CEO


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LOGO

 

PRINCIPAL EXECUTIVE OFFICES:

500 West Monroe Street

Chicago, Illinois 60661

April 1, 2021

NOTICE OF 2021 VIRTUAL ANNUAL MEETING OF SHAREHOLDERS

Annual Meeting Date: Tuesday, May 18, 2021

Time: 9:30 a.m. Central Time

Virtual Meeting Site: www.virtualshareholdermeeting.com/MSI2021

This year’s virtual annual meeting (the “Annual Meeting”) will be held entirely online via live audio webcast due to the public health impact of the COVID-19 pandemic and to support the health and wellness of our shareholders, directors and team members. The Annual Meeting will begin promptly at 9:30 a.m. Central Time. For more information regarding how to attend the Annual Meeting online, please see the section titled “User’s Guide” on page 80 of this Proxy Statement. Shareholders will be able to listen, vote, and submit questions from their home or from any remote location that has internet connectivity. There will be no physical location for shareholders to attend. Shareholders may only attend, vote, and submit questions during the Annual Meeting by logging in at www.virtualshareholdermeeting.com/MSI2021 and entering the 16-digit control number included in their Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card.

The purpose of the meeting is to:

1.

elect the seven director nominees named in this Proxy Statement for a one-year term;

2.

ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2021;

3.

hold a shareholder advisory vote to approve the Company’s executive compensation; and

4.

act upon such other matters as may properly come before the Annual Meeting.

Only Motorola Solutions shareholders of record at the close of business on March 19, 2021 (the “record date”) will be entitled to notice of, and to vote at, the meeting or any adjournment or postponement thereof. The Notice of Internet Availability of Proxy Materials, which contains instructions on how to access this Proxy Statement, the proxy card and the Company’s 2020 Annual Report, is first being mailed to shareholders on or about April 1, 2021. In addition, this Proxy Statement, the proxy card and the Company’s 2020 Annual Report are available at www.ProxyVote.com.

If you are a “street name” shareholder (meaning that your shares are registered in the name of your broker, bank or other nominee), you will receive instructions from such bank, broker or other nominee describing how to vote your shares.

By order of the Board of Directors,

 

LOGO

Kristin L. Kruska

Secretary

 

 

 

  REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:

 

   

   LOGO

 

 

VIA THE INTERNET

 

 

 

LOGO

 

 

BY MAIL

 

 
 

Visit the website shown on your Motorola Solutions Notice of Internet Availability of Proxy Materials for the 2021 Annual Meeting (your “Notice”) or proxy card to vote via the internet.

 

 

If you received a printed copy of the proxy card, mark, sign, date and return the proxy card using the postage-paid envelope provided.

 

 

     LOGO

 

 

 

BY TELEPHONE

 

 

    LOGO

 

 

 

AT THE VIRTUAL ANNUAL MEETING

 

   
 

Use the toll-free telephone number listed on your proxy card.

 

 

Via the internet at the virtual Annual Meeting at www.virtualshareholdermeeting.com/MSI2021

 

 

PLEASE NOTE THAT ATTENDANCE AT THE MEETING WILL BE LIMITED TO SHAREHOLDERS OF MOTOROLA SOLUTIONS AS OF THE RECORD DATE (OR THEIR AUTHORIZED REPRESENTATIVES). THIS MEETING WILL TAKE PLACE ONLINE ONLY. THERE IS NO PHYSICAL LOCATION. In order to attend the meeting, you will need the 16-digit control number included on your Notice, proxy card or voting instruction form.

 

     


Table of Contents

TABLE OF CONTENTS

 

    

PROXY STATEMENT

 

PROXY STATEMENT SUMMARY

    1  

MOTOROLA SOLUTIONS’ ENVIRONMENTAL, SOCIAL AND GOVERNANCE FRAMEWORK

    6  

OUR BOARD

    11  

PROPOSAL NO. 1 — ELECTION OF DIRECTORS NAMED IN THIS PROXY STATEMENT FOR A ONE-YEAR TERM

    11  

WHO WE ARE – BOARD

    11  

OUR BOARD’S QUALIFICATIONS

    15  

HOW OUR BOARD IS SELECTED AND ASSESSED

    15  

HOW OUR BOARD GOVERNS THE COMPANY

    17  

OUR BOARD’S LEADERSHIP STRUCTURE

    21  

COMMITTEES OF THE BOARD

    22  

INDEPENDENCE

    23  

RELATED PERSON TRANSACTION POLICY AND PROCEDURES

    24  

HOW YOU CAN COMMUNICATE WITH OUR BOARD

    24  

HOW WE DETERMINE DIRECTOR COMPENSATION

    24  

HOW OUR DIRECTORS ARE COMPENSATED

    25  

OUR COMPANY

    28  

WHO WE ARE

    28  

OUR LEADERSHIP TEAM

    29  
PROPOSAL NO. 2 — RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021     31  
OUR PAY     32  
PROPOSAL NO. 3 — ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION     32  
COMPENSATION DISCUSSION AND ANALYSIS     33  

SAY ON PAY VOTE RESULTS AND SHAREHOLDER ENGAGEMENT

    34  

EXECUTIVE SUMMARY

    35  

PROCESS FOR DETERMINING EXECUTIVE COMPENSATION

    44  

2020 ANNUAL COMPENSATION ELEMENTS

    47  

COMPARATIVE MARKET DATA

    49  

EQUITY USAGE UNDER OUR COMPENSATION PROGRAMS

    50  

OTHER COMPENSATION POLICIES AND PRACTICES

    51  

COMPENSATION AND LEADERSHIP COMMITTEE REPORT

    54  

COMPENSATION AND LEADERSHIP COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

    54  

NAMED EXECUTIVE OFFICER COMPENSATION

    55  

2020 SUMMARY COMPENSATION TABLE

    55  

GRANTS OF PLAN-BASED AWARDS IN 2020

    58  

OUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR-END

    60  

OPTION EXERCISES AND STOCK VESTED IN 2020

    62  

NONQUALIFIED DEFERRED COMPENSATION IN 2020

    62  

RETIREMENT PLANS

    63  

PENSION BENEFITS IN 2020

    64  

EMPLOYMENT CONTRACTS

    64  

TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS

    65  

CEO PAY RATIO

    72  

EQUITY COMPENSATION PLAN INFORMATION

    73  

AUDIT COMMITTEE MATTERS

    74  

REPORT OF AUDIT COMMITTEE

    74  

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

    76  

AUDIT COMMITTEE PRE-APPROVAL POLICIES

    76  

OUR SHAREHOLDERS

    77  

SECURITY OWNERSHIP INFORMATION

    77  

USER’S GUIDE

    80  

INSTRUCTIONS FOR VIRTUAL ANNUAL MEETING

    80  

VOTING MATTERS

    80  

IMPORTANT DATES FOR THE 2022 ANNUAL MEETING

    84  

OTHER MATTERS

    86  

 

     


Table of Contents

 

LOGO

 

 

PROXY STATEMENT SUMMARY

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,” “MSI” or the “Company”). Proxies are being solicited on behalf of the Board of Directors of the Company (the “Board”) to be used at the 2021 Annual Meeting of Shareholders (the “Annual Meeting”) to be held virtually at www.virtualshareholdermeeting.com/MSI2021 on Tuesday, May 18, 2021 at 9:30 a.m. Central Time, for the purposes set forth in the Notice of 2021 Virtual Annual Meeting of Shareholders. This Proxy Statement is dated April 1, 2021 and is being distributed to shareholders on or about April 1, 2021.

WHAT IS MOTOROLA SOLUTIONS?

Motorola Solutions is a global leader in mission critical communications and analytics. Our technologies in Land Mobile Radio Mission Critical Communications (“LMR Mission Critical Communications”), Command Center Software, and Video Security and Analytics, bolstered by managed and support services, make communities safer and help businesses stay productive and secure. At Motorola Solutions, we are ushering in a new era in public safety and security. We serve more than 100,000 public safety and commercial customers in over 100 countries, providing “purpose-built” solutions designed for their unique needs. Headquartered in Chicago, we have a rich heritage of innovation dating back to 1928 that our approximately 18,000 employees continue today.

PERFORMANCE AND ACCOMPLISHMENTS

TOTAL SHAREHOLDER RETURN (in percent)

 

LOGO

PERFORMANCE HIGHLIGHTS SINCE 2011

 

 

451%

  TOTAL  

  SHAREHOLDER  

RETURN*

 

   

 

  51%

REDUCTION

IN SHARE

COUNT

 

   

 

$16.3

BILLION

 IN CAPITAL

RETURN 

 

 

*

Based on the split adjusted closing price of MSI common stock on December 31, 2010 and the closing price of MSI common stock on December 31, 2020, illustrating the growth of an initial investment of $100 on December 31, 2010, including payment of dividends.

 

Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement   1


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     2020 HIGHLIGHTS

 

   

   Grew Software and Services revenue by 9%

 

  Grew backlog 2% compared to 2019, to record $11.4 billion

 

   Record LMR Mission Critical Communications orders in North America in fourth quarter of 2020

 

   Increased quarterly dividend 11% to $0.71 per share

 

   Capital allocation of cash included $612 million of share repurchases, $436 million of dividends, and $287 million for acquisitions

 

   Generated $1.6 billion of operating cash flow

 

   Refinanced approximately $900 million of debt with a new ten-year debt issuance at 2.3%

 

  

   Added approximately 500 new patents, bringing current patent portfolio to just over 6,100 patents

 

   Increased cybersecurity capabilities with acquisitions of two cybersecurity services businesses

 

   Acquired Pelco, Inc. and IndigoVision Group plc, global providers of video security solutions

 

   Acquired Callyo, a provider of cloud-based mobile applications for law enforcement

 

   Accelerated product migration to the cloud across LMR Mission Critical Communications, Command Center Software and Video Security and Analytics

  

   Ranked No. 5 in Fortune World’s Most Admired Companies List for Network and Other Communications Equipment (third consecutive year in Top 5)

 

   Ranked No. 27 in The Wall Street Journal Top 100 Most Sustainably Managed Companies in the World, 2020

 

   Ranked No. 19 in Barron’s Top 100 Sustainable U.S. Companies

 

   Named to Newsweek’s list of America’s Most Responsible Companies

 

   Ranked No.108 Wall Street Journal Management Top 250

 

COVID-19 IMPACT ON THE COMPANY AND RESPONSE

With our legacy of pioneering the mission critical technologies that make communities safer and help businesses stay productive and secure, we continued to help people be their best in the moments that matter during the COVID-19 pandemic in 2020.

During the COVID-19 pandemic, the actions of our team members have embodied the Motorola Solutions culture and values that unite us. We have continued to ensure customer continuity by fulfilling emergency orders, completing remote software maintenance where possible, and servicing our mission critical networks on-site as needed to ensure seamless operations. Our sales teams have also continued to improve virtual engagement with our customers. Additionally, our engineering teams have adapted our solutions offerings to equip our customers with the latest technology in an effort to protect their workplaces from the spread of COVID-19. Specifically, in Video Security and Analytics, we have adapted our software and hardware offerings to provide analytics addressing occupancy counting, face mask detection, and thermal detection capabilities.

At Motorola Solutions, there is a shared understanding of the importance of protecting the health and safety of our team members, our families and our communities. We have taken early and aggressive action to help prevent the spread of the virus in our workplaces. At the same time, we are appropriately addressing the ongoing needs of our business so that we may continue to provide the technologies that are so vital to our world. We continue to abide by a number of measures in an effort to protect the health and well-being of our employees and customers, including having office workers work remotely, suspending employee travel, withdrawing from certain industry events, increasing the frequency of cleaning services, encouraging face coverings, and using thermal scanning.

In addition to the investments in the safety of our team members, we invested in the well-being and mental health and wellness of our employees during this challenging time by offering various wellness programs. We took certain other actions in response to COVID-19 as well, including our contributions of $2 million through the Motorola Solutions Foundation to support COVID-19 relief efforts, and our sponsorship of an initiative in collaboration with the National Minority Supplier Development Council to invest in minority businesses struggling to recover from the economic effects of COVID-19. Additional information regarding our response to COVID-19 can be found in the section of this Proxy Statement titled “Motorola Solutions’ Environmental, Social and Governance Framework” beginning on page 6.

We have also taken actions in a number of areas to reduce our operating expenses, including lower variable employee compensation, travel costs, independent contractor spend, and taking measures to reduce our global real estate footprint; however, a portion of these expenses, primarily variable compensation and certain travel expenses, are likely to return in 2021. In addition, our supply chain partners have been supportive and continue to work to fulfill the necessary service levels to Motorola Solutions and our customers.

While significant challenges lie ahead, we believe the criticality of our solutions and our team’s unwavering execution throughout 2020 positions us for strong growth in 2021, as we continue to embody our purpose in “Helping people be their best in the moments that matter.”

 

2   Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement


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  2021 ANNUAL MEETING OF SHAREHOLDERS

 

     

Date and Time: Tuesday, May 18, 2021, 9:30 a.m. Central Time

 

     

Virtual Meeting Site: www.virtualshareholdermeeting.com/MSI2021

 

     

Record Date: March 19, 2021

 

     

Voting: Shareholders 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.

 

     

Online meeting only: No physical location

 

 
  Items to be Voted On    Our Board’s Recommendation        
 

  Election of the Seven Director Nominees Named in this Proxy Statement for a One-Year Term (page 11)

  

FOR

 

  Ratification of the Appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for 2021 (page 31)

  

FOR

 

  Advisory Approval of the Company’s Executive Compensation (page 32)

  

FOR

 

 

 

   

DIRECTOR NOMINEE HIGHLIGHTS (page 11)

 

      

Board Committees

(as of April 1, 2021)

               
 Name  

Director  

Since  

  Indep.    

Other

Public Co.  

Boards

  Position     Audit       Comp.    

  Gov. &  

Nom.

    Exec.  
               

 Gregory Q. Brown

  2007             0    

Chairman and CEO,

Motorola Solutions, Inc.

 

              LOGO

 

               

 Kenneth D. Denman

  2017      

 

LOGO

 

 

 

  2    

Venture Partner,

Sway Ventures

 

      LOGO

 

  LOGO

 

  LOGO

 

               

 Egon P. Durban

  2015      

 

LOGO

 

 

 

  5    

Co-CEO of Silver Lake

 

      LOGO

 

       
               

 Clayton M. Jones

  2015      

 

LOGO

 

 

 

  1    

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    

Co-CEO of Silver Lake

 

  LOGO

 

      LOGO

 

   
               

 Joseph M. Tucci

  2017      

 

LOGO

 

 

 

  2    

Chairman of Bridge Growth Partners and Lead Director GTY Technology Holdings, Inc.

 

     

 

LOGO

 

 

LOGO

 

 

LOGO

LOGO  = Chair of Committee

 

Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement   3


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DIVERSITY OF SKILLS AND EXPERIENCE

 

             
   

Gregory Q.

Brown

    Kenneth D.
Denman
   

Egon P.

Durban

   

Clayton M.

Jones

   

Judy C.

Lewent

    Gregory K.
Mondre
    Joseph M.
Tucci
 
             

Independence

                               
             

Gender and ethnic diversity

                                               
             

Relevant industry experience

                               
             

Public Company CEO, division CEO or CFO

                                   
             

Financial and accounting expertise

                           
             

Technology expertise

                           
             

Cybersecurity, safety and security experience

                                           
             

Software and services business experience

                                   
             

Global business experience

                           
             

Developing markets experience

                               
             

Government, public policy, regulatory experience

                                       
             

Private equity, investment banking or capital allocation experience

                           
             

Public company board experience

                           

DIRECTOR NOMINEES STATISTICS

 

 

Independence

86%

 

 

 

Average Tenure

6 Years

 

 

 

Gender/Ethnic Diversity

29%

 

 

 

Average Age

62 Years

 

 

4   Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement


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GOVERNANCE HIGHLIGHTS (page 15)

 

     

Implemented proxy access amendment to our amended and restated bylaws (our “Bylaws”) in August 2020

 

     

Governance and Nominating Committee oversight of environmental, social and governance (“ESG”) matters

 

     

6 of our 7 directors are independent, including all committee members

 

     

Lead Independent Director

 

     

Regular executive session meetings of independent directors

 

     

Annual election of directors

 

     

Annual director self-assessment process

 

     

No supermajority voting provisions in our organizational documents

 

     

No “poison pill”

 

     

Robust oversight of risk

 

     

Director Independence Guidelines

 

     

Majority voting standard in uncontested director elections

 

     

20% threshold for shareholder right to call special meeting

 

     

Shareholder right to act by written consent

 

     

Succession planning

 

     

Proactive shareholder engagement

EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS (page 33)

 

     

Pay-for-performance and at-risk compensation

 

     

A significant portion of our targeted annual compensation is performance-based and/or subject to forfeiture (“at-risk”), with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by our Company’s strategy. For 2020, performance-based compensation comprised approximately 93% of the targeted annual compensation for our CEO and, on average, approximately 82% of the targeted annual compensation for our other NEOs.

 

     

Compensation aligned with shareholder interests

 

     

Performance measures for incentive compensation are linked to the overall performance of the Company and are designed to be aligned with the creation of long-term shareholder value.

 

     

Emphasis on future pay opportunity vs. current pay

 

     

Our long-term incentive awards are equity-based, use multi-year vesting provisions to encourage retention, and are designed to align our NEOs’ interests with long-term shareholder interests. For 2020, long-term equity compensation comprised approximately 80% of the targeted annual compensation for our CEO and, on average, approximately 65% of the targeted annual compensation for the other NEOs.

 

     

Retention of independent compensation consultant

 

     

Annual “say on pay” vote

 

     

No excise tax gross-up provisions

 

     

A recoupment “clawback” policy for compensation paid to certain officers

 

     

Robust stock ownership guidelines for directors and officers

 

     

An anti-hedging policy

 

     

“Double trigger” severance benefits in the event of a change in control

 

     

No repricing of options without shareholder approval

 

     

No excessive perquisites

 

Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement   5


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MOTOROLA SOLUTIONS’ ENVIRONMENTAL, SOCIAL AND GOVERNANCE FRAMEWORK

Our ESG Framework demonstrates our governance standards and our social and environmental commitment to create value for our planet and our employees, customers, and the communities that thrive on it.

 

 

LOGO

 

LOGO

 

6   Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement


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LOGO

 

Community Engagement

  

   The Motorola Solutions Foundation (the “Foundation”), which has donated $100 million over the past 10 years to students, teachers, first responders, veterans and community members, allocated the majority of its 2020 grant funding to programs that directly support people of color.

 

   In 2020, the Foundation granted more than $12 million to charitable organizations across the globe. More than $8 million of that amount was awarded through our strategic grants program in support of first responder programming and technology/engineering education. $2 million was awarded to support COVID-19 relief efforts, including by supplying personal protective equipment to hospitals and aiding teachers and students in underserved communities with virtual learning.

 

   Despite the challenges of 2020, Motorola Solutions employees found creative ways to give back safely, virtually and in their local communities. During our virtual Global Months of Service, a volunteerism competition during September and October, employees logged over 14,000 volunteer hours.

 

   In 2020, there was a 63% increase in the number of U.S. employees entering charitable donations under our Donations for Donors employee program, resulting in nearly $1 million in matching gift contributions.

 

   In 2020, the Foundation offered a 2:1 match incentive for gifts entered on Giving Tuesday, resulting in 455 employees entering a total of 897 gifts in the system. Gifts benefitted 680 nonprofit organizations and schools across 42 states.

LOGO

 

Human Capital Management

  

   When faced with the COVID-19 pandemic, we embodied our purpose in “Helping people be their best in the moments that matter.” To ensure the safety of our employees who continue to work on-site, we developed a COVID-19 Workplace Screening Policy, which applies to employees, contractors and visitors of Motorola Solutions’ facilities. We also enabled a work from home environment in March 2020 for our employees not required to be on-site. In 2020, video work calls averaged 11,000 calls per day (vs. 1,000 pre-COVID-19), with over 300 LiveStreams and 4,500 collaborative “Just a Minute (JAM)” sessions during the year. These virtual platforms also enabled us to provide a series of webinars focused on mental health and wellness and other programs to foster a healthy, collaborative, and balanced professional environment.

 

   Our Board is committed to human capital management practices that promote diversity, equity and inclusion as a business imperative that drives productivity, engagement and innovation. We appointed a Chief Diversity Officer who has over 25 years of experience leading diversity, equity and inclusion initiatives in complex organizations to develop and drive enterprise-wide strategies. We conducted employee digital focus groups across the globe to gather sentiment from more than 4,000 employees regarding our company’s culture, policies and practices with respect to diversity, equity and inclusion, in order to develop programs and drive numerous initiatives across our global organization. We also invested in development programs for high-potential female leaders and added an unconscious bias curriculum to our global workforce.

 

   We are proud to have six employee resource groups known as Business Councils: Women’s Business Council, Multicultural Business Council, LGBTA Business Council, People with Disabilities and Allies Council, Veterans Business Council and Young Professionals Group. These employee-championed volunteer cohorts connect via shared values and interests and host events focused on improving representation of underrepresented groups, professional and leadership development, community outreach, and employee engagement.

 

   We are consistently recognized for our efforts in Human Capital Management, receiving awards in 2020 such as: Fortune World’s Most Admired Companies, Forbes America’s Best Employers for Diversity, Human Rights Campaign Corporate Equality Index, and Disability Equality Index® (DEI®) Best Places to Work.

 

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LOGO

 

Our Business

  

   Core to our business is our ability to enable mission critical communications and mobile workflow applications to improve the safety and efficiency of our customers and the communities they serve. During the COVID-19 pandemic we leveraged our video and software products and technology to offer solutions to our customers to provide capabilities such as occupancy counting to prevent overcrowding as well as elevated body temperature detection to help ensure our customers have the technology required to act safely and efficiently during the health crisis and beyond.

 

   We established the Motorola Solutions Technology Advisory Committee (“MTAC”), which is a cross collaborative advisory committee that acts as a technical conscience for the company. The MTAC assesses technologies along with their application to Motorola Solutions’ products and services and develops guidelines to advise and govern application of those technologies. This body addresses cultural considerations for our products and services, with special attention on artificial intelligence (“AI”) and facial recognition. The efforts of MTAC include the publication of an internal code of conduct for data rights and ethics, and guidelines for the responsible use of AI and for delivery of facial recognition technology.

 

   In 2020, we established a cross-collaborative AI Employee Advisory Group to build community trust, ensure social responsibility and address cultural considerations for our products and services, with special attention on AI and facial recognition.

 

   We implemented an internal Governance, Risk, and Compliance (GRC) software platform that enables us to identify IT and cybersecurity vulnerabilities either internally or with our third-party vendors and partners and take proactive actions to ensure the fidelity and information security of our products and services. This software platform also better enables us to identify, monitor, manage, and resolve incidents across the enterprise.

 

   We have an ongoing program of compliance, with many sites and parts of the organization having achieved ISO 27001 Information Security Management certification. In addition, we are an active member of the Cloud Security Alliance (CSA), which aims to improve security within cloud computing environments while also following the National Institute of Standards and Technology (NIST) Cybersecurity Framework. Security is embedded in each phase of the development lifecycle. Extensive training programs and a robust Cybersecurity Champion program help to foster a strong security culture throughout the organization.

 

   In addition to our Enterprise Security team, which monitors information security for the entire Company, the Products and Services organization has a Cybersecurity group dedicated to providing secure products and services to our customers and engaging with them to improve their security posture. Within this group are many functional teams, including Governance, Risk and Compliance, Threat Intelligence, Secure Architecture and Design and Training and Awareness.

 

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LOGO

 

Governance and Compliance

  

  We are committed to responsible and effective corporate governance to enhance the creation of sustainable, long-term shareholder value and being accountable and responsive to all stakeholders.

 

  
We routinely conduct internal audits on ethical standards, including an annual fraud risk assessment.

 

  IT and cybersecurity governance and compliance are areas of critical importance to the success of our business. We have an online training platform that hosts more than 100 training courses that focus on products and services cybersecurity and enterprise information security.

 

   We also formed an ESG Governance Leadership Team in 2020. Chaired by two Executive Vice Presidents who collectively are responsible for Ethics & Compliance, Human Capital Management, Supply Chain/Procurement, Corporate Governance, Audit, Finance, and Environmental Health & Safety, the ESG Governance Leadership Team drives decision-making, accountability, and ownership of specific ESG strategies and initiatives.

 

   Our culture is steeped in governance and compliance, with programs and training from our Office of Ethics and Compliance. Because “tone-from-the-top” plays a crucial role in shaping employee behavior, the Office of Ethics and Compliance conducts one-on-one compliance program briefings with all new Vice Presidents and the leadership of newly acquired companies.

 

   The Office of Ethics and Compliance partners with the Audit Services organization to conduct quarterly meetings for key internal stakeholders to discuss our risk environment and participates in an annual session to rank enterprise risks, prepare disclosures for the Executive Committee and the Board, and develop mitigation strategies.

 

   We regularly update our Anti-Human Trafficking Statement to address changing regulations globally.

 

   We bolstered many of our data privacy compliance programs by increasing company-wide privacy training to an annual mandatory requirement, implementing processes and policies that are compliant with the California Consumer Privacy Act, and providing periodic updates to senior leadership and the Board on privacy risk management.

 

   For more information on our robust corporate governance structure, see the section of this Proxy Statement titled “Proposal No. 1 – Election of Directors Named in this Proxy Statement for a One-Year Term” beginning on page 11.

LOGO

 

Environment

  

  In 2020, we met our greenhouse gas goal of reducing Scope 1 and 2 emissions by 31%, in advance of our 2022 goal deadline. We have also reduced our greenhouse gas footprint by 34.4% since 2016.

 

  In 2020, we completed 28 energy reduction projects, which saved 3,387,781 kWh of energy. These projects included:

 

  A retro-commissioning project in Schaumburg, IL implementing building controls-based measures that produced savings by optimizing building operations. This project created electricity and gas savings of 941,051 kWh and 13,865 therms per year. The project participated in ComEd’s RCxpress utility rebate program and won the Project of the Year award from the program for most kWh saved by a single project.

 

  Upgrading the electric terminal reheat system in Schaumburg, IL with a new hydronic perimeter HVAC system. The new system is now able to be controlled by the centralized building automation system to further reduce consumption. The upgrade reduces the building’s peak demand by over 430 kW during the winter months.

 

   Due to the remote work transition as a result of the COVID-19 pandemic, we saved an estimated additional 2,325,221 kWh of energy consumption.

 

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LOGO

 

Supply Chain

  

  In the midst of the COVID-19 pandemic, we reinforced business resiliency for our supply chain ecosystem worldwide. Our Supplier Diversity team partners with local, agile and diverse suppliers to drive competition and innovation within our supply chain and the market. In 2020, as COVID-19 impacted diverse and small businesses, we sponsored the “In this Together” initiative in collaboration with the National Minority Supplier Development Council (“NMSDC”), an organization that is dedicated to investing in minority businesses that are struggling to recover from the economic downturn resulting from COVID-19 and that have sustained damage and vandalism during protests in 2020. NMSDC is also committed to eradicating the racial wealth gap and start-up capital gap in order to build and scale minority businesses, and financing the growth and development of designated Minority Business Enterprises operating in corporate and government supply chains.

 

  We expanded our supplier assessment program to include indirect suppliers.

 

  Our Procurement, IT, EHS, Communications, and Human Resources organizations worked together to ensure a healthy and safe working environment for our employees throughout the pandemic.

In 2020, we conducted a multi-stakeholder analysis of our most material ESG topics. We engaged internal leaders and employees as well as external stakeholders such as investors, suppliers, customers, and industry groups. The results of this assessment will guide our ESG strategy moving forward and help us to continue to align with the values of our key stakeholders.

For more information on our commitment to corporate responsibility, please see the 2019 corporate responsibility report at www.motorolasolutions.com/ en_us/about/company-overview/corporate-responsibility.html. We anticipate that our 2020 corporate responsibility report will be available at the website noted above during the summer of 2021. The information contained on or accessible through our corporate website is not incorporated by reference into and is not a part of this Proxy Statement.

 

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OUR BOARD

 

 

PROPOSAL NO. 1 — ELECTION OF DIRECTORS NAMED IN THIS PROXY STATEMENT FOR A ONE-YEAR TERM

Proposal Number 1 of this Proxy Statement enables you to vote on the members of your Board.* We open the Proxy Statement with this proposal because we believe there is no more important vote than that of electing the fiduciaries who oversee Motorola Solutions on your behalf.

To inform that vote, we provide you information here on, among other topics:

 

     

Who our Board is – including their qualifications

 

     

How our Board is selected and assessed

 

     

How the Board governs the Company

 

     

How our Board is organized

 

     

How you can communicate with the Board

 

     

How our Board is compensated

WHO WE ARE – BOARD

The Board believes that each nominee has the skills, experience and personal qualities the Board seeks in its directors, and that the combination of these nominees creates an effective and well-functioning Board, with a diversity of perspectives, viewpoints, backgrounds and professional experiences that best serves the Board, the Company and our shareholders.

Each of the nominees named below is currently a director of the Company, elected at the Annual Meeting of Shareholders held on May 11, 2020. The ages shown are current as of the date of this Proxy Statement. Included in each nominee’s biography is a description of select key qualifications, experience and characteristics, including each nominee’s self-identified race, that led the Board to conclude that each nominee is qualified to serve as a member of the Board.

 

 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: In the last five years Mr. Brown served on the board of Xerox Corporation from January 2017 to May 2019.

 

Board Committees: Executive (Chair)

 

Director Qualifications:

 

  Public company CEO, relevant industry, technology, software and services business, and cybersecurity, safety and security experience as Chairman and CEO of the Company and former Chairman and CEO of Micromuse, Inc.

 

  Financial and accounting expertise, global business, capital allocation, developing markets, government, public policy, and regulatory experience as Chairman and CEO of the Company, former chair and 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 the Business Roundtable and The Business Council, and former member of the President’s National Security Telecommunications Advisory Committee (NSTAC)

 

  Public company board experience

 

 

  LOGO  

 

 Principal Occupation:

 Chairman and Chief
 Executive Officer,
 Motorola Solutions, Inc.    

 

 Age: 60

 Race: White

 Director since: 2007

 Chairman since: 2011

    

    

    

 

* 

The number of directors of the Company to be elected at the Annual Meeting is seven. If elected by our shareholders at the Annual Meeting, each director nominee will serve a one-year term ending at the 2022 Annual Meeting of Shareholders. Each director will hold office until his or her respective successor is elected and qualified or until his or her earlier death or resignation. 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 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 has the authority under our Bylaws to increase or decrease the size of the Board and to fill vacancies between Annual Meetings of Shareholders.

 

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 KENNETH D.

 DENMAN

  

 

Mr. Denman is a Venture Partner at Sway Ventures, a venture capital firm that invests in early to mid-stage technology companies. He was the CEO and President of Emotient, Inc., a company that uses artificial intelligence to analyze facial expressions to detect emotions, from 2012 to 2016. He also served as the Chief Executive Officer of Openwave Systems Inc. from 2008 to 2011 and as a Director from 2004 to 2011. He served as the Chief Executive Officer and President and Director of iPass, Inc. from 2001 to 2008 and as its Chairman from 2003 to 2008.

 

Other Public Company Boards: Costco Wholesale Corporation and VMware, Inc. In the last five years Mr. Denman served on the boards of LendingClub Corporation from July 2017 to February 2021, Mitek Solutions, Inc. from December 2016 to December 2019, ShoreTel, Inc. from May 2007 to September 2017, and United Online from June 2015 to July 2016.

 

Board Committees: Compensation and Leadership, Governance and Nominating (Chair), Executive

 

Director Qualifications:

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

 

  Software and services business, cybersecurity and safety and security experience as CEO and President of Emotient, Inc., Openwave Systems, Inc. and iPass, Inc.

 

  Public company CEO, global business, and developing markets experience as CEO and President of iPass, Inc. and Openwave Systems, Inc.

 

  Private equity, investment banking, and capital allocation experience as a Venture Partner of Sway Ventures

 

  Public company board experience

 

 

  LOGO  

 

 Principal Occupation:

 Venture Partner,

 Sway Ventures

 

 Age: 62

 Race: Black

 Director since: 2017

 Lead Independent Director  

 since 2019

 Independent

    

    

    

    

 

 EGON P.

 DURBAN

 

  

 

Mr. Durban is Co-CEO of Silver Lake, a global private equity firm and is based in the firm’s Menlo Park office. Mr. Durban joined Silver Lake in 1999 as a founding principal and was previously Managing Partner and Managing Director from January 2013 to December 2019. 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: Dell Technologies Inc. and its majority owned subsidiary VMware, Inc., Qualtrics International Inc., which completed an initial public offering in January 2021, Twitter, Inc., and Unity Software, Inc., which completed an initial public offering in September 2020. In the last five years Mr. Durban served on the boards of Intelsat S.A from August 2011 to December 2016, Pivotal Software, Inc. from April 2018 to January 2020, and SecureWorks Corp. from December 2015 to May 2020.

 

Board Committees: Compensation and Leadership

 

Director Qualifications:

 

  Relevant industry, technology, global business, developing markets, and software and services business experience as Co-CEO of Silver Lake

 

  Financial and accounting expertise and private equity, investment banking and capital allocation experience as Co-CEO of Silver Lake and as a former associate with Morgan Stanley’s Investment Banking Division

 

  Public company board experience

 

 

  LOGO  

 

 Principal Occupation:

 Co-CEO,

 Silver Lake Partners

 (“Silver Lake”)

 

 Age: 47

 Race: White

 Director since: 2015

 Independent

 

 

 

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 CLAYTON M.

 JONES

  

 

Mr. Jones served as Chairman of the Board of Rockwell Collins from 2002 through July 2014, and as 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: Deere & Company. In the last five years, Mr. Jones served on the board of Cardinal Health, Inc. from September 2012 to November 2018.

 

Board Committees: Audit

 

Director Qualifications:

 

  Public company CEO, financial and accounting expertise, and global business experience as former CEO of Rockwell Collins

 

  Relevant industry, technology, cybersecurity, safety and security and private equity, investment banking and capital allocation experience as former CEO of Rockwell Collins and Corporate Officer and Senior Vice President of Rockwell International

 

  Government, public policy and regulatory experience as a former member of The Business Council, the Business Roundtable and 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: 71

 Race: White

 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. Prior roles at Merck include Executive Vice President from 2001 to 2007 and President, Human Health Asia from 2003 to 2005.

 

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

 

Board Committees: Audit (Chair), Executive

 

Director Qualifications:

 

  Public company CFO, financial and accounting expertise, capital allocation experience, and global business experience as the former CFO of Merck

 

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

 

  Developing markets experience as the former CFO of Merck and board member of GlaxoSmithKline

 

  Government, public policy, and regulatory experience as former CFO at Merck and board member of GlaxoSmithKline and Thermo Fisher

 

  Public company board experience

 

 

  LOGO  

 

 Principal Occupation:

 Retired; Formerly Executive  

 Vice President & Chief

 Financial Officer, Merck &

 Co., Inc. (“Merck”)

 

 Age: 72

 Race: White

 Director since: 2011

 Independent

 

 

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 GREGORY K.

 MONDRE

  

 

Mr. Mondre is Co-CEO of Silver Lake based in New York. Mr. Mondre joined Silver Lake in 1999 and was previously Managing Partner and Managing Director from January 2013 to December 2019. Prior to his time at Silver Lake, 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: Expedia Group and GoodRx Holdings, Inc. In the last five years, Mr. Mondre served on the boards of GoDaddy, Inc. from May 2014 to February 2020, and Sabre Corporation from March 2007 to December 2018.

 

Board Committees: Audit, Governance and Nominating

 

Director Qualifications:

 

  Relevant industry, technology, global business, developing markets, and software and services business experience as Co-CEO of Silver Lake

 

  Financial and accounting expertise and private equity, investment banking, and capital allocation experience as Co-CEO of Silver Lake and as former principal at TPG

 

  Public company board experience

 

  LOGO  

 

 Principal Occupation:

 Co-CEO,

 Silver Lake

 

 Age: 46

 Race: White

 Director since: 2015

 Independent

 

 

 

 JOSEPH M.

 TUCCI

  

 

Mr. Tucci is the Chairman of Bridge Growth Partners and Lead Director of GTY Technology Holdings, Inc. Mr. Tucci serves as a founder and director, and formerly as the Co-Chairman and Co-Chief Executive Officer from September 2016 to February 2019, of GTY Technology Holdings, a software-as-a-service company that offers a cloud-based suite of solutions for the public sector in North America. Mr. Tucci was the Chairman and Chief Executive Officer of EMC Corporation, a provider of enterprise storage systems, software, and networks. He was EMC’s Chairman from January 2006 and CEO from January 2001 until September 2016, when Dell Technologies acquired the company.

 

Other Public Company Boards: GTY Technology Holdings, Inc. and Paychex, Inc. In the past five years Mr. Tucci served on the boards of EMC Corporation from January 2001 to September 2016 and of VMware, Inc. from April 2007 to September 2016.

 

Board Committees: Compensation and Leadership (Chair), Governance and Nominating, Executive

 

Director Qualifications:

 

  Public company CEO, technology, global business, software and services business experience, and financial and accounting expertise as Chairman, CEO and President of EMC Corporation

 

  Relevant industry, developing markets, and private equity experience as Co-CEO and Co-Chairman of GTY Technology Holdings, Inc. and founding member and current Chairman 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:

 Chairman of Bridge Growth  

 Partners and Lead Director

 of GTY Technology

 Holdings, Inc.

 

 Age: 73

 Race: White

 Director since: 2017

 Independent

 

    

 

    

 

RECOMMENDATION OF THE BOARD

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

 

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OUR BOARD’S QUALIFICATIONS

We believe the Board 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 individuals with a mix of skills and qualifications which include:

 

     

Independence: Six of seven director nominees

 

     

Gender and ethnic diversity: Two of seven director nominees

 

     

Relevant industry experience: Six of seven director nominees

 

     

Public company CEO, division CEO or CFO: Five of seven director nominees

 

     

Financial and accounting expertise: All director nominees

 

     

Technology experience: All director nominees

 

     

Cybersecurity, safety and security experience: Three of seven director nominees

 

     

Software and services business experience: Five of seven director nominees

 

     

Global business experience: All director nominees

 

     

Developing markets experience: Six of seven director nominees

 

     

Government, public policy and regulatory experience: Four of seven director nominees

 

     

Private equity, investment banking or capital allocation experience: All director nominees

 

     

Public company board experience: All director nominees

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

HOW OUR BOARD IS SELECTED AND ASSESSED

Director Nominating Process

The Governance and Nominating Committee recommends candidates to the Board it believes are qualified and suitable to become members of the Board. The Governance and Nominating Committee also considers the performance of incumbent directors in determining whether to recommend them for re-election. 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 2020, we continued our retention of Russell Reynolds to assist with this process. Russell Reynolds compiles a list of candidates, evaluates each candidate and makes recommendations to the Governance and Nominating Committee. They screen candidates based on the Board’s criteria, perform reference checks, prepare a biography of each candidate for the Governance and Nominating Committee’s review and help arrange interviews if necessary. The Governance and Nominating Committee and the Chairman of the Board will conduct interviews with candidates who meet the Board’s criteria. Subject to the requirements set forth below in the section of this Proxy Statement titled “Agreement with Silver Lake” on page 17, the Governance and Nominating Committee has full discretion in considering potential candidates and making its nominations to the Board.

In connection with the New Investment Agreement (as defined herein) entered into with affiliates of Silver Lake, Messrs. Durban and Mondre are Silver Lake designees on the Company’s slate of nominees for election to the Board. For more information, see the section of this Proxy Statement titled “Agreement with Silver Lake” on page 17.

The Governance and Nominating Committee will consider nominees recommended by Motorola Solutions shareholders as described below. A description of certain considerations our Governance and Nominating Committee reviews in evaluating director nominees is described in “Skills, Experience, and Commitment to Diversity” on page 16 of this Proxy Statement. A shareholder wishing to propose a candidate for consideration should forward the candidate’s name and information about the candidate’s qualifications in writing to Secretary, Motorola Solutions, Inc., 500 West Monroe Street, Chicago, IL 60661. Our Secretary will forward all recommendations received to the Chair of our Governance and Nominating Committee for discussion and consideration. A shareholder who wishes to directly nominate an individual as a director candidate, rather than recommending the individual to the Governance and Nominating Committee as a nominee, must comply with the advance notice requirements for shareholder nominations set forth in Article III, Section 13 of our Bylaws or the proxy access process

 

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described on page 19 of this Proxy Statement and set forth in Article III, Section 17 of our Bylaws. See the section titled “Important Dates for the 2022 Annual Meeting” on page 84 of this Proxy Statement for further information on these procedures.

Skills, Experience, and Commitment to Diversity

The Board seeks members with varying professional backgrounds and other differentiating personal characteristics who combine a broad spectrum of experience and expertise with a reputation for integrity. The Board believes that maintaining a diverse membership enhances the Board’s discussions and enables the Board to better represent all of the Company’s constituents. 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; integrity; leadership qualities; diversity; ability to exercise sound judgment; existing time commitments; years to retirement age; and independence. They also consider ethical standards. While the Company does not have a formal policy regarding diversity, gender and ethnic diversity is an essential factor considered by the Board and the Governance and Nominating Committee when selecting director nominees. The Board and the Governance and Nominating Committee recognize the importance of a Board representing diverse knowledge and experiences and 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.

Board Assessment and Director Peer Review Process

The Board recognizes that a robust evaluation and assessment process is an essential component of strong corporate governance practices and promoting Board effectiveness. The Governance and Nominating Committee oversees an annual assessment process of our director nominees. Our Board Governance Guidelines provide that, at a minimum, such assessment will address the overall effectiveness, achievement of mission, discharge of responsibilities, structure, meetings, processes, relationships with management and Board and committee development. Such assessment process also includes the following steps:

 

     

The Governance and Nominating Committee reviews the format of the Board assessment and director peer review process as necessary to help ensure that the solicited feedback remains relevant and appropriate.

 

     

Each director completes an annual self-assessment of the Board and the committees on which he or she serves. These self-assessments are designed to help assess the skills, qualifications, and experience represented on the Board and its committees, and to determine whether the Board and its committees are functioning effectively.

 

     

The results of this annual self-assessment are discussed by the full Board and each committee, as applicable, and changes to the Board’s and its committees’ practices are implemented as appropriate.

 

     

The Lead Independent Director also conducts a confidential director peer review process. As part of this process, the Lead Independent Director speaks with each other director individually to obtain insights regarding the contributions of other directors (and the Chairman of the Board may speak with each other director regarding the contributions of the Lead Independent Director), and to discuss issues in greater depth and obtain more targeted feedback with respect to Board, committee and individual director effectiveness.

With respect to Mr. Brown, the Compensation and Leadership Committee also conducts an annual review of his performance as CEO, as described in our Board Governance Guidelines and the charter of the Compensation and Leadership Committee.

 

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Board Refreshment

The Board believes that a degree of Board refreshment is important to ensure that Board composition is aligned with the changing needs of the Company and the Board, and that fresh viewpoints and perspectives are regularly considered. The Board also believes that directors develop an understanding of the Company and an ability to work effectively as a group over time that provides significant value, and therefore a significant degree of continuity year-over-year should be expected. Our current director nominee tenure as of April 1, 2021 is as follows:

 

   
DIRECTOR NOMINEE TENURE DIVERSITY  

BOARD REFRESHMENT

 

   
LOGO         

+5

 

Directors

added

   

-5

 

Directors

retired

 
 

over the last 6 years

 

   

As part of planning for director succession, the Governance and Nominating Committee periodically engages in the consideration of potential director candidates, occasionally with the assistance of Russell Reynolds or another third-party advisor.

The Board does not have absolute limits on the length of time that a director may serve, but considers the tenure of directors as one of several factors in re-nomination decisions. As set forth in our Board Governance Guidelines, the Board requires that a director must offer to resign if a significant change in personal circumstances, including job responsibilities, occurs and has established a retirement age of 75 for non-executive directors. Directors who are members of management will retire from the Board upon retirement from the Company. The CEO may remain on the Board after retirement from the Company with the approval of the Board. There are no additional exemptions or conditions to this retirement policy other than what is set forth in our Board Governance Guidelines.

While the Board believes that refreshment is an important consideration in assessing Board composition, it also believes the best interests of the Company are served by being able to take advantage of all available talent. Therefore, the Board does not make determinations with regard to its membership based solely on age or tenure.

Agreement with Silver Lake

On September 5, 2019, in connection with the Company’s continuing relationship with Silver Lake and the Company’s repurchase and settlement of the outstanding principal amount of 2.00% senior convertible notes due 2020 issued to Silver Lake, the Company entered into an investment agreement with affiliates of Silver Lake (the “New Investment Agreement”), pursuant to which the Company issued to Silver Lake $1 billion aggregate principal amount of 1.75% senior convertible notes due 2024. The New Investment Agreement provides that Silver Lake will, subject to certain conditions, continue to have rights to representation on the Board and requires that, for so long as Silver Lake has rights to nominate a director to the Board, the Company will include a Silver Lake designee on its slate of nominees for election to the Board at each of the Company’s meetings of shareholders in which directors are to be elected and to use its reasonable efforts to cause the election of such person. For further information regarding the New Investment Agreement, including a description of certain obligations and restrictions binding on the parties, as well as a copy of such New Investment Agreement, please refer to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on September 5, 2019, and see Note 5 Debt and Credit Facilities of our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.

HOW OUR BOARD GOVERNS THE COMPANY

We believe that the governance tone of a company is set at the top. The Board has:

 

     

Responsibility for overseeing management and providing strategic guidance

 

     

A belief in the steady refreshment of the Board to bring new and diverse perspectives

 

     

A belief in the importance of staying well informed

 

     

A willingness to manage risks, seize opportunities and embrace leadership

 

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Board Governance Practices and Principles

We adhere to a number of good board governance practices and principles:

 

     

Governance and Nominating Committee oversight of ESG matters

 

     

6 of our 7 members are independent, including all committee members

 

     

A Lead Independent Director

 

     

Regular executive session meetings of independent directors

 

     

Annual director self-assessment process

 

     

Regular risk assessment processes

 

     

Board Governance Guidelines and Principles of Conduct

 

     

Director Independence Guidelines

Corporate Governance Practices and Principles

We maintain a strong foundation of corporate governance practices and principles:

 

     

Implemented proxy access Bylaw amendment in August 2020 (for additional information, see “Adoption of Proxy Access Bylaw” on page 19 of this Proxy Statement)

 

     

Annual election of directors

 

     

No super majority voting provisions in our organizational documents

 

     

No “poison pill”

 

     

Majority voting standard in uncontested director elections

 

     

20% threshold for shareholder right to call special meeting

 

     

Shareholder right to act by written consent

 

     

Succession planning (for additional information, see “Human Capital Management and Succession Planning” on page 19 of this Proxy Statement)

 

     

Proactive shareholder engagement (for additional information, see “Shareholder Engagement” on page 21 of this Proxy Statement)

Compensation Governance Practices and Principles

We maintain a robust compensation governance framework:

 

     

Pay-for-performance and at-risk compensation

 

     

A significant portion of our targeted annual compensation is performance-based and/or subject to forfeiture (“at-risk”), with emphasis on variable pay to reward short- and long-term performance measured against pre-established objectives informed by our Company’s strategy. For 2020, performance-based compensation comprised approximately 93% of the targeted annual compensation for our CEO and, on average, approximately 82% of the targeted annual compensation for our other NEOs.

 

     

Compensation aligned with shareholder interests

 

     

Performance measures for incentive compensation are linked to the overall performance of the Company and are designed to be aligned with the creation of long-term shareholder value.

 

     

Emphasis on future pay opportunity vs. current pay

 

     

Our long-term incentive awards are equity-based, use multi-year vesting provisions to encourage retention, and are designed to align our NEOs’ interests with long-term shareholder interests. For 2020, long-term equity compensation comprised approximately 80% of the targeted annual compensation for our CEO and, on average, approximately 65% of the targeted annual compensation for the other NEOs.

 

     

Retention of independent compensation consultant

 

     

Annual “say on pay” vote

 

     

No excise tax gross-up provisions

 

     

A recoupment “clawback” policy for compensation paid to certain officers

 

     

Robust stock ownership guidelines for directors and officers

 

     

An anti-hedging policy

 

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“Double trigger” severance benefits in the event of a change in control

 

     

No repricing of options without shareholder approval

 

     

No excessive perquisites

Governance of Risks and Corporate Controls

We maintain comprehensive governance of risks and corporate controls:

 

     

Code of Business Conduct

 

     

Supplier Code of Conduct and regular supplier audits

 

     

Annual training programs for employees addressing information security, intellectual property protection and data protection and privacy

 

     

Anti-Human Trafficking Compliance Plan

 

     

Robust oversight of risk (for additional information, see “Risk Oversight” on page 19 of this Proxy Statement)

We encourage you to visit investors.motorolasolutions.com/corporate-governance/GovDocs to obtain more information and view our governance documents, including our Code of Business Conduct and our Board Governance Guidelines, which are publicly available on such website. The information contained on or accessible through our corporate website is not incorporated by reference into and is not a part of this Proxy Statement. Amendments to these governance documents, or waivers applicable to our directors, executive officers or corporate controller from certain provisions of our ethical policies and ethical standards for directors and employees, will be posted on our website within four business days following the date of the amendment or waiver. There were no waivers in 2020.

Adoption of Proxy Access Bylaw

In August 2020, the Board adopted, through an amendment and restatement to our Bylaws, the ability of an eligible shareholder, or a group of up to 20 eligible shareholders, owning at least three percent of the Company’s outstanding shares of Common Stock continuously for at least three years, to nominate and include in the Company’s proxy materials director nominees constituting up to the greater of two nominees or 20% of the number of directors on the Board that the common shareholders are entitled to elect, provided that the shareholders and the nominees satisfy the requirements in our Bylaws.

Human Capital Management and Succession Planning

The Board believes that human capital management and succession planning, including diversity, equity and inclusion initiatives, are critical to the Company’s success. Our Board’s involvement in leadership development and succession planning is ongoing throughout the year, and the Board provides input on important decisions in each of these areas. The Board has primary responsibility for succession planning for the CEO and oversight of other senior management positions. The Compensation and Leadership Committee oversees the development of the process and will periodically report to the Board on succession planning, as described in our Board Governance Guidelines. The entire Board will work with the Compensation and Leadership Committee, or a special committee designated by the Board, to nominate and evaluate potential successors to the CEO. In 2020, the Board reviewed short and long-term succession plans for the CEO and other members of management who are part of our Executive Committee. When assessing possible CEO candidates, the Board identified skills and behavioral characteristics it considers 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. The Compensation and Leadership Committee is also regularly updated on key talent indicators for the overall workforce, including recruiting and attrition, diversity, equity and inclusion, and development programs.

Risk Oversight

Our approach to enterprise risk management is designed to effectively identify, assess, prioritize, mitigate, and monitor the Company’s principal risks. Management is responsible for the Company’s day-to-day risk management activities. The Board’s role is to exercise informed risk oversight, which is done both directly and indirectly through its committees. 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 shareholders 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, ESG, cyber-related (including cybersecurity, information security and data privacy), operational, strategic and regulatory and compliance risks. Each of the Board committee’s 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, the Audit Committee’s review of financial, cyber-related, regulatory and compliance risks and the Governance and Nominating Committee’s review of ESG-related risks.

 

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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 and presentations. 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, providing management and the Audit Committee with an overarching and objective view of the risk management activities of the Company. Audit services identifies and conducts engagements utilizing an enterprise risk management model, with the engagements spanning financial, operational, strategic and compliance risks. The engagement results assist management in maintaining acceptable risk levels. The director of audit services reports directly to the Audit Committee as well as the Chief Financial Officer and meets regularly with the Audit Committee and its chairperson, including in executive session.

Additional detail regarding the manners in which the Board and its committees undertake their risk oversight responsibilities, include the following:

Board

 

     

Receives updates on our business operations, financial results, and long-range plan at its regularly-scheduled meetings

 

     

Monitors overall culture and risk management environment

 

     

Receives periodic (at least annual) updates from management regarding top-identified enterprise risks

 

     

Receives annual report on political contributions made by the Company and MSIPAC, a voluntary employee-funded political action committee

Audit Committee

 

     

Reviews and considers our annual audit risk assessment, which identifies risks related to our internal control over financial reporting and informs our internal and external audit plans

 

     

Monitors independence of our external auditor

 

     

Reviews our annual audited financial statements and quarterly financial statements with management and our external auditor

 

     

Reviews risks related to regulatory and compliance matters

 

     

Reviews the use and consistent presentation of non-GAAP measures in our earnings releases and SEC filings

 

     

Considers the impact of risk on our financial position and the adequacy of our risk-related internal controls

 

     

Receives annual enterprise risk management report

 

     

Receives quarterly cybersecurity and information security report, as well as annual report which includes a review of potential digital threats and vulnerabilities and our cybersecurity, information security and data privacy framework designed to protect intellectual property, confidentiality, data integrity, and availability of critical assets and information

 

     

Receives quarterly report on litigation and compliance trends and an annual update on regulatory developments

Compensation and Leadership Committee

 

     

Assesses, on an annual basis, whether our compensation plans, policies, and practices encourage excessive or inappropriate risk taking by employees

 

     

Reviews risks related to talent acquisition, retention and development, as well as management succession

 

     

Monitors progress toward internal diversity, equity and inclusion goals

Governance and Nominating Committee

 

     

Conducts an annual review of our corporate governance policies and practices

 

     

Receives updates on emerging corporate governance issues and trends

 

     

Oversees annual self-assessment process for the Board and each of its committees, which includes soliciting directors’ views on our strategy and enterprise risks

 

     

Monitors and reviews our ESG strategy, initiatives and policies

 

     

Reviews quarterly expenditures for Company and MSIPAC political contributions, lobbying, and industry association memberships

 

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Shareholder Engagement

We recognize the value of listening to and considering the perspectives of our shareholders on corporate governance, compensation, and sustainability. Developing relationships with our shareholders is an integral part of that process and we routinely engage with, and collect feedback from, our shareholders on a variety of topics. In 2020, we held discussions with a diverse cross-section of our shareholders. Specifically, during the spring of 2020, we contacted our top 25 shareholders to collect feedback, and in the fall and winter of 2020, we offered to engage again with such top 25 shareholders. Such top 25 shareholders own approximately 54% of our outstanding stock. These discussions covered various governance, compensation, operational, financial performance, and industry matters, as well as our corporate social responsibility initiatives. Recent examples of enhancements to our practices that have reflected feedback from our shareholders include adopting a proxy access provision in our Bylaws, further external promotion of our leadership development and diversity, equity and inclusion programs, reinforcement of our pay-for-performance philosophy through the enhanced design of our incentive compensation programs, and emphasis of our commitment to high standards and ethics and accountability when participating in the political process through additional public disclosure of our controls, procedures, and oversight efforts. The additional disclosure of such controls, procedures, and oversight efforts may be found on our website at https://www.motorolasolutions.com/en_us/about/company-overview/corporate-responsibility/political-contributions.html.

We are continuing our program of active shareholder engagement during fiscal 2021, including participation at industry and investment community conferences, analyst meetings, and select one-on-one meetings with shareholders.

In addition to direct engagement, we have instituted a number of complementary mechanisms that allow shareholders to effectively communicate with the Board and management, including the policy regarding direct correspondence with individual directors and the Board as a whole described in the section entitled “How You Can Communicate with our Board” on page 24 of this Proxy Statement, a commitment to thoughtfully consider shareholder proposals submitted to the Company, an annual advisory vote to approve executive compensation, and attendance at our annual shareholder meetings. Our investor relations website (at investors.motorolasolutions.com) features substantive information and materials for the reference of our shareholders, including earnings and conference presentations, corporate governance documents, public filings, and news releases.

OUR BOARD’S LEADERSHIP STRUCTURE

At the annual meeting of the Board 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 meetings of the Board held in 2012 through 2020. 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. Additionally, this structure with a combined Chairman and CEO and Lead Independent Director has, as evidenced by the feedback of directors over the years, provided for a highly conducive atmosphere for directors to exercise their responsibilities and fiduciary duties, and to enjoy adequate opportunities to thoroughly deliberate matters before the Board and to make informed and independent decisions.

Our Lead Independent Director, currently Mr. Denman, presides at all meetings of the Board at which the Chairman is not present, including the executive sessions of the Board; advises on Board meeting agendas, materials and schedules and assesses the quality, quantity and timeliness of the information provided to the Board by management to assist the Board in performing its oversight duties; acts as a liaison between our independent directors and the Chairman and management by, among other things, regularly consulting with the independent directors who serve as committee chairs and making recommendations to the Company when requested by the Chairman of the Board; assists the Chairman in performing Board responsibilities as requested; and leads the confidential director peer review process and the annual assessment of our CEO, as described above on page 16 of this Proxy Statement under “Board Assessment and Director Peer Review Process.”. If elected at the Annual Meeting of Shareholders, Mr. Denman will continue to serve as our Lead Independent Director.

 

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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 investors.motorolasolutions.com/corporate-governance/GovDocs. Committee membership as of December 31, 2020 (except as otherwise noted), the number of meetings of each committee during 2020, the key responsibilities of each committee and independence information are described below:

 

 

 

    AUDIT COMMITTEE              

 

   

 

Key Responsibilities

 

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

 

    2020 Meetings: 8

 

 

    Judy C. Lewent (Chair)

    Clayton M. Jones

    Gregory K. Mondre

   

 

   Engage the independent registered public accounting firm.

 

   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 as specified in the Company’s Code of Business Conduct.

 

   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.

 

   Review significant risk exposure as it relates to the Audit Committee’s areas of responsibilities, including cyber-related, financial and regulatory and compliance risk.

 

   Review the Company’s quarterly and annual SEC filings and quarterly earnings releases.

 

Financial Expertise, Independence, and Financial Literacy

 

The Board has determined that each member of the Audit Committee qualifies as an independent director under the corporate governance standards of the NYSE, our Director Independence Guidelines and the additional Audit Committee independence requirements under the rules of the SEC. The Board has also determined that each member of the Audit Committee qualifies as an “audit committee financial expert,” as defined by SEC rules. All members of the Audit Committee are familiar with finance and accounting practices and principles and are financially literate.

 

 

 

    COMPENSATION AND

    LEADERSHIP COMMITTEE*

 

 

Key Responsibilities

 

   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, equity and inclusion 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.

 

 

    2020 Meetings 5

 

    Joseph M. Tucci (Chair)

    Kenneth D. Denman

    Egon P. Durban

 

 

 

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

 

   Review significant risk exposure as it relates to the Compensation and Leadership Committee’s areas of responsibilities, including compensation risk.

 

Independence

 

The Board has determined that each member of the Compensation and Leadership Committee during 2020 (including former director Ms. Pramaggiore while she served on such committee) qualifies as an independent director under the corporate governance standards of the NYSE and our Director Independence Guidelines. The Board has also determined that each member of the Compensation and Leadership Committee during 2020 (including former director Ms. Pramaggiore while she served on such committee) is a “non-employee director” for purposes of Section 16 of the Exchange Act.

 

      *   Anne Pramaggiore served as a member of the Compensation and Leadership Committee and Executive Committee until her resignation on July 24, 2020.

 

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    GOVERNANCE AND              

    NOMINATING

    COMMITTEE

 

   

 

Key Responsibilities

 

   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.

 

   Oversee the governance of the Board and compensation of non-employee members of the Board.

 

 

    2020 Meetings: 5

 

 

 

    Kenneth D. Denman (Chair)

    Gregory K. Mondre

    Joseph M. Tucci

 

 
       

   Review the Company’s ESG strategy, initiatives and policies.

 

   Review significant risk exposure as it relates to the Governance and Nominating Committee’s areas of responsibilities, including ESG risk.

 

Independence

The Board has determined that each member of the Governance and Nominating Committee qualifies as an independent director under the corporate governance standards of the NYSE and our Director Independence Guidelines.

 

 

    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.

 

 

    2020 Meetings: 0

 

 

 

    Gregory Q. Brown (Chair)

    Kenneth D. Denman

    (Lead Independent Director)

    Judy C. Lewent

    Joseph M. Tucci

 

 

Attendance at Board Meetings

The Board held six meetings during 2020. During 2020, all directors attended 100% of the aggregate number of meetings of the Board and the committees of the Board on which they served for the period during which they served. At the Board meetings, independent directors of the Company meet regularly in executive session led by Mr. Denman, the Lead Independent Director, and without management as required by the Board Governance Guidelines and NYSE listing standards. Generally, executive sessions are held in conjunction with regularly-scheduled meetings of the Board. In 2020, the non-employee independent members of the Board met in executive session five times. In addition, Board members are expected to attend the annual meeting of shareholders (virtually or in person, depending on the meeting format) as provided in the Board Governance Guidelines. All of the directors who stood for election at the 2020 Annual Meeting of Shareholders attended that meeting.

INDEPENDENCE

On March 8, 2021, 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 current non-employee directors, Mr. Denman, Mr. Durban, Mr. Jones, Ms. Lewent, Mr. Mondre, Mr. Tucci, and former non-employee director Ms. Pramaggiore, were independent during the periods in 2020 and 2021 that they were members of the Board. Mr. Brown does not qualify as an independent director because he is an executive officer of the Company. See “Motorola Solutions’ Relationship with Entities Associated with Independent Directors” below 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 period of four years when assessing independence in connection with a director’s (i) status as an employee of the Company, (ii) direct compensation from the Company 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 investors.motorolasolutions.com/corporate-governance/GovDocs.

 

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Motorola Solutions’ Relationship with Entities Associated with Independent Directors

When assessing independence, Ms. Pramaggiore had a relationship with an entity that was reviewed by the Board under independence standards covering contributions or payments to charitable or similar not-for-profit organizations. In addition, each of Mr. Denman, Mr. Durban, Mr. Jones, Ms. Lewent, Mr. Mondre, Ms. Pramaggiore, and Mr. Tucci 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.

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, the Code of Business Conduct for employees and our other internal procedures.

For purposes of the RPT Policy, a Related Person is defined to include 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 families. 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, such as the purpose of, and the potential benefits to the Company of, the Transaction; the extent of the Related Person’s interest in the Transaction; whether the Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; whether the Transaction would impair the independence of the director; and whether the Transaction would present an improper conflict of interest for any of our directors, director nominees or executive officers, taking into account the size of the Transaction, the overall financial position of the applicable Related Person, the direct or indirect nature of the applicable Related Person’s interest in the Transaction and the ongoing nature of any proposed relationship.

Motorola Solutions had no related person transactions requiring approval or ratification under the RPT Policy since January 1, 2020.

HOW YOU CAN COMMUNICATE WITH OUR BOARD

All interested parties, including our shareholders, who wish to communicate with the Board of Directors as a whole, any individual director (including the Chairman or the Lead Independent Director), or the non-management directors as a group, may send written correspondence addressed to the attention of 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.

HOW WE DETERMINE 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.

 

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HOW OUR DIRECTORS ARE COMPENSATED

Non-employee director compensation on an annual basis is as follows:

 

 

 

Cash Compensation

 

  

 

 

Annual Compensation (paid quarterly)

 

   

Annual Cash Retainer

  

$100,000

   

Lead Independent Director Fee

  

  $40,000

   

Audit Committee Chairperson Fee

  

  $25,000

   

Compensation and Leadership

Committee Chairperson Fee

  

  $20,000

   

Governance and Nominating

Committee Chairperson Fee

  

  $15,000

   

Audit Committee Member Fee

  

  $10,000

 

 

Equity Compensation

 

 

  

 

 

Annual Compensation (paid annually)

 

 

   

Annual Equity Grant

  

$190,000

During 2020, 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.

As disclosed in the “Proxy Statement Summary” section of this Proxy Statement beginning on page 1, in response to the COVID-19 pandemic we have taken actions in a number of areas to reduce our operating expenses, including with respect to our director compensation program. Specifically, as a result of the COVID-19 pandemic’s impact on the financial results of the Company in 2020, from June 1, 2020 through October 31, 2020, our directors elected to forego approximately 33% of their cash retainer and committee fees.

On May 11, 2020, each non-employee director received his or her annual equity award in the form of a DSU award of 1,460 shares of Common Stock. The number of DSUs awarded was determined by dividing $190,000 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 after the annual grant of DSUs, the award will be prorated based on the number of full months to be served until the next annual meeting of shareholders ($15,833.33 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 2020, received no additional compensation for serving on the Board.

 

Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement   25


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The following table further summarizes compensation paid to the non-employee directors during 2020.

 

Name

(a)

 

 

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

 

   

Stock
Awards ($)
(2)(3)

(c)

 

   

 

All Other

Compensation ($)(4)
(g)

 

 

Total ($)
(h)

 

 
       

 Kenneth D. Denman

 

 

132,779    

 

 

 

190,004    

 

 

157

 

 

322,940

 

 Egon P. Durban

 

 

0    

 

 

 

279,310    

 

 

157

 

 

279,467

 

 Clayton M. Jones

 

 

97,777    

 

 

 

190,004    

 

 

157

 

 

287,938

 

       

 Judy C. Lewent

 

 

111,110    

 

 

 

190,004    

 

 

157

 

 

301,271

 

       

 Gregory K. Mondre

 

 

0    

 

 

 

288,144    

 

 

157

 

 

288,301

 

       

 Joseph M. Tucci

 

 

100,001    

 

 

 

190,004    

 

 

157

 

 

290,162

 

       

 Former Director:

       
       

 Anne R. Pramaggiore(5)

 

 

38,334    

 

 

 

220,259    

 

 

91

 

 

258,684

 

 

(1)

During 2020, 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.

(2)

The non-employee directors received an annual grant of DSUs on May 11, 2020. With respect to the annual grant of equity, Messrs. Denman, Durban, Jones, Mondre, Tucci 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, including quarterly fees elected to be received in equity, and the fair value on each date of grant are as follows:

 

    

 

March 27

 

   

 

May 11

 

   

 

June 26

 

   

 

September 25

 

   

 

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 D. Denman

          1,460                            

 Fair Value

            $190,004                                  

 Egon P. Durban

    186       1,460               181       109       131  

 Fair Value

    $25,123       $190,004               $25,119       $16,786       $22,278  

 Clayton M. Jones

          1,460                            

 Fair Value

            $190,004                                  

 Judy C. Lewent

          1,460                            

 Fair Value

            $190,004                                  

 Gregory K. Mondre

    204       1,460               199       120       144  

 Fair Value

    $27,554       $190,004               $27,617       $18,480       $24,489  

 Anne R. Pramaggiore

    112       1,460               109              

 Fair Value

    $15,128       $190,004               $15,127                

 Joseph M. Tucci

          1,460                            

 Fair Value

            $190,004                                  

 

(3)

The aggregate number of Motorola Solutions DSU awards outstanding at December 31, 2020 includes accrued dividend equivalents or shares, and is shown below:

 

  Directors       Deferred Stock Units    

  Kenneth D. Denman

 

  2,831

  Egon P. Durban

 

16,334

  Clayton M. Jones

 

11,835

  Judy C. Lewent

 

  5,858

  Gregory K. Mondre

 

16,608

  Joseph M. Tucci

 

  7,090

  Former Director:

   

  Anne R. Pramaggiore *

 

22,929

 

  *

The total for Ms. Pramaggiore is as of her retirement from the Board on July 24, 2020.

 

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(4)

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, 2020 were approximately $1,033.

(5)

Ms. Pramaggiore’s last day on the Board was July 24, 2020.

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. For the purposes of these guidelines, Common Stock includes DSUs. As of December 31, 2020, all non-employee directors were in compliance with the stock ownership guidelines.

 

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OUR COMPANY

 

WHO WE ARE

Organization of our Business

As a global leader in mission critical communications and analytics, we manage our business across three major technologies: LMR Mission Critical Communications, Command Center Software and Video Security and Analytics. We have invested across these three technologies, evolving our land mobile radio focus to purposefully integrate software, video security and analytics solutions for public safety and enterprise customers globally. Our strategy is to generate value through the integration of each technology into our ecosystem, uniting voice, software, video and analytics to interoperate. While each technology individually strives to make users safer and more productive, we believe we can enable better outcomes between individuals, businesses and agencies united as one connected system. Our goal is to help remove silos between systems, unify data, streamline workflows, simplify management and support evolving technologies.

Examples of such interplay include sharing video feeds from a school to a police command center and officers’ devices in the field to improve situational awareness, uploading field reports or crime scene photos directly into an agency’s evidence system to save administration time, and connecting teams across networks to ensure messages are easily shared and teams can work as one. Our goal is to integrate technologies according to customers’ desired operational outcomes so they can work faster, smarter and more safely. Across all three technologies, we offer cloud-based solutions, cybersecurity services and managed and support services.

Our Corporate Values & Human Capital Management

At Motorola Solutions, we have a “people first” philosophy and are guided by our corporate values every day - inclusive, innovative, passionate, driven, accountable and partners. These corporate values are the fundamental beliefs that define us, guiding how we do business and the decisions we make. We are committed to a supportive, fair and equitable environment where employees feel they belong and are engaged, connected to our business and invested in the collective success of our customers and communities.

As our driving force, our approximately 18,000 employees are drawn from all segments of our global society to make a difference for our customers. We invest in their development and training at all levels, challenging them to develop and grow skills to imagine new opportunities that will keep making a difference to public and enterprise safety.

We are driving operational changes to continuously support and promote mutual objectives of both our employees and the company, enhancing our culture and impacting business results – from our hiring practices to how we interact with our customers and suppliers.

We believe our senior leadership team, whose biographies are presented below, has the experience necessary to effectively execute our strategy, maintain our corporate values and advance our technology leadership. Our Chief Executive Officer and senior management leaders have extensive industry experience and are supported by a talented management team, committed to running our business ethically, responsibly and as a good corporate citizen to the communities in which we live and serve.

 

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OUR LEADERSHIP TEAM

Our Chief Executive Officer’s team, the management Executive Committee, is comprised of the following six individuals:

 

 

MARK HACKER

 

  

 

Mr. Hacker is Executive Vice President, General Counsel and Chief Administrative Officer of Motorola Solutions. He leads the Company’s legal, government affairs and human resources teams. Mr. Hacker is a member of both the Illinois and Pennsylvania state bars, has been a certified public accountant, and is an adjunct professor at Northwestern University School of Law. Mr. Hacker serves as the President and is on the board of directors of the Motorola Solutions Foundation. Mr. Hacker is also on the board of directors of Business Executives for National Security, Skills for Chicagoland’s Future, St. Rita of Cascia High School in Chicago and the 100 Club of Illinois. He is also a member of the President’s Advisory Council of Villanova University.

 

Previous Experience

 

Senior Vice President and General Counsel, Motorola Solutions, overseeing legal, government affairs, global marketing, communications and the Motorola Solutions Foundation; Corporate Finance Associate, Buchanan Ingersoll & Rooney; Accountant, Arthur Andersen.

 

Education

 

Mr. Hacker earned a bachelor’s degree in accountancy from Villanova University and a law degree from Villanova University School of Law.

 

 

LOGO

 

 

Executive Vice President, General Counsel and Chief Administrative Officer

 

 

Joined Motorola

Solutions: 2001

Age: 49

    

  

 

 

KELLY MARK

 

  

 

Mr. Mark is Executive Vice President, Software and Services, for Motorola Solutions. He is responsible for the Company’s software and services business, which includes recurring revenue solutions in managed and support services, public safety and enterprise command center software solutions and unified communications applications. Mr. Mark is also the Company’s executive sponsor for FIRST Robotics, which provides students with hands-on experiences building robots as they learn skills in science, technology, engineering and math (STEM).

 

Previous Experience

 

Senior Vice President, Managed and Support Services, Motorola Solutions, overseeing services strategy, offer design and delivery worldwide.

 

Education

 

Mr. Mark earned a bachelor’s degree in business from the University of Illinois and a master’s degree in business administration from Harvard Business School.

 

 

LOGO

 

 

Executive Vice President, Software and Services

 

 

Joined Motorola

Solutions: 1999

Age: 49

 

 

 

JACK MOLLOY

 

  

 

Mr. Molloy is Executive Vice President, Products and Sales for Motorola Solutions. He leads the Company’s worldwide sales organization and product development of LMR Mission Critical Communications and Video Security and Analytics. Mr. Molloy serves on the Sales Benchmark Index Advisory Board.

 

Previous Experience

 

Executive Vice President, Worldwide Sales & Services, Motorola Solutions, overseeing global sales, systems integration and managed and support services.

 

Education

 

Mr. Molloy earned a bachelor’s degree in marketing from Northern Illinois University and a master’s degree in business administration from Loyola University.

 

 

LOGO

 

 

Executive Vice President, Products and Sales

 

 

Joined Motorola

Solutions: 1994

Age: 49

 

 

Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement   29


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 RAJAN NAIK

  

 

Dr. Naik is Senior Vice President, Strategy and Ventures, for Motorola Solutions. He is responsible for the corporate strategy organization, chief technology office, venture capital portfolio and competitive and market intelligence. Dr. Naik serves on the board of directors for CSG Systems International.

 

Previous Experience

 

Senior Vice President and Chief Strategy Officer, Advanced Micro Devices; Partner, Technology/Media/Telecom, McKinsey & Company.

 

Education

 

Dr. Naik earned a bachelor’s degree in engineering from Cornell University and a doctorate in engineering from the Massachusetts Institute of Technology.

 

LOGO

 

 

Senior Vice President, Strategy and Ventures

 

 

Joined Motorola

Solutions: 2015

Age: 49

 

 

JASON WINKLER

 

  

 

Mr. Winkler is Executive Vice President and Chief Financial Officer for Motorola Solutions, a role in which he has served since July 1, 2020. He is responsible for the Company’s financial strategy and leads all financial functions as well as supply chain operations and procurement. Mr. Winkler is a member of the executive board of the Chicago Police Memorial Foundation.

 

Previous Experience

 

Senior Vice President, Finance; Corporate Vice President, Finance, Global Sales & Services; and Vice President and Director, North America, each for Motorola Solutions. Since joining the Company in 2001, Mr. Winkler has held a number of financial leadership positions supporting investor relations, global channel management, mergers and acquisitions and product operations.

 

Education

 

Mr. Winkler earned a bachelor’s degree in business administration from Valparaiso University and a master’s degree in business administration from the University of Chicago’s Booth School of Business.

LOGO

Executive Vice President and Chief Financial Officer

 

 

Joined Motorola

Solutions: 2001

Age: 47

 

 

 

CYNTHIA YAZDI

 

  

 

Ms. Yazdi is Senior Vice President, Chief of Staff, Marketing and Communications and Motorola Solutions Foundation. She is responsible for supporting the Chairman and CEO of Motorola Solutions and for worldwide marketing and communications for the Company, as well as the Motorola Solutions Foundation. Ms. Yazdi serves on the board of the American Red Cross of Chicago.

 

Previous Experience

 

Ms. Yazdi has held a variety of leadership positions in strategy and operations roles during her 20+ year career with the Company. Most recently, she led product and business operations for the Asia Pacific and Middle East regions.

 

Education

 

Ms. Yazdi earned a bachelor’s degree in civil engineering from Concordia University.

 

LOGO

 

 

Senior Vice President,

Chief of Staff, Marketing and Communications and Motorola Solutions Foundation

 

 

Joined Motorola

Solutions: 2000

Age: 56

 

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PROPOSAL NO. 2 — RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021

 

The Audit Committee of the Board has appointed PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021. PwC has acted in this capacity since its appointment for 2019, following a competitive proposal process that took place in 2018. We are asking our shareholders to ratify the appointment of PwC as our independent registered public accounting firm. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the appointment of PwC to our shareholders for ratification as a matter of good corporate governance.

Representatives of PwC are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so and will have the opportunity to respond to appropriate questions from shareholders. In the event shareholders do not ratify the appointment, the appointment will be reconsidered by the Audit Committee and the Board. Even if the appointment is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.

Services provided to the Company and its subsidiaries by PwC in fiscal years 2020 and 2019 are described under the section of the Proxy Statement on page 76 titled “Independent Registered Public Accounting Firm Fees.”

RECOMMENDATION OF THE BOARD AND THE AUDIT COMMITTEE

THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE UNANIMOUSLY RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021. UNLESS OTHERWISE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED FOR THE RATIFICATION OF PRICEWATERHOUSECOOPERS LLP.

 

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OUR PAY

 

 

PROPOSAL NO. 3 — ADVISORY APPROVAL OF THE COMPANY’S EXECUTIVE COMPENSATION

In accordance with Section 14A of the Securities Exchange Act of 1934 (“Exchange Act”), we are providing our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers 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 CD&A section of this Proxy Statement 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 CD&A:

 

     

We actively engage our shareholders 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 a “clawback” policy, anti-hedging, stock ownership guidelines and no excise tax gross-ups.

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

“Resolved, that the shareholders approve, on an advisory basis, the compensation of the named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including in the Compensation Discussion and Analysis, the compensation tables and other related disclosures in this Proxy Statement.”

RECOMMENDATION OF THE BOARD

THE BOARD OF DIRECTORS UNANIMOUSLY 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.

 

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COMPENSATION DISCUSSION AND ANALYSIS

 

   

Say on Pay Vote Results and Shareholder Engagement

 

    

 

34

 

 

 

Historical Say on Pay Results

     34  

2020 Shareholder Engagement

     34  

Board Responsiveness to Say on Pay Vote

 

    

 

34

 

 

 

   

Executive Summary

 

    

 

35

 

 

 

Named Executive Officers

     35  

Management Transition

     35  

Our Business

     35  

Company Performance

     35  

Paying for Performance

     36  

Evolution of Our CEO’s Pay Program

 

    

 

42

 

 

 

   

Process for Determining Executive Compensation

 

    

 

44

 

 

 

Compensation Philosophy

     44  

Sound Governance Practices

     45  

How We Plan Compensation

     45  

Performance-Based Compensation Structure

     46  

2020 Target Total Compensation Summary

 

    

 

46

 

 

 

   

2020 Annual Compensation Elements

 

    

 

47

 

 

 

Base Salary

     47  

Short-Term Incentives

     47  

Long-Term Incentives

 

    

 

48

 

 

 

   

Comparative Market Data

 

    

 

49

 

 

 

2020 Peer Group

     49  

Survey Market Data

 

    

 

50

 

 

 

   

Equity Usage Under Our Compensation Programs

 

    

 

50

 

 

 

Other Compensation Policies and Practices

 

    

 

51

 

 

 

Benefits and Perquisites

     51  

Stock Ownership Guidelines

     51  

Change in Control Policy

     52  

Recoupment of Incentive Compensation Awards Upon Restatement of Financial Results

     52  

Impact of Favorable Accounting and Tax Treatment of Compensation Program Design

     53  

Anti-Hedging Policy

 

    

 

53

 

 

 

 

Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement   33


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SAY ON PAY VOTE RESULTS AND SHAREHOLDER ENGAGEMENT

HISTORICAL SAY ON PAY RESULTS

The Compensation and Leadership Committee (the “Committee”) strives to ensure our executive compensation program aligns with the interests of our shareholders and adheres to our pay-for-performance philosophy. Our executive compensation program, in place since 2015, has historically received very strong shareholder support. After a low level of support in 2018, we took concrete steps to understand and respond to our shareholders’ concerns. Our shareholders appreciated the level of direct responsiveness, which resulted in approximately 92% shareholder support for each of our 2019 and 2020 say on pay (“SOP”) votes.

 

         

 

PROXY  

 

 

2016

 

 

2017

 

 

2018

 

 

2019

 

 

2020

         

SOP RESULT  

 

96.4%

 

95.6%

 

69.1%

 

92.3%

 

91.8%

2020 SHAREHOLDER ENGAGEMENT

Consistent with prior years, our shareholder engagement process in 2020 was comprehensive and continuous. Our efforts included monitoring trends, seeking input on pay practices and corporate governance, and engaging investors and shareholder groups on pay topics as well as our corporate social responsibility initiatives. We conduct targeted outreach efforts twice a year with our shareholders, institutional investors and proxy advisory firms.

Every year, our shareholders’ perspective is a critical input considered by the Committee for determining executive compensation. Even with a strong SOP result again in 2020, we continued our outreach efforts in 2020, which included:

 

     

Spring: followed up with our top 25 shareholders from early 2020 (approximately 54% ownership) to collect feedback

 

     

Fall/Winter: offered to engage with our top 25 shareholders (approximately 54% ownership) to hear their perspectives

Recent examples of enhancements to our governance practices that have reflected feedback from our shareholders include adopting a proxy access provision in our Bylaws, further external promotion of our leadership development and diversity, equity and inclusion programs, reinforcement of our pay-for-performance philosophy through the enhanced design of our incentive compensation programs, and emphasis of our commitment to high standards and ethics and accountability when participating in the political process through additional public disclosure of our controls, procedures, and oversight efforts.

BOARD RESPONSIVENESS TO SAY ON PAY VOTE

After our SOP vote in 2018, our shareholders provided consistent feedback on how to improve aspects of our CEO’s pay and specific incentive program features. Based on this feedback, we made several changes in 2018, which continue:

 

     

Eliminated cash from CEO long-term incentives by paying any active Long Range Incentive Plan (“LRIP”) cycles in stock and, beginning in 2019, denominating future LRIP cycles in the form of equity grants

 

     

Increased CEO stock ownership requirement from 6x to 10x base salary

 

     

Disclosed CEO goals and achievement level as it relates to pay decisions, and as reviewed by the Board

 

     

Removed the 25% cap on the Committee’s ability to reduce a payout under the LRIP and performance options (“POs”) when total shareholder return (“TSR”) is negative, thus providing the Committee with full discretion to decrease the payout

Overall, feedback from our shareholders has been positive, recognizing the significant level of Board responsiveness to shareholder views on compensation, the strength of our management team and their continued support of our performance-based programs.

 

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EXECUTIVE SUMMARY

NAMED EXECUTIVE OFFICERS

Our Compensation Discussion and Analysis (the “CD&A”) describes the Company’s executive compensation philosophy and programs, which are governed by the Committee. The CD&A includes 2020 total compensation for our Named Executive Officers (“NEOs”) who are listed below. Included in our NEOs for 2020 and whose compensation is described in this CD&A is Gino Bonanotte, our former Executive Vice President and Chief Financial Officer. Refer to “Management Transition” below for additional information.

 

LOGO     

GREGORY Q. BROWN

 

Chairman and Chief Executive Officer

  LOGO     

MARK S. HACKER

 

Executive Vice President, General Counsel and Chief Administrative Officer

     
LOGO     

JASON J. WINKLER

 

Executive Vice President and Chief Financial Officer

  LOGO     

KELLY S. MARK

 

Executive Vice President, Software and Services

     
LOGO     

JOHN P. MOLLOY

 

Executive Vice President, Products and Sales

   

MANAGEMENT TRANSITION

On June 30, 2020, we announced that Gino A. Bonanotte, Executive Vice President and Chief Financial Officer, decided to step down from his position as Chief Financial Officer, effective immediately, and retire from the Company effective December 31, 2020. Mr. Bonanotte remained employed by the Company as Executive Vice President from July 1, 2020 until his retirement on December 31, 2020 to ensure a smooth transition. Also on June 30, 2020, we announced the appointment of Jason J. Winkler, our Senior Vice President, Finance, to succeed Mr. Bonanotte as Executive Vice President and Chief Financial Officer, effective July 1, 2020.

OUR BUSINESS

Motorola Solutions is a global leader in mission critical communications and analytics. Our technologies in Land Mobile Radio Mission Critical Communications (“LMR Mission Critical Communications”), Command Center Software, and Video Security and Analytics, bolstered by our managed and support services, make communities safer and help businesses stay productive and secure. We serve more than 100,000 public safety and commercial customers in over 100 countries and have a rich heritage of innovation focusing on advancing global safety for more than 90 years.

 

 

 

    KEY SOLUTIONS

 

       

 

 

 

LOGO

 

   

 

 

 

LOGO

 

   

 

 

 

LOGO

 

LMR Mission

Critical Communications

 

     

Command Center

Software

 

     

Video Security

and Analytics

 

 

$7.4 BILLION

   

 

18,000+ EMPLOYEES

   

 

6,100+ PATENTS

         in annual sales (2020)

 

     

in 60 countries

 

     

granted

 

$686 MILLION

    100,000+ CUSTOMERS    

13,000 NETWORKS

in R&D spending (2020)

 

   

in over 100 countries

 

   

installed across the globe

 

 

                                                 HEADQUARTERS

 

  

 

CHAIRMAN and CEO                             

 

 

                                                           500 West Monroe Street

                                                           Chicago, IL USA

 

  

 

Greg Brown                                   

 

We offer comprehensive solutions that help our customers work safely and efficiently. These solutions are designed to be “purpose-built” for the unique needs of our customers, which include customers in the government, public safety and commercial verticals.

COMPANY PERFORMANCE

In response to the COVID-19 pandemic in 2020, there have been a broad number of governmental and commercial actions taken to limit the spread of the virus, including social distancing measures, stay-at-home orders, travel restrictions, business shutdowns and slowdowns. These actions have resulted in a significant decline in global economic activity. We continue to abide by a number of measures in an effort to protect the health and well-being of our employees and customers, including having office workers work remotely, suspending employee travel,

 

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withdrawing from certain industry events, increasing the frequency of cleaning services, encouraging face coverings, and using thermal scanning. See the sections of this Proxy Statement titled “COVID-19 Impact on the Company and Response” on page 2 and “Company-Wide Financial Performance and Compensation Changes in 2020” on page 37 for additional information regarding our response to COVID-19. Even in this challenging environment, our TSR outperformed the S&P 500 over the past three years, 98% compared to 40%. Additionally, 2020 was another record year for our ending backlog.

 

LOGO

When making compensation decisions, the Committee considers specific accomplishments in 2020, as well as how those accomplishments position us to execute against our growth and expansion strategy.

PAYING FOR PERFORMANCE

CEO Framework

Annually, individual performance objectives for Mr. Brown are established collaboratively with the Board and progress is reviewed throughout the year. When determining Mr. Brown’s earned incentives and annual target compensation opportunities, the Board evaluates performance against four main categories:

 

     

Annual Financial Goals – revenue, earnings per share and dividends

 

     

Annual Operational/Non-Financial Goals – backlog, customer experience and key litigation

 

     

Long-Term Strategic Initiatives – expansion of product and service offerings, integrated solutions and acquisitions

 

     

People – organizational optimization, talent development and succession planning

Specific accomplishments considered for 2020 with respect to these categories are listed in the “CEO Individual Performance” section of this Proxy Statement on page 38.

In recognition of the dynamic and broad-based range of Mr. Brown’s responsibilities, we do not assign a specific weight to each category. The individual performance categories do, however, reflect the Committee’s perspective that both current year results, as well as the quality of the foundation laid for future growth, are equally worthy of consideration. Additionally, the Committee reviews the momentum of the business – multiple year trajectory of key metrics – when reviewing Mr. Brown’s performance. As a result, for example, the Committee looks at annual revenue and earnings growth as well as multi-year trends of these metrics, while also focusing on the Company’s execution of pivotal acquisitions and the attraction of critical talent to the Company’s growth areas.

Short-Term Incentive Plan Results

The Executive Officer Short Term Incentive Plan (“STIP”) provides annual cash incentives to executives based on a combination of objective Company-wide financial performance targets and unique individual executive performance goals. Given the broad range of strategic activities necessary to execute the major transformation of our business, the Company performance factor is multiplied by an Individual Performance Factor (“IPF”) to reward our executives for accomplishments beyond strong financial results. The IPF is based on the Committee’s subjective and thorough review of each NEO’s individual performance throughout the year.

 

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Company-Wide Financial Performance and Compensation Changes in 2020

In 2020, we were below our operating plan for non-GAAP Operating Earnings (“non-GAAP OE”) and Free Cash Flow, resulting in a Company performance factor of zero. Prior to the onset of the COVID-19 pandemic, performance targets were set to incent 13% improvement in non-GAAP OE and 7% improvement in Free Cash Flow.

 

             

  COMPANY

  PERFORMANCE

  MEASURE

    MINIMUM       TARGET       MAXIMUM      

2020    

RESULT    

 

COMPANY    

PERFORMANCE    

FACTOR    

 

MEASURE    

WEIGHT    

 

WEIGHTED    

RESULT    

             

  Non-GAAP OE1 (in millions)

  $2,003     $2,225       $2,448       $1,835       0.00      65%       0.00   
             

  Free Cash Flow2 (in millions)

  $1,521     $1,690       $1,944       $1,396       0.00      35%       0.00   
             

  TOTAL

              0.00   

 

1 

Non-GAAP OE is our reported GAAP Operating Earnings excluding share-based compensation expense, reorganization of business charges, intangibles amortization expenses, operating lease asset impairments, losses on legal settlements, and acquisition related transaction fees.

2 

Free Cash Flow is a non-GAAP financial measure and is defined as net cash provided by operating activities less capital expenditures.

Notwithstanding the performance in the STIP, the Committee approved discretionary cash bonuses payable to the CEO and the other NEOs for 2020. In addition, approximately 90% of our employees were eligible for Annual Incentive Plan bonuses. The Committee authorized management of the Company to pay a similar discretionary bonus to eligible employees.

As discussed above, the Company’s operations were negatively impacted by the COVID-19 pandemic in 2020, which reduced market demand for products (and therefore the Company’s revenue) and resulted in supply chain constraints. The Committee determined that the pandemic represented an extraordinary event outside of management’s control and that management had done an admirable job supporting key public safety and other essential customers during the year in a challenging environment. As the pandemic unfolded, management prioritized the protection of the health, safety and well-being of the Company’s employees by having the majority of its office workers work remotely, suspending employee travel, withdrawing from certain industry events, increasing the frequency of cleaning services, encouraging face coverings, and using thermal scanning. Management worked to protect the health, safety and well-being of the Company’s employees while continuing to lead the Company in servicing mission critical networks on-site for the Company’s customers in order to continue to provide seamless operations. In addition, the Company’s sales teams continued to improve virtual engagement with customers, and with our prioritization of research and development efforts, the Company’s engineering teams adapted the Company’s offerings to equip customers with the latest technology in an effort to protect their workplaces from the spread of COVID-19 and support essential customer workstreams. Although the Company’s revenue for fiscal 2020 decreased by 6% compared to fiscal 2019, management was able to grow the Software and Services segment revenue by 9% for the full year, sustain profitability levels comparable to the prior year through responsible cost management, achieve record backlog of $11.4 billion, and generate $1.6 billion in operating cash flow for the full year. In addition, management exceeded the financial outlook for the second half of the year provided to the investment community in July 2020.

In light of these factors and the Committee’s desire to recognize and reward management’s efforts during the pandemic, the Committee determined to award discretionary bonuses to the Company’s NEOs. Other factors that the Committee considered and that contributed to the Committee’s decision to apply its discretion to award such discretionary bonuses included each NEO’s significant individual contributions towards maintaining efficient operations in a highly uncertain and challenging environment, described more fully below, protecting the Company’s workforce, supporting key customers, and enabling essential workstreams to continue during the pandemic, along with the NEOs in office in May 2020 voluntarily agreeing to a temporary reduction of base salary, discussed below. Based on its assessment of the impact of the pandemic, the Committee determined that a discretionary bonus approximating 50% to 65% of the target amount under the 2020 STIP was reasonable and appropriate based on informed discretion. The Committee believes this approach is consistent with the Company’s pay-for-performance culture and fairly recognizes management’s successful efforts to mitigate the impacts of the COVID-19 pandemic on the Company’s business and efforts to position the Company for a strong recovery and future growth.

In addition, we implemented certain other compensation changes with respect to our NEOs in 2020. In response to the Company’s financial performance during the COVID-19 pandemic, for the period from May 3, 2020 through November 1, 2020, with respect to Mr. Brown, and the period from June 1, 2020 through November 1, 2020 for our other NEOs except Mr. Winkler, our NEOs received reduced base salaries in amounts equal to a 50% reduction for Mr. Brown and a 15% reduction for our other NEOs. In addition, in March 2020, Mr. Hacker was awarded a cash award in the amount of $500,000 and a restricted stock unit (“RSU”) award in the amount of $500,000 to recognize his leadership in certain critical litigation efforts. For more information regarding each of these matters, see the 2020 Summary Compensation Table on page 55 of this Proxy Statement.

 

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CEO Individual Performance

In evaluating the amount of the discretionary cash bonus for Mr. Brown described above, the Committee evaluated key qualitative and quantitative objectives important to the execution of annual contributions to our long-term strategies, Mr. Brown’s individual accomplishments and his role in supporting the accomplishments of his leadership team, for which he is accountable. Highlights from his accomplishments in each category are provided in the table below.

 

  2020 ACCOMPLISHMENT HIGHLIGHTS

ANNUAL FINANCIAL GOALS

 

 

   Exceeded revised financial outlook provided in July 2020 following COVID-19 pandemic impact

 

   Achieved profitability levels comparable to prior year by mitigating COVID-19 pandemic-related sales decline while increasing research and development (“R&D”) investment

 

   Achieved Software and Services revenue growth every quarter year-over-year

 

   Achieved Software and Services revenue growth of 9% to $2.8 billion for the full year, resulting in the segment generating 37% of Company revenue and over 50% of non-GAAP OE

 

   Expanded Software and Services non-GAAP OE by 290 basis points

 

   Achieved Video Security and Analytics revenue growth of 31% to $927 million

 

   Achieved $1.6 billion in operating cash flow, representing 120% of non-GAAP OE

 

ANNUAL OPERATIONAL/NON-FINANCIAL GOALS

 

 

   Backlog increased 2% to $11.4 billion, another Company record following a record in 2019

 

   Won critical litigation against China-based Hytera for trade secret misappropriation and copyright infringement

 

   Increased patent portfolio by 500 to 6,100 granted patents

 

   Refinanced $900 million 10-year debt issuance at 2.3%

 

   Reduced real estate footprint by 15% or 620,000 square feet

 

LONG-TERM STRATEGIC INITIATIVES

 

 

   Closed five acquisitions strengthening our LMR Mission Critical Communications, Command Center Software and Video Security and Analytics solutions

 

   Launched award-winning next generation APX NEXT for the international and fire markets

 

   Launched next generation TETRA device with adaptive mission critical audio and smartphone app for collaboration

 

   Launched LMR cloud services for remote operations as well as enhanced disaster resiliency of mission critical networks

 

   Launched PremierOne Cloud Suite, transforming and streamlining the workflow and operations for computer-aided dispatch (CAD), mobile field response and records management

 

   Launched COVID-19 specific applications with analytics for contact tracing, occupancy counting, face mask detection and elevated body temperature detection to support the pandemic response

 

   Launched Safety Reimagined, unifying voice, data, video and analytics as one integrated platform to serve public safety and enterprise customers globally

 

   Won largest Command Center Software order in our history

 

   Won largest video security contract in the history of the Avigilon business

 

   Won 14 product design awards

 

   Successfully transitioned our trade, customer and product demos to virtual

 

 

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  2020 ACCOMPLISHMENT HIGHLIGHTS

PEOPLE

 

 

   Seamlessly executed CFO succession plan

 

   Provided infrastructure and support to enable our employees to work from home beginning in March 2020

 

   Enabled IT support for 11,000 video calls per day versus 1,000 per day pre-COVID-19 pandemic

 

   Hired 2,100 new employees and acquired 800 new employees

 

   Hired a Chief Diversity Officer

 

   Established and expanded partnerships with Historically Black Colleges and Universities, Society of Women Engineers and National Society of Black Engineers

 

   Conducted company-wide diversity, equity and inclusion (“DEI”) assessment involving more than 4,000 employees

 

   Appointed seven new diverse Vice Presidents, increasing U.S. Vice President diversity to 38% versus 33% in 2019

 

   Conducted successful virtual internship program

 

   Earned several recognitions including World’s Most Admired Companies (Fortune), 100 Most Sustainable Companies (Barron’s), 100 Best Workplaces for Innovators (Fast Company), America’s Best Employers for Diversity (Forbes), Top 100 Most Sustainably Managed Companies in the World (WSJ), Most Responsible Companies (Newsweek), Best Places to Work in IT (Computerworld) and Top Tech Employers in Chicago (Crain’s)

 

Other NEO Individual Performance

Other NEO individual performance objectives coalesce with Mr. Brown’s objectives, as set by the Board. Mr. Brown evaluated the other NEOs’ individual performance based primarily, but not exclusively, on the same categories in the CEO framework. The below table includes highlights each NEO’s many accomplishments that contributed to the Company’s success in 2020. For the purposes of this table, accomplishments have been ascribed to a specific category, though many of them impact multiple categories.

 

 

 
  ANNUAL FINANCIAL AND
OPERATIONAL GOALS
  LONG-TERM STRATEGIC INITIATIVES   PEOPLE
  WINKLER  

 

  Mitigated COVID-19 pandemic-related sales declines to achieve non-GAAP OE as percent of sales comparable to 2019

 

  Generated operating cash flow of $1.6 billion, including improvement of working capital, representing 120% of non-GAAP OE

 

  Increased Software and Services, a proxy for recurring revenue, to 37%

 

  Refinanced approximately $900 million of debt at a record low rate, lowering interest expense and extending weighted average maturity by 8+ years

 

  Achieved $43 million of savings through effective cash tax planning

 

  Developed and implemented enhanced revenue disaggregation disclosure in our Annual Report on Form 10-K for the year ended December 31, 2020 for our three major technologies

 

  Completed transition to new audit firm

 

 

  Optimized supply chain footprint with consolidation of North America repair operations and exit of Brazil in-country manufacturing

 

  Began consolidation of manufacturing for video security in Texas

  Implemented new project management tools in North America to improve deployment efficiency

 

  Drove new business transformation initiatives including business models for software-as-a-service and pricing for command center software and Next Generation 911 Core Services

 

  Increased quarterly dividend 11%

 

  Proactively prioritized capital expenditures while retaining customer “success-based” capital

 

 

  Transitioned seamlessly to CFO role during COVID-19 pandemic

 

  Led significant talent refresh and development, hiring approximately 400 employees and implementing job rotations for approximately 200 employees

 

  Engaged over 400 employees in DEI assessment and improvement plan

 

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  ANNUAL FINANCIAL AND
OPERATIONAL GOALS
  LONG-TERM STRATEGIC INITIATIVES   PEOPLE
  MOLLOY  

 

  Mitigated COVID-19 pandemic impact and delivered on revised sales forecast

 

  Grew Video Security and Analytics revenue 31%

 

  Achieved sixth consecutive year of record ending backlog

 

  Implemented virtual sales environment, including launch of new inside sales platform, effective usage of remote collaboration tools, and first-ever virtual staging of LMR system

 

  Increased LMR e-commerce 270%

 

  Grew channel-led business sequentially in Q3 and Q4 from COVID-19 pandemic lows

  Launched 30 new professional and commercial radio products

  Launched three new APX NEXT radios

  Launched new body worn camera

 

 

  Launched WAVE PTX in 34 countries

 

  Launched LMR cloud services

 

  Launched Avigilon cloud services

 

  Launched next-generation video devices and platforms for fixed and mobile video

 

  Launched Safety Reimagined, unifying voice, data video and analytics in one integrated platform

 

  Launched video-as-a-service, integrating body worn video, in-car video, automatic license plate recognition and digital evidence management

 

  Acquired and integrated IndigoVision Group plc and Pelco, Inc. to expand our fixed video portfolio

 

 

  Restructured worldwide operations team, improving sales efficiency and reducing costs

 

  Initiated DEI study which was subsequently expanded to a company-wide initiative

 

  Implemented several DEI programs including global focus groups, leadership listening sessions and global pay equity assessments

 

  Sponsored mental health and wellbeing webinars

  HACKER  

 

  Led comprehensive COVID-19 pandemic response plan to keep our employees safe and support our customers

 

  Reduced real estate footprint by 15% or 620,000 square feet, contributing $8 million in annual savings

 

  Supported completion of key strategic acquisitions and venture capital investments

 

  Supported $900 million bond offering

 

  Developed new contracting models for software-as-a-service and cloud-based offerings

 

  Successfully advocated for legislative and regulatory outcomes that supported public safety and law enforcement at the federal, state and local levels

 

 

  Continued successful execution of our global offensive litigation strategy to protect our innovation and defend our intellectual property rights, including multiple litigation victories against Hytera for trade secret misappropriation and copyright infringement

 

  Led favorable settlements in long-standing litigations

 

  Implemented 5-year patent portfolio plan to emphasize Command Center Software and Video Security and Analytics

 

  Published data rights code of conduct and policies on responsible use of artificial intelligence and facial recognition through the Motorola Solutions Technology Advisory Committee

 

 

  In response to COVID-19 pandemic, developed and implemented virtual recruiting, virtual onboarding and virtual internship programs

 

  Achieved Top 100 Internship Program award for third consecutive year

 

  Led Executive Committee talent management initiatives with significant focus on DEI

 

  Hired a Chief Diversity Officer

 

  Conducted 23 global DEI focus groups with more than 4,000 employees

 

  Implemented recruiting changes designed to identify and hire more diverse candidates

 

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  ANNUAL FINANCIAL AND
OPERATIONAL GOALS
  LONG-TERM STRATEGIC INITIATIVES   PEOPLE
  MARK  

 

  Grew Software and Services revenue 9%

 

  Grew recurring and software-as-a-service revenues

 

  Improved Software and Services non-GAAP OE by 290 basis points

 

  Grew cybersecurity revenue

 

  Grew Software and Services backlog

 

  Implemented business continuity plan for COVID-19 protocol

 

  Provided outstanding customer support during historic Atlantic hurricane season while also managing COVID-19 pandemic

 

  Led IT support effort to enable a work from home environment beginning in March 2020

 

 

  Launched PremierOne Cloud Suite

 

  Developed new cloud subscription and revenue management platform to allow scaling of recurring revenue business

 

  Integrated three acquisitions

 

  Launched new Next Generation 911 Core Services offering as part of our command center software portfolio and secured over $100 million in orders

 

  Renewed and added significant managed service contracts including Denmark and Tasmania

 

 

  Led effort to improve gender diversity, increasing hiring percentage of female employees

 

  Implemented multi-day leadership course for high potential directors

 

  Achieved 1,200 employees participating in DEI focus groups

 

  Assessed results from DEI focus groups and developed action plan to be implemented in 2021

 

  Developed enhanced retention tool focused on retaining high performing software engineers

  BONANOTTE  

  Implemented cost savings plan to mitigate impact of COVID-19 pandemic

 

  Implemented IT infrastructure to enable a work from home environment during the COVID-19 pandemic

 

  Assisted with seamless transition to new CFO

2020 NEO Discretionary Bonus Payments

Based on all of the factors discussed above, the Committee approved the following discretionary bonuses.

 

   NEO   TITLE   FISCAL 2020 BONUS  
PAYMENT
 
   

  BROWN

  Chairman and Chief Executive Officer   $ 1,421,875  
   

  WINKLER

  Executive Vice President and Chief Financial Officer   $ 242,291  
   

  MOLLOY

  Executive Vice President, Products and Sales   $ 435,861  
   

  HACKER

  Executive Vice President, General Counsel and Chief Administrative Officer   $ 371,134  
   

  MARK

  Executive Vice President, Software and Services   $ 349,808  
   

  BONANOTTE

  Former Executive Vice President and Chief Financial Officer   $ 339,363  

 

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Long-Term Incentive Plan Results

Our long-term incentive program (“LTI”) is 100 percent performance-based and provides awards that are earned based on either relative TSR or change in absolute stock price. Our plan not only rewards long-term stock price performance, but also ensures that our TSR outperforms the median of the S&P 500 in order to receive a target payout.

 

Long Range Incentive Plan and Performance Options

 

The 2018-2020 LRIP cycle and POs granted in 2018 were earned based on
TSR relative to the S&P 500 over the three-year performance period.

MSI’s three-year cumulative TSR performance of 93.9% resulted in
an 88th percentile rank versus S&P 500 companies, with awards
earned at 200% of target.
TSR calculation is defined in the “2020
Annual Compensation Elements” section below.

     

2018-2020 LRIP

 

 

 

POs

($108.47 exercise price)  

 

     
   

 

RELATIVE TSR PAYOUT SCALE (S&P 500)

 

 
     

 

PERCENTILE RANK

 

 

 

PAYOUT

 

 

 

TSR

 

     
   

90th - 100th Percentile

 

  250%

 

  98.6%

 

 
   

 

MSI (88th Percentile)

 

 

 

200%

 

 

 

93.9%

 

 
   

80th - 89.99th Percentile

 

  200%

 

  68.0%

 

 
   

70th - 79.99th Percentile

 

  175%

 

  47.0%

 

 
   

60th - 69.99th Percentile

 

  150%

 

  34.0%

 

 
   

55th - 59.99th Percentile

 

  110%

 

  26.5%

 

 
   

50th - 54.99th Percentile

 

  90%

 

  20.7%

 

 
   

45th - 49.99th Percentile

 

  80%

 

  14.7%

 

 
   

35th - 44.99th Percentile

 

  50%

 

  0.2%

 

 
   

30th - 34.99th Percentile

 

  30%

 

  -6.2%

 

 
   

<30th Percentile

 

  0%

 

   

Market Stock Units

One-third of the market stock units (“MSUs”) granted in 2017, 2018 and 2019 were earned in 2020 based on absolute stock price appreciation. These awards were earned at 200% (maximum), 171% and 118% of target, respectively, with corresponding stock price appreciation.

 

 

 

 

Grant Date: March 9, 2017
3rd of 3 Tranches Earned

 

  

 

Grant Date: March 8, 2018
2nd of 3 Tranches Earned

 

  

 

Grant Date: March 22, 2019
1st of 3 Tranches Earned

 

 

 

Beginning stock price: $79.35
Ending stock price: $179.43

 

  

 

Beginning stock price: $105.04
Ending stock price: $179.91

 

  

 

Beginning stock price: $140.64
Ending stock price: $165.96

 

 

PAYOUT = 200% OF TARGET

 

  

PAYOUT = 171% OF TARGET

 

  

PAYOUT = 118% OF TARGET

 

EVOLUTION OF OUR CEO’S PAY PROGRAM

This section outlines Mr. Brown’s compensation since Motorola Solutions became a publicly traded company in January 2011. Additional detail for each component of pay, including changes from 2019 to 2020, and the corresponding rationale, can be found in the “2020 Annual Compensation Elements” section below.

2011-2020 CEO Compensation

The Committee reviews Mr. Brown’s compensation in an effort to deliver a competitive, but responsible, target compensation package. Throughout Mr. Brown’s 13 years as CEO, the Committee has exercised its discretion to both increase and decrease Mr. Brown’s target compensation, as it has deemed appropriate.

 

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Since 2011, the Committee has decreased Mr. Brown’s short-term cash compensation and increased his long-term compensation and provided a net increase of 61.8% over the ten years. During this same time, Mr. Brown has guided the Company through a significant transformation and Motorola Solutions has delivered TSR of 451%.

 

       

 

   PAY COMPONENT

 

 

2011

 

 

2020

 

 

% CHANGE  

 

 

COMMENTS

 

       

  BASE SALARY

  $1,200,000   $1,250,000     4.2%    

 

In 2014, Mr. Brown’s base salary was increased by $50,000 by the Committee and he received an amended employment agreement which lowered his target incentive to 150%, resulting in an 18.6% decrease to Target Total Cash. In 2018, the Committee increased Mr. Brown’s target incentive from 150% to 175%.

 

 

  STIP TARGET %

 

  220%   175%     -20.5%  

 

  TARGET TOTAL CASH

 

  $3,840,000   $3,437,500     -10.5%  
       

  LRIP

  $3,000,000   $4,700,000     56.7%    

 

Beginning with the cycle that ended in 2018, Mr. Brown has received LRIP payouts in stock, thus eliminating cash from his LTI program. Starting in 2019, Mr. Brown’s LRIP was denominated 100% in performance stock units (“PSUs”).

 

       

  EQUITY

  $4,000,000   $9,400,000     135.0%    

 

In 2015, the Committee replaced Mr. Brown’s stock options and RSUs (containing a stock price hurdle) with POs and MSUs, improving the long-term performance orientation of the program.

 

  TOTAL LTI

  $7,000,000   $14,100,000     101.4%  
       

  TARGET TOTAL

  COMPENSATION

  $10,840,000   $17,537,500     61.8%    

 

AVERAGE ANNUAL INCREASE

OVER TEN YEARS IS 6.2%.

 

CEO Compensation vs. TSR

Over this ten-year period, Mr. Brown’s target compensation program has been managed to provide appropriate pay levels in relation to returns for our shareholders. An even stronger relationship holds true when considering Mr. Brown’s compensation as reported in the 2020 Summary Compensation Table on page 55 of this Proxy Statement, which is a mix of current year compensation and payouts related to prior years’ performance.

 

 

TARGET COMPENSATION VS. TSR

            

 

SUMMARY COMPENSATION TABLE VS. TSR  

   

LOGO

     

LOGO

 

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CEO 2020 LTI Pay Decisions

The Committee and our Board recognize that the retention of highly qualified leaders is critical to the Company’s continued success. Mr. Brown is a highly experienced senior leader at our Company. He joined the Company in 2003 and served in several senior executive roles before becoming CEO in 2008. Through his visionary leadership as CEO, Mr. Brown has transformed the Company into a global leader in mission critical communications. He has led the Company through the successful execution of key strategic initiatives that have positioned the Company for long-term success and, in doing so, has created significant value for shareholders. In evaluating Mr. Brown’s 2020 long-term incentive compensation, the Committee took into consideration the fact that the Company generated TSR of 165% over the 5-year period ended December 31, 2019, outperforming the S&P 500 index by 92 percentage points.

As the Committee and the Board looked ahead, they believed it to be in the best interests of our shareholders and critical to the Company’s path forward to retain Mr. Brown as CEO. The events of 2020 and the impact of the COVID-19 pandemic further illuminated the key role that Mr. Brown plays at our Company. We are confident in Mr. Brown’s ability to continue to make strategic investments that strengthen our portfolio and grow our Software and Services business. As such, the Board determined to increase Mr. Brown’s 2020 long-term incentive opportunity from $11.1 million in 2019 to $14.1 million. This increase was intended to:

 

     

Recognize Mr. Brown’s significant achievements to date as CEO,

 

     

Motivate Mr. Brown to continue to drive superior performance,

 

     

Ensure Mr. Brown’s leadership in developing and successfully executing a long-term management development and senior leadership succession plan, and

 

     

Maintain a pay program comprised primarily of performance-based and long-term, at-risk compensation.

The Committee and the Board believed an increase to Mr. Brown’s long-term incentive opportunity further aligned his interests with those of our shareholders, as his long-term incentive opportunity is 100% performance-based and tied to Motorola Solutions’ stock price performance, either on an absolute basis or relative to the S&P 500.

PROCESS FOR DETERMINING EXECUTIVE COMPENSATION

COMPENSATION PHILOSOPHY

Our executive compensation program design is guided by five key principles.

 

 

 

  PRINCIPLE

 

 

 

DESCRIPTION

 

 

 

  Business

 

 

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

 

 

 

  Performance

  Differentiated

 

 

Programs designed to create an effective link between pay and performance at both the Company and individual levels

 

 

  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 shareholder interests by delivering meaningful equity awards and maintaining robust stock ownership guidelines

 

 

  Simplicity

 

 

Engagement is driven through simple, cost-efficient plan design

 

 

 

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SOUND GOVERNANCE PRACTICES

Our executive compensation program is aligned to our business strategy and incorporates strong governance.

 

 

WHAT WE DO

 

 

 

PRACTICE

 

     

 

MSI PRACTICE

 

 
 

 

Annual Shareholder Say on Pay

 

     

 

We seek an annual non-binding advisory vote from shareholders on our executive compensation

 

 
 

 

Robust Stock Ownership Guidelines

 

     

 

Executives are required to hold stock equal to 10x salary for CEO and 3x salary for other NEOs

 

 
 

 

Transparent Disclosure

 

     

 

Robust individual performance disclosure for STIP

 

 
 

 

Pay-for-Performance and Shareholder Alignment

 

     

 

Long-term incentive program for management team, including the NEOs, is 100% performance-based with respect to annual grants

 

 
 

 

Use of Independent Advisor

 

     

 

The Committee retains Compensation Advisory Partners LLC (“CAP”) to review Company compensation programs and practices

 

 

 

WHAT WE DON’T DO

 

 

 

PRACTICE

 

     

 

MSI PRACTICE

 

 
 

 

No Cash in CEO LTI Program

 

     

 

CEO LTI is paid out 100% in equity

 

 
 

 

No Excise Tax Gross-ups

 

     

 

We do not provide tax gross-ups in connection with any perquisites or in the event of any “golden parachute payment” in connection with a change in control

 

 
 

 

No Excessive Perquisites

 

     

 

We do not provide excessive perquisites to our NEOs and believe that our limited perquisites are reasonable and competitive

 

 
 

 

No Hedging of Company Securities

 

     

 

Our Insider Trading Policy prohibits directors, officers and other designated employees from directly or indirectly holding securities tied to the performance of the Company other than our Common Stock and stock options delivered directly to employees under our option and incentive plans

 

 
 

 

No Single Trigger in a Change in Control

 

     

 

In the event of a change in control, all severance pay components have a double trigger (subject to certain conditions)

 

 
 

 

HOW WE PLAN COMPENSATION

Our compensation framework is based on sound program design principles, which allow for the flexibility to competitively, but responsibly, address the dynamic labor markets in which we compete. These programs have been designed to focus executives on the achievement of our long-term business plan and shareholder value creation. Our incentive plans utilize rigorous financial goals and require above median relative outperformance for target payouts, while incorporating risk-mitigating features, such as payout caps, to ensure we reward sustainable growth.

Over the years, our executive compensation program has evolved with our business strategy, incorporated feedback from our shareholders, and maintained market competitiveness to properly incent and reward our management team. Additionally, we conduct regular risk assessments of our compensation programs and practices and review results with the Committee at least annually.

When setting annual compensation for our NEOs, the Committee balances the current state of the business with setting the stage for the future. The Committee, with assistance from its independent advisor CAP, considers peer company pay practices for comparable positions; NEO experience, tenure, scope of responsibility and performance; internal pay alignment; and succession planning. The Committee uses the 50th percentile of our peer group and surveys as an initial guideline for establishing target total compensation opportunities for our NEOs. For 2020, on average, our NEOs were between the market 50th and 75th percentiles, with the exception of our highly seasoned CEO.

The Committee engages an independent consultant, 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 recommendations for our CEO and other members of management’s EC.

 

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In 2020, 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 2020, the Committee also reviewed the independence of CAP using assessment criteria that aligned with the SEC and related NYSE rules. The Committee concluded that CAP was independent and had no conflicts of interest.

PERFORMANCE-BASED COMPENSATION STRUCTURE

The performance-based structure for 2020 incorporates incentives that measure both short-term and long-term performance. In addition to base salary and an annual STIP award, this structure, shown graphically below (with incentives shown at their target amounts), includes an LTI award made up of our LRIP, POs and MSUs. The Committee believes a majority of compensation should be in the form of LTI to better drive alignment with shareholder interests and executive retention.

 

 

LOGO

2020 TARGET TOTAL COMPENSATION SUMMARY

When setting NEO compensation, the Committee first determines target total compensation and second, determines each pay component in support of the appropriate aggregate value and mix.

 

     

  NEO

 

  BASE SALARY  

 

  TARGET  

STIP %

 

TARGET
  TOTAL CASH  

      

LTI

      

TARGET TOTAL

  COMPENSATION  

 

YEAR-OVER-
  YEAR CHANGE  

 

LRIP

 

PO/Option

 

MSU/RSU

       

  BROWN

 

$1,250,000

 

175%

 

$3,437,500

 

  $4,700,000  

 

  $4,700,000  

 

  $4,700,000  

 

$17,537,500

 

20.5%

       

   WINKLER1

 

$550,000

 

95%

 

$1,072,500

 

$322,441

 

$450,000

 

$450,000

 

$2,294,941

 

N/A2

       

  MOLLOY

 

$740,000

 

95%

 

$1,443,000

 

$1,066,666

 

$1,066,667

 

$1,066,667

 

$4,643,000

 

19.5%

       

  HACKER

 

$630,000

 

95%

 

$1,228,500

 

$700,000

 

$700,000

 

$700,000

 

$3,328,500

 

11.7%

       

  MARK

 

$600,000

 

95%

 

$1,170,000

 

$800,000

 

$800,000

 

$800,000

 

$3,570,000

 

34.1%

       

  BONANOTTE

 

$718,000

 

95%

 

$1,400,100

 

$1,033,334

 

$1,033,333

 

$1,033,333

 

$4,500,100

 

19.5%

 

  1

Mr. Winkler’s target incentive was prorated due to his promotion to Executive Vice President and Chief Financial Officer on July 1, 2020. Mr. Winkler’s target STIP % for January – June 2020 was 75% and increased to 95% effective July 1, 2020.

  2 

Table only reflects Mr. Winkler’s compensation as an NEO.                                                                                                                                    

 

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2020 ANNUAL COMPENSATION ELEMENTS

BASE SALARY

As the only fixed compensation element in our program, base salary is used to provide what we believe to be a baseline level of stability required to be market competitive. Salaries are reviewed and adjusted by the Committee as needed. Annual increases are not guaranteed or automatic.

In March 2020, the Committee reviewed base salaries for our NEOs and applied market adjustments, where applicable. Mr. Brown has not received a base salary increase since 2014 and did not receive a base salary increase in 2020. As disclosed earlier in this CD&A, in response to the Company’s financial performance during the COVID-19 pandemic, for the period from May 3, 2020 through November 1, 2020 with respect to Mr. Brown and the period from June 1, 2020 through November 1, 2020 for our other NEOs except Mr. Winkler, our NEOs received reduced base salaries in amounts equal to a 50% reduction for Mr. Brown and a 15% reduction for our other NEOs. See the 2020 Summary Compensation Table on page 55 of this Proxy Statement for further information, including actual salaries received for 2020.

 

                                                                                                                   
       
   NEO  

  2019 BASE  

  SALARY RATE  

 

  2020 BASE  

  SALARY RATE  

    YEAR-OVER-  
  YEAR CHANGE  
 

  2020 ACTUAL  

  SALARY  

     

  BROWN

 

$1,250,000

 

$1,250,000

 

0.0%

 

$937,500

     

  WINKLER1

 

 

$550,000

 

N/A

 

$456,077

     

  MOLLOY

 

$710,000

 

$740,000

 

4.2%

 

$686,808

     

  HACKER

 

$605,000

 

$630,000

 

4.1%

 

$584,827

     

  MARK

 

$545,000

 

$600,000

 

10.1%

 

$550,500

     

  BONANOTTE

 

$700,000

 

$718,000

 

2.6%

 

$668,696

  1

Mr. Winkler is an NEO because he was promoted to Executive Vice President and Chief Financial Officer on July 1, 2020. Table only reflects Mr. Winkler’s compensation as an NEO.

SHORT-TERM INCENTIVES

The STIP is an annual cash incentive award based on the Company’s achievement of financial performance and an executive’s individual performance. The Committee sets the target value for STIP as a percentage of an executive’s base salary.

Incentive Targets

There were no changes to individual target award percentages in 2020. Our CEO, Mr. Brown, continued to have an individual target award percentage of 175%, and all other NEOs’ target percentages continue to be 95%.

Payout Formula

Actual STIP awards are based on the executive’s target incentive opportunity, the Company’s achievement of performance results (“Business Performance Factor”) and IPF assessment. The payout opportunity for both the Business Performance Factor and the IPF ranges 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 a market evaluation.

 

 

LOGO

Metric Selection

For 2020, the Business Performance Factor was based on achievement of non-GAAP OE (weighted 65%) and Free Cash Flow (weighted 35%) goals. Non-GAAP OE 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

 

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liquidity and rates of return for the business. We believe non-GAAP OE and Free Cash Flow appropriately measure our annual business performance and ultimately drive our long-term shareholder value over time.

LONG-TERM INCENTIVES

Our LTI program, implemented in 2015, was designed with the specific intention of aligning the largest component of NEO pay to the achievement of exceptional and sustainable value creation for our shareholders during this pivotal transformation in our business. The LTI program achieves this through:

 

     

100% performance-based vesting with respect to our annual grant under the LTI program (i.e., no time-based vesting or guaranteed value)

 

     

The program metrics being 100% aligned to creating more value for our shareholders

 

     

The majority of the total award value requiring TSR performance above the median of S&P 500 companies in order to receive a target payout

Determining Target Award Values

The Committee reviews LTI target award values annually by first determining a target total compensation value appropriate for the size and complexity of the NEO’s role and then determining the appropriate LTI value based on our philosophy of delivering the largest percentage of total compensation in LTI. The Committee also considers the 100% performance-based nature of our LTI program and how our Company’s potential future performance has been impacted by the groundwork that has been set in the past year. As we continue to execute our long-term strategy through our Company’s transformation, the Committee believes it is critical that each NEO’s target opportunity appropriately reflects their contribution.

When setting LTI target awards for 2020, the Committee considered the significant impact of Mr. Brown’s decisions and actions on our longer-term business strategy and transformation.

The Committee approved total target 2020 LTI at its March 2020 meeting.

 

           
  NEO  

TOTAL TARGET  

2019 LTI

  2020 LRIP   2020 POs/
Options
  2020 MSUs/
RSUs
  TOTAL TARGET
2020 LTI
  YEAR-OVER-
  YEAR CHANGE  
           

 BROWN

 

$11,112,500

 

$4,700,000

 

$4,700,000

 

$4,700,000

 

$14,100,000

 

26.9%

           

 WINKLER1

 

 

$322,441

 

$450,000

 

$450,000

 

$1,222,441

 

N/A

           

 MOLLOY

 

$2,500,000

 

$1,066,666

 

$1,066,667

 

$1,066,667

 

$3,200,000

 

28.0%

           

 HACKER

 

$1,800,000

 

$700,000

 

$700,000

 

$700,000

 

$2,100,000

 

16.7%

           

 MARK

 

$1,600,000

 

$800,000

 

$800,000

 

$800,000

 

$2,400,000

 

50.0%

           

 BONANOTTE

 

$2,400,000

 

$1,033,334

 

$1,033,333

 

$1,033,333

 

$3,100,000

 

29.2%

  1

Mr. Winkler, who became Executive Vice President and Chief Financial Officer in July 2020, received an annual equity grant in March 2020, and a promotion grant in July 2020 comprised of time-vested stock options and RSUs, and a prorated LRIP. Table only reflects Mr. Winkler’s compensation as an NEO.

LTI Components

The 100% performance-based LTI program includes the LRIP, POs and MSUs, each of which comprise one-third of the total LTI mix.

 

     

The LRIP, which now includes performance stock unit (“PSU”) grants for the CEO and his direct reports, and POs are based on three-year TSR relative to the S&P 500. The payout scale for the LRIP and POs requires our performance over a three-year period to exceed median performance of the S&P 500 companies before earning a target payout.

 

     

The 2020-2022 LRIP cycle is denominated in 100% PSUs for the CEO and a mix of 50% PSUs / 50% cash for the other NEOs. The LRIP and POs utilize a three-year performance period and, consistent with earned POs, earned PSUs will vest on the third anniversary of the grant. Beginning in 2021, our LRIP cycle will be denominated in 100% PSUs for each NEO.

 

     

With new LRIP cycles denominated in equity, the 2020 Summary Compensation Table on page 55 of this Proxy Statement will show LRIP awards in two places: LRIP earned from the prior cycle (with amounts paid in cash and stock) will be reflected in the Non-Equity Incentive Plan column, and target PSU grants for the new LRIP cycle will be reflected in the Stock Awards column (with grant date fair value of the new LRIP PSUs at target).

 

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If our TSR over the performance period is negative, but would still result in a ranking that would provide a payout, the Committee has unlimited discretion to reduce the calculated LRIP payout (and number of POs vesting).

 

     

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 the 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.

 

     

MSUs are based on absolute stock price and provide a vehicle to further align with our shareholders and support retention of our NEOs.

 

     

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.

 

     

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 concurrent performance periods.

 

 

LOGO

COMPARATIVE MARKET DATA

When setting compensation for our NEOs, the Committee reviews comparative market data from our peer group companies, as well as survey market data.

2020 PEER GROUP

Our peer group is used by the Committee to compare pay levels, pay mix and alignment of pay with our performance, as discussed in the “How We Plan Compensation” section above on page 45 of this Proxy Statement.

Peer Selection Criteria

To ensure meaningful comparisons, the Committee, with the assistance of CAP, the Committee’s independent consultant, reviews the peer group annually and makes updates as necessary. Specifically, as we continue to extend our leadership in mission critical solutions by expanding our technologies within our Products and Systems Integration and Software and Services segments through strategic investments and acquisitions, the Committee expanded its review to include software and services companies.

 

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To create a sufficiently large peer group with whom we compete for executive talent, the Committee considers a combination of primary criteria and secondary criteria, including those listed below:

 

     

Primary Criteria: Publicly traded securities listed on a U.S. stock exchange, revenues and/or market capitalization within 1/3x to 3.0x of that of Motorola Solutions, and relevant Global Industry Classification Standard (GICS) sub-industry segments across the communications, information technology and industrials sectors

 

     

Secondary Criteria: Companies that list Motorola Solutions as a peer, companies named as peers by shareholder advisory firms, companies listed as peers by current peers, and companies with comparable revenue growth, TSR, business mix

Changes to the 2020 Peer Group

In early 2020, the Committee approved the following changes:

 

     

Removals: Amphenol Corporation, Arris International PLC (acquired by CommScope in April 2019), Harris Corp. (merged with L3 Technologies in July 2019 to form L3Harris Technologies), Juniper Networks, Inc. and TE Connectivity LTD.

 

     

Additions: Autodesk, Inc., Intuit Inc., L3Harris Technologies, Inc. (combined company after Harris Corp. and L3 Technologies 2019 merger) and ServiceNow, Inc.

At the time of approval, in February 2020, Motorola Solutions was positioned at the 64th percentile for revenue and the 44th percentile for market capitalization among the resulting 14 company peer group.

2020 Peer Group Companies

 

     

AGILENT TECHNOLOGIES, INC.

  

INGERSOLL RAND PLC (n/k/a Trane Technologies)

  

PARKER-HANNIFIN
CORPORATION

  

SERVICENOW, INC.

     

AUTODESK, INC.

  

ILLINOIS TOOL WORKS INC.

  

RAYTHEON COMPANY1

  

TRIMBLE INC.

     

CITRIX SYSTEMS, INC.

  

INTUIT INC.

  

ROCKWELL AUTOMATION, INC.

    
     

DOVER CORPORATION

  

L3HARRIS TECHNOLOGIES, INC.

  

ROPER TECHNOLOGIES, INC.

    

 

1 

Raytheon Company and United Technologies Corporation merged in April 2020 to form Raytheon Technologies Corporation. Pay decisions for 2020 were made using Raytheon Company (not Raytheon Technologies Corporation).

SURVEY MARKET DATA

To supplement our peer group data, the Committee also considers compensation surveys that include data from companies of similar size and business segments to Motorola Solutions. For 2020, the Committee considered data from the Radford Global Technology Survey, Willis Towers Watson High Tech Executive Survey and the IPAS Global High Technology Survey.

EQUITY USAGE UNDER OUR COMPENSATION PROGRAMS

In 2012, we reduced our overall share usage (equity grants as a percentage of common shares outstanding) from our prior granting practices to more effectively manage our stock-based compensation expense and overall shareholder dilution. The expense from grants prior to 2012 made to a broader population was fully recognized by 2016. Our share granting practices have again evolved to meet the changing needs of our business and drive our growth. 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.

In addition, at the 2015 Annual Meeting of Shareholders, shareholders 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”). This reduced the total number of shares reserved and approved for issuance by approximately 7 million shares, to 12 million shares. We plan to continue to closely manage our equity-granting practices to ensure our share usage and stock-based compensation expense remains in line with competitive levels.

In 2020, we continued to have significant acquisition activity and, in an effort to preserve enterprise knowledge and align our new employees’ interests with those of our shareholders, we issued equity either as part of an acquisition or made retention grants under the Omnibus Plan. The shares issued as part of an acquisition were granted outside of our standard compensation programs and do not count against our shares available for future issuance. The information below for 2019 and 2020 only includes share usage and aggregate value of equity granted under our compensation programs and excludes 0.27% share usage and $56 million value of equity granted as part of acquisitions for 2019, and 0.03% share usage and $9 million value of equity granted as part of acquisitions for 2020.

 

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LOGO

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 and other members of the management team are approved by the Committee, with concurrence by the Board for grants to Mr. Brown.

OTHER COMPENSATION POLICIES AND PRACTICES

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 Counseling3

 

 

LOGO

 

  

 

Vice Presidents

 

   
     

  Executive Physicals

 

 

LOGO

 

  

 

Senior and Executive VPs

 

   
     

  Security System Monitoring

 

 

CEO

 

            
     

  Personal Use of Corporate Aircraft Service4

 

CEO

 

            

1 Pension provided to U.S.-based eligible employees hired prior to January 1, 2005.

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

3 A financial wellness coaching program is also offered to all U.S. employees.

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

STOCK OWNERSHIP GUIDELINES

To ensure strong alignment of our senior management with the interests of our shareholders, the Company maintains stock ownership guidelines for our senior executives, including each of our NEOs. 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 achievement period.

 

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Our stock ownership requirements are expressed as a multiple of base salary as shown below:

 

EXECUTIVE GROUP   

    MULTIPLE OF    
    BASE  SALARY    

    2020    

  Chairman and Chief Executive Officer

  

10x

  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.

CHANGE IN CONTROL POLICY

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 shareholders. To that end, we recognize that the possibility of a change in control may exist and that this possibility, along with 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 shareholders. 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 of this Proxy Statement on page 65 titled “Change in Control Arrangements.”

 

 

CIC PROVISION

 

CIC SEVERANCE PLAN

 

  Eligibility

 

 

 

Executive and Senior Vice Presidents

 

  Cash Severance Multiple

 

 

Two times sum of base salary and 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 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 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 clawback 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 or MSUs, regardless of when they were issued.

 

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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 was 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, but in years prior to 2018 there was an exception to such limit for compensation that qualified as “performance-based compensation.” Effective for 2018, the Tax Cuts and Jobs Act amended Section 162(m) to, among other things, extend the deduction limitation to the Chief Financial Officer and eliminate the exception for performance-based compensation, except for certain qualifying arrangements in place as of November 2, 2017. The American Rescue Plan Act of 2021, enacted on March 11, 2021, expands the list of “covered” employees to include the next five highest-paid employees in addition to the “covered officers.” This provision is effective beginning in 2027.

The Company did not make any significant changes to its outstanding incentive awards in 2020 in an effort to maintain any tax deductions that may be applicable due to “grandfathered” status under our existing plans. However, the Committee reserves the right to provide for compensation to executive officers that may not be deductible pursuant to Section 162(m). In addition, because of the continued development of the application and interpretation of Section 162(m) and the regulations issued thereunder, we cannot guarantee that compensation intended to satisfy the requirements for deductibility under Section 162(m), as in effect prior to 2018, would or will in fact be deductible.

ANTI-HEDGING POLICY

We have adopted, as part of our insider trading prohibitions policy, prohibitions on directors, officers (including our NEOs) and certain other designated employees from directly or indirectly holding any security tied to the performance of Motorola Solutions other than our Common Stock and stock options delivered directly to employees under our equity incentive plans.

Our broader insider trading prohibitions policy is applicable to all employees who may have access to inside information and is designed to ensure compliance with all applicable insider trading rules.

 

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 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.

On March 12, 2020, effective May 11, 2020, Joseph M. Tucci was appointed the Chair of the Compensation and Leadership Committee (the “Committee”). Prior to Mr. Tucci’s appointment, Anne R. Pramaggiore served as Chair of the Committee from January 1, 2020 until May 11, 2020. On May 11, 2020, Kenneth D. Denman was appointed as a member of the Committee, and Egon P. Durban was a member of the Committee throughout 2020.

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 that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into Motorola Solutions’ Annual Report on Form 10-K for the year ended December 31, 2020.

Respectfully submitted,

Joseph M. Tucci, Chair

Kenneth D. Denman

Egon P. Durban

 

 

 COMPENSATION AND LEADERSHIP COMMITTEE INTERLOCKS AND

 INSIDER PARTICIPATION

 

Joseph M. Tucci, Director and Chair of the Committee and Egon P. Durban, Director, served on the Committee throughout 2020. Kenneth D. Denman, Director, was appointed to the Committee on May 11, 2020, and Anne R. Pramaggiore served as a member of the Committee from January 1, 2020 until May 11, 2020. No member of the Committee was, during the fiscal year ended December 31, 2020, an officer, former officer, or employee of the Company or any of our subsidiaries. We did not have any compensation committee interlocks in 2020.

 

54   Motorola Solutions Notice of 2021 Annual Meeting of Shareholders and Proxy Statement


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NAMED EXECUTIVE OFFICER COMPENSATION

 

2020 SUMMARY COMPENSATION TABLE

The following table sets forth the total compensation of each of the Company’s NEOs, including each individual who served as the Company’s Chief Financial Officer during 2020, for the years ended December 31, 2020, 2019 and 2018.

 

Name and

Principal Position

             (a)

 

Year

(b)

   

Salary

($)(1)

(c)

   

Bonus

($)(2)

(d)

   

Stock

Awards

($)(3,4)

(e)

   

Option

Awards

($)(4)

(f)

   

Non-Equity

Incentive

Plan

Compensation

($)(5)

(g)

   

 

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings

($)(6)

(h)

   

All Other

Compensation

($)(7)

(i)

   

Total

($)

(j)

 

 

 Gregory Q. Brown

 Chairman and Chief Executive Officer

 

 

                 

                                         

    2020       937,500       1,421,875       9,399,711       4,699,939       6,250,000           21,004           316,530           23,046,559  
                 
      2019       1,250,000       0       7,408,181       3,704,137       10,966,875           35,151           255,646           23,619,990  
                 
      2018       1,250,000       0       3,843,722       3,843,720       11,150,625           0           260,491           20,348,558  

 

 Jason J. Winkler

 Executive Vice President and Chief Financial Officer

 

 

                 
      2020       456,077       242,291       449,799       449,971       386,728           153,045           24,514           2,162,424  

 

 John P. Molloy

 Executive Vice President, Products and Sales

 

 

                 
      2020       686,808       435,861       1,599,819       1,066,601       1,333,332           176,743           23,400           5,322,564  
                 
      2019       703,769       0       1,249,810       833,331       2,422,429           96,172           32,567           5,338,078  
                 
      2018       629,346       0       666,648       666,644       2,079,028           0           41,396           4,083,062  

 

 Mark S. Hacker

 Executive Vice President, General Counsel and Chief Administrative Officer

 

 

                 
      2020       584,827       871,134       1,549,581       699,991       1,166,668           80,467           11,400           4,964,067  
                 
      2019       600,846       0       899,790       599,996       2,114,764           67,873           18,149           4,301,418  
                 
      2018       581,308       0       583,301       583,319       1,926,057           0           19,389           3,693,374  

 

 Kelly S. Mark

 Executive Vice President, Software and Services

 

 

                 
      2020       550,500       349,808       1,199,834       799,990       706,482           109,157           22,493           3,738,264  
                 
      2019       535,654       0       799,745       533,309       1,420,100           8,268           30,149           3,327,225  
                 
      2018