Motorola holders approve say-on-pay, berate CEO

By Nick Carey

ROSEMONT, Ill., May 5 (Reuters) - Motorola Inc (MOT.N) shareholders approved a "say-on-pay" proposal and blasted management's performance at the world's third-biggest mobile phone maker's annual meeting on Monday.

Under a barrage of criticism from investors, company management promised it was working to "refresh" its product portfolio to attract consumers to its mobile phones again.

While less contentious than last year's meeting when Motorola was embroiled in a proxy battle with activist investor Carl Icahn, shareholders jumped at the chance to vent spleen over the company's weak performance and beleaguered stock.

"I think we need to change the CEO," Heidi Liebwein, a shareholder for 20 years, told Reuters. "Good or bad, everything starts at the top."

Motorola has been losing out to rivals such as Nokia Oyj (NOK1V.HE), Samsung Electronics (005930.KS) and LG Electronics (066570.KS) for more than a year as it has been slow to deliver advanced phones with high-speed Web links and has yet to create a successor to its once-lauded Razr phone, launched in 2004.

The Schaumburg, Illinois company has lost about 60 percent of its market value since mid-October 2006 when it started to disappoint investors. Its cell phone market share has fallen to less than half its peak of 23.3 percent at the end of 2006.

"Look at how far the stock is down. That's why I'm unhappy," Edward Bell, a Motorola shareholder for at least eight years, told Reuters. "We need a new leadership at this company that's going produce."

Greg Brown took over as CEO in January, replacing Ed Zander, who was also criticized sharply by investors on Monday.

In April the company ended its second proxy battle with Icahn, its second biggest shareholder, when it agreed to allow two of Icahn's director nominees onto the board. Several investors said Icahn was good news for the company.

"Maybe Icahn is just what Motorola needs to stir things up," Bell said.

A shareholder proposal from the AFL-CIO Reserve Fund for an annual, non-binding advisory vote on executive compensation garnered the support of 50.7 percent of shareholders. The result applauded by many of the several hundred attendees at the Rosemont Theater in the Chicago suburb of Rosemont.

Frustration with that track record was evident among investors, many of whom raked Chief Executive Greg Brown over the coals during a question-and-answer session.

"(Shareholders) should be outraged at the company's performance," said shareholder George Polous, quivering with anger. "They've been telling us baloney stories for years."

Several investors also noted that Motorola's product lineup pales in comparison to products such as Apple Inc's (AAPL.O) iPhone, which went on sale last summer.

Brown repeatedly and calmly thanked shareholders for their candor and promised "wonderful things" were yet to come from the mobile phone unit.