Given the interest in Vikram Pandit taking the helm at Citi almost a year ago, I thought Mutineers might also be interested in the news of another DBD CEO appointed to save a troubled American company.

Motorola’s 70 Million Dollar Man

The problems facing Motorola’s handset division have provided fodder for business and tech rags for quite a while now. The core problem is that several years have now passed since the groundbreaking, nearly iconic Moto Razr was released, and the company has had a helluva time coming up with worthy successors. The result is that the firm that literally invented the mobile phone, withered the 80s/90s East Asian Invasion, and launched a celebrated comeback now finds itself slipping fast in a brutally competitive, global market -

Shares in the [Motorola] have fallen by more than 60 per cent since October 2006, when investors began to become disillusioned with the company’s falling sales. Its global market share has fallen to 9.5 per cent from 24 per cent two years ago, taking it from second to third place behind Nokia and Samsung.

The ailing handset division has been a drag on Motorola’s overall fortunes and several strategic options have been explored to save the group. The current front runner option is to bring in a new CEO for the group and spin out handsets as a separate company. On Monday, Motorola announced that Sanjay Jha would be tapped to lead this massive turnaround.

Due to my work in wireless systems & Sanjay’s former role as COO of Qualcomm, I’ve spent a lot of time within his sphere of influence (although I’ve never met the guy personally). Jha rose to the COO from the VLSI engineering ranks at Qualcomm CDMA Technologies (QCT) - the dominant business unit at the company and the one responsible for the bulk of QCOM’s $3B / year in profit.

Sanjay’s reputation within Qualcomm was stellar, to say the least. The wireless chip biz is a very competitive environment where sharp elbows, big egos, and fierce rivalries are the norm. Despite that, practically every person I’ve known who has ever worked for him raves to a startling degree. Press, analysts, and Wall Street nearly to a man have enjoyed his briefings and mastery of both the business and technical aspects of wireless. So much so that in nearly any other circumstance, he’d be widely considered the heir apparent to the throne.

However, a classic business / HR problem manifested itself mightily. The current CEO of Qualcomm, Paul Jacobs, is not only a young(-ish) 45 years old but is also the son of the famous company founder —> translation: He ain’t gonna make room for a new CEO anytime soon. So despite the peachy position at Qualcomm (whose stock has recently hit a 52wk high), Sanjay didn’t have the headroom to take his next career step.

QCOM vs. MOT Stock; Note the “Jha-effect” on both stocks

At the other end of the industry spectrum, we have Motorola. Tech companies are very much momentum plays for traders and employees alike and once the tide starts turning it rapidly becomes a self-fulfilling prophecy. Morale, culture, and stock price problems have massive, nonlinear effects that silently permeate nearly all operational aspects of a business. As a result, there’s currently a veritable flood of resumes streaming out of Motorola’s mobile phone group as the key brainpower leaps for greener pastures. So, by nearly any measure the problem at hand is a ridiculously difficult one to tackle. And in Motorola, a man of tremendous capability is presented with a company saddled with tremendous problems looking for a savior.

As tough as the job will be, multiple analysts have noted that Jha is one of the few individuals in the industry who have the chops to (possibly) pull off a turnaround -

“We are hard-pressed to imagine a better candidate than Dr. Jha,” said Citigroup analyst Jim Suva. [link]

Simona Jankowski and Thomas Lee, analysts for Goldman Sachs, called his appointment “a big win” for Motorola and a loss for Qualcomm.

Ben Wood, head of research at CCS Insight, said: “Sanjay Jha is very well connected in the mobile industry and knows the challenges facing him. Taking on that role is a hugely daunting task, but I think he has the personality to pull the company forward.” [link]

…None of this means Jha is doomed to fail at Motorola; in fact, Wall Street is bullish on his prospects. Motorola stock closed 11% higher for the day, driven by the news, and analysts had mostly nice things to say. UBS analyst Maynard Um pointed to his “strong execution history” at Qualcomm, and American Technology Research hailed his “great technical background, industry experience and business savvy.” [link]

Jha, living up to his reputation for business pragmatism, promises no drastic changes… at first. Instead, echoing the precedent of Lou Gerstner’s turnaround at IBM, Jha promises 90 days of learning -

“I’m going to take about 90 days working with the team here,” Jha told Fortune on Monday. “I don’t come here without any ideas - I have very strong ideas - but I’ll be working with a team here to determine what are the right next steps on the chipsets and platforms strategies.” He said the next year’s worth of phone introductions will probably go as planned, so his changes won’t be obvious until the second half of 2009.

Whatever the outcome, Jha is clearly taking a major risk with his career by leaving his sure thing at hyper-profitable Qualcomm and trying to right the sinking ship that’s Motorola Mobile Devices. As compensation, Motorola is offering him a package which guarantees a minimum of $70M in comp over the next 3 years -

$The new guy will have plenty of incentive to make good on that pledge to turn Moto’s phone business around. On top of his $1.2 million salary and annual cash bonus of up to $2.4 million, Jha’s welcome package includes personal use of the corporate jet, relocation expenses, a promise to make him whole if he loses money on the sale of his home in San Diego, and another promise to pay him $30 million in cash if Motorola fails to spin off the cell phone division before November 2010. He will be entitled to stock options worth 3% of the mobile devices division if it is made independent before that deadline. And of course, there are the equity awards: 3.67 million restricted stock units with a present value of more than $35 million, which he will receive over the next three years; and an option to buy 16.6 million shares at current prices.

Why those eyepopping numbers? Cuz Moto needs him more than he needs Moto -

So, what happens if Jha fails? For Motorola, of course, it would be disastrous. For Jha, however, maybe not so bad. As Nielsen IAG analyst Roger Entner noted, if Moto succeeds, Jha “can be the Lee Iacocca of the mobile industry, bringing an iconic brand back to life…if it goes south, he can say: ‘Sorry, this thing was so messed up when I got there that there was nothing I could do.’ “

And, of course, there’s always a desi angle. Interestingly, it turns out that Sanjay Jha shares his name with some other individuals including a motivational speaker -

Jha’s an impressive leader indeed — and apparently very versatile. If you Google his name, you’ll find that in addition to being a whiz in telecom, Sanjay Jha is also a Bollywood filmmaker who worked on such movies as “Praan Jaye Par Shaan na Jaye” and “Mission Kashmir.” He’s also South Asia bureau chief for the Canadian-based website NowPublic (and won the prestigious Loeb award this year to boot!) as well as an Amazon user in Toronto who took (and failed) the Oracle database exam.

Will the real Sanjay Jha please stand up?

Perhaps in the confusion they can scam some of his comp