We have chosen the telecommunications equipment sector on which to make our analysis. More specifically for the purposes of this case we will examine the following five companies: Cisco Systems Inc, Harris Corp, Motorola, Nokia and Qualcomm Inc.
We will begin by presenting some information on each company's CEO
Name of companyQualcommCiscoHarrisNokiaMotorola
Name of CEOIrwin JacobsJohn T ChambersHoward L. LanceJorma OllilaEdward J. Zander
In office since 19851995200319992004
A company insider or outsiderInsiderInsiderOutsiderInsiderOutsider
More specifically in Qualcomm, Jacobs is CEO and cofounder of the company therefore he is considered an insider. In the case of Cisco and Nokia the CEOs are also insiders because they have worked up through the ranks of their companies. More specifically, in Cisco CEO was on the Board of Directors before he assumed that position; additionally, in Nokia the CEO held numerous positions in the company for a number of years before becoming CEO.
In contrast Harris and Motorola both have CEOs that are outsiders to the firm, meaning that before becoming CEOs of these companies they held positions in other companies. For example, Edward J. Zander, CEO of Motorola worked for Sun Microsystems as President and COO.
Next, we will examine the compensation plans and the number of shares they own in the company.
Name of CompanyName of CEOSalary paidBonus givenNumber of shares owned
NokiaJorma Ollila$ 1,386,666$ 1,384,967
($130,000 from other compensation)189,388
QualcommIrwin Jacobs$ 2,790,000No Bonus15,747,351
CiscoJohn ChambersNot Available$ 1,000,000
HarrisHoward Lance$ 4,210,000No Bonus29,861
MotorolaEdward J. ZanderNot AvailableNot Available Not Available
In general the CEOs are paid handsomely, with salaries and compensations combined reach the six figures. In addition they own stock in the company that gives them an additional incentive to focus on increasing stockholders' value. In the case of Edward J. Zander, CEO...