NEW YORK - Motorola Inc. snagged Sanjay Jha, the chief operating officer of Qualcomm Inc. and a star of the wireless industry, to head its handset division as that unit prepares to become an independent company.
Jha will also be co-chief executive of the parent company, sharing the responsibility with incumbent Greg Brown until the spinoff next year. Brown will take responsibility for Motorola's other two divisions.
Motorola shares rose $1.01, 11.5 percent, to $9.82 Monday.
Brown said Jha "brings a whole host of different ingredients to the table," including customer relationships, technical expertise and leadership abilities.
Jha, 45, has a doctorate in electronic and electrical engineering. In addition to being Qualcomm's chief operating officer, he was president of the Qualcomm division that made chips for cell phones.
Analysts uniformly praised the appointment.
"We are hard-pressed to imagine a better candidate than Dr. Jha," said Citigroup analyst Jim Suva.
Goldman Sachs analysts Simona Jankowski and Thomas Lee called it "a big win" for Motorola and a loss for Qualcomm.
"We believe he is very well respected both in industry and in the investor community," the analysts wrote. "From Motorola's perspective, we expect this will improve the company's competitive positioning."
Qualcomm shares fell $2.60, or 4.7 percent, to end at $52.87.
Schaumburg, Ill.-based Motorola's handset division has been posting heavy losses for the last few years. Brown has controlled the unit directly since early this year. Stu Reed, its last president, left the company in March.
Also in March, Motorola said it would split the cell phone division from the ones that make TV set-top boxes, cable modems, police radios and other telecommunications gear.
The handset unit had a smash hit with the Razr phone in 2004 and 2005, but has been unable to produce an equally popular follow-up. However, Motorola last week announced that it had reversed a trend of declining sales and shipped 28.1 million cell phones in the second quarter, up from 27 million in the first.
Motorola executives have emphasized the complex nature of the spinoff, saying that the handset unit shares 150 facilities with other divisions, and analysts have questioned whether it's worth the expense. Last week, Motorola said the process should be complete by the third quarter next year.
Jha will receive 3.7 million restricted Motorola stock units, worth approximately $35 million at Monday's stock price, and options to buy 16.6 million shares. If the spinoff of the handset division is completed, those awards would apply to the new company's stock, and Jha would receive additional stock and option awards to give him a 3 percent stake in the company.
If the spinoff does not happen before Oct. 31, 2010, Jha will get $30 million in cash.
At Qualcomm, executive vice president Len Lauer, formerly the chief operating officer of Sprint Nextel Corp., replaces Jha as COO. Jha's position as president of Qualcomm CDMA Technologies, or QCT, will be filled by the executive vice president of the unit, Steve Mollenkopf.
Jha will also be co-chief executive of the parent company, sharing the responsibility with incumbent Greg Brown until the spinoff next year. Brown will take responsibility for Motorola's other two divisions.
Motorola shares rose $1.01, 11.5 percent, to $9.82 Monday.
Brown said Jha "brings a whole host of different ingredients to the table," including customer relationships, technical expertise and leadership abilities.
Jha, 45, has a doctorate in electronic and electrical engineering. In addition to being Qualcomm's chief operating officer, he was president of the Qualcomm division that made chips for cell phones.
Analysts uniformly praised the appointment.
"We are hard-pressed to imagine a better candidate than Dr. Jha," said Citigroup analyst Jim Suva.
Goldman Sachs analysts Simona Jankowski and Thomas Lee called it "a big win" for Motorola and a loss for Qualcomm.
"We believe he is very well respected both in industry and in the investor community," the analysts wrote. "From Motorola's perspective, we expect this will improve the company's competitive positioning."
Qualcomm shares fell $2.60, or 4.7 percent, to end at $52.87.
Schaumburg, Ill.-based Motorola's handset division has been posting heavy losses for the last few years. Brown has controlled the unit directly since early this year. Stu Reed, its last president, left the company in March.
Also in March, Motorola said it would split the cell phone division from the ones that make TV set-top boxes, cable modems, police radios and other telecommunications gear.
The handset unit had a smash hit with the Razr phone in 2004 and 2005, but has been unable to produce an equally popular follow-up. However, Motorola last week announced that it had reversed a trend of declining sales and shipped 28.1 million cell phones in the second quarter, up from 27 million in the first.
Motorola executives have emphasized the complex nature of the spinoff, saying that the handset unit shares 150 facilities with other divisions, and analysts have questioned whether it's worth the expense. Last week, Motorola said the process should be complete by the third quarter next year.
Jha will receive 3.7 million restricted Motorola stock units, worth approximately $35 million at Monday's stock price, and options to buy 16.6 million shares. If the spinoff of the handset division is completed, those awards would apply to the new company's stock, and Jha would receive additional stock and option awards to give him a 3 percent stake in the company.
If the spinoff does not happen before Oct. 31, 2010, Jha will get $30 million in cash.
At Qualcomm, executive vice president Len Lauer, formerly the chief operating officer of Sprint Nextel Corp., replaces Jha as COO. Jha's position as president of Qualcomm CDMA Technologies, or QCT, will be filled by the executive vice president of the unit, Steve Mollenkopf.
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