Motorola's No. 2 to Resign, Seek New Job

CHICAGO – Motorola Inc. (MOT) on Wednesday said its No. 2 officer, who had been passed over for the chief executive post, will resign at the end of January to seek a top spot with another company.

President and Chief Operating Officer Mike Zafirovski (search), 51, was credited with turning around Motorola's mainstay handset business after joining the company in June 2000 to head its personal communications sector.

But he was passed over for the CEO post in favor of Edward Zander (search), a former Sun Microsystems Inc. (SUNW) executive who took over at the telecommunications equipment maker in December 2003 after the departure of Christopher Galvin.

Motorola said it will not fill the COO post, and Zander will assume Zafirovski's duties.

Wall Street appeared unfazed by the announcement, which analysts said came as little surprise. Motorola's shares remained mostly steady, dipping 4 cents to $16.60 on the New York Stock Exchange (search).

"He (Zafirovski) is the person who is probably most responsible for returning Motorola to the glory days of mobile-phone dominance, but he was not given the CEO spot, which I think he felt he deserved," said Albert Lin, an analyst with American Technology Research.

"Even though he did a tremendous job turning around PCS, the board felt they needed somebody who could turn around other businesses that were weak," Lin said. "At that point, that would have been semiconductors and the broadband communications group."

Motorola, the No. 3 maker of mobile handsets, has been working to retool its image by gaining traction with upscale phones such as the newly introduced Razr V3. It recently spun off Freescale (FSL), its semiconductor business, and realigned its four business groups.

Motorola said Zafirovski will assume an advisory role to the company following his departure, but he will not stand for re-election to Motorola's board in May.

"They (Zander and Zafirovski) both have carefully considered the timing and believe that this is the right time," said company spokeswoman Jennifer Weyrauch. "It is well-known that Zafirovski was a candidate for the chairman and CEO position."

Zafirovski, a former General Electric Co. (GE) executive, "would like to pursue a CEO position and understands it is not achievable at Motorola for some number of years," she said.