SAN DIEGO - Qualcomm CEO Steve Mollenkopf and other top executives received one-time stock awards worth millions for settling the bloody legal dispute with Apple last month.
In a filing with federal securities regulators on Friday, Qualcomm disclosed that the Compensation Committee of its Board of Directors granted Mollenkopf stock worth $3.4 million "in recognition for outstanding efforts" in achieving a patent license and smartphone chip supply settlement with Apple.
Qualcomm President Cristiano Amon, Chief Technology Officer James Thompson, Corporate Counsel Don Rosenberg and Interim Chief Financial Officer David Wise also received stock grants.
"In making these grants, the Compensation Committee considered the anticipated long-term stockholder value resulting from these agreements with one of the company's key customers," according to the regulatory filing.
A Qualcomm spokesperson declined to comment. Regular employees also are expected to benefit from the end of legal hostilities with Apple.
During its March quarter earnings conference call, Qualcomm executives said the company would spend roughly $100 million in the June quarter to beef up its employee cash bonus fund due to the return of Apple's business.
"For the remainder of fiscal 2019, we expect operating expenses to increase primarily as a result of higher employee cash incentive program costs as a result of the settlement, partially offset by lower litigation costs," said the San Diego mobile technology firm.
Typically, Qualcomm's rank and file workers receive bonuses annually based on performance. The increased employee bonus accrual is separate from the stock awards that Mollenkopf and other top executives received, according to the company.
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Qualcomm and Apple ended their global legal war on April 16 just as opening statements wrapped up in a key jury trial between the companies in San Diego federal court.
Terms of the deal are confidential, but Apple agreed to pay up to $4.7 billion in catch-up patent royalty fees to Qualcomm, signed a six-year patent license agreement and entered into a multi-year chip supply deal with Qualcomm, paving the way for 5G iPhone next year.
The fight with Apple had taken a toll on Qualcomm's patent licensing revenue and stock price. Since the settlement, Qualcomm's shares have soared 47 percent.
The company's Compensation Committee gave Mollenkopf 40,794 shares. The stock vests immediately – meaning Mollenkopf can sell the stock at any time.
Amon received shares valued at $2.1 million. Thompson's stock is worth $1.6 million, and Rosenberg's come in at $1.2 million based on Monday's closing price. Wise, who took over as interim CFO last month, received stock worth $248,000.
Last year, Mollenkopf's cash salary and bonus totaled $3.6 million. He also received about $16 million in stock grants. The exact value of these shares won't be known until they vest in a few years, however, and some of the grants will be forfeited if performance milestones are missed.
Qualcomm's shares ended trading down 2.3 percent at $83.89 on the Nasdaq exchange.
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