His Locks Grow Longer

At a meeting of Motorola Inc. executives in May 2000, Patrick Canavan loudly announced that he wouldn’t cut his hair until the company’s share price matched its all-time high of about $60 reached earlier that year. (The figure reflects a subsequent stock split.) Growing a ponytail represented “a symbol of confidence in the company,” recalls Mr. Canavan, then its senior vice president for corporate governance.

Nearly eight years later, Motorola shares are languishing more than 80% below Mr. Canavan’s target. He’s twice lowered the goal, and employed some financial hair-splitting to avoid shears. When it’s wet, his hair now stretches halfway down his back.

Mr. Canavan first lowered his goal to $28 in 2003. With Motorola’s stock around $23 in September 2005, Mr. Canavan agreed, at the urging of then-Chief Executive Edward Zander, to reduce the target again, to $25. He announced the change in an email to Mr. Zander, titled “Hair Today, Gone Tomorrow.”

When Motorola shares topped $25 several times in early fall 2006, Mr. Zander says he walked into Mr. Canavan’s office and declared, “C’mon, we gotta go cut your hair.” The CEO threatened to fetch a ladder and let colleagues take turns snipping the tail.

Mr. Canavan balked. “It did not feel right to grow hair for almost seven years, then cut it” after a short-lived stock-price bounce, he says. In another email, he assured Mr. Zander that he would fulfill his pledge if Motorola’s share price stayed above $25 through its Jan. 19, 2007, release of full-year earnings. But Motorola’s stock plunged in early January after the company said it would miss profit targets.

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