Good afternoon and welcome, everyone. We appreciate your personal attendance and are delighted to welcome you to this annual meeting of Motorola Solutions stockholders. I'm going to begin by introducing my fellow director nominees, then Louis Steverson will preside over the formal business of the meeting. Then finally, I'll rejoin you to walk through our results and some plans for the future.
As I introduce the other director nominees, I ask each of them to stand up for a moment as I call their name. Mr. William Bratton is the Chief Executive Officer of the Bratton Group and was formerly Chairman of Kroll and Chief of the Los Angeles Police Department. Ken Dahlberg is the former Chairman of the Board and CEO of SAIC and currently serves on the board of Teledyne Technologies Incorporated.
David Dorman is the Lead Independent Director of Motorola Solutions, the Chairman of the Board of CVS Caremark Corporation, serves on the board of Yum Brands, and was formerly Chairman and CEO of AT&T. He also chairs our board's Compensation and Leadership Committee. General Michael Hayden is a principal at Chertoff Group and was formerly the Director of the Central Intelligence Agency. Judy Lewent is the former EVP and CFO of Merck and currently serves on the boards of GlaxoSmithKline and Thermo Fisher Scientific. She also chairs our board's Audit Committee.
Ann Pramaggiore is the President and CEO of Commonwealth Edison and currently serves on the board of the Babcock & Wilcox Company. Samuel Scott III is the former Chairman, President, and CEO of Corn Products International and currently serves on the boards of Abbott Laboratories and Bank of New York Mellon. He also chairs our board's Governance and Nominating Committee.
Brad Singer is a partner at ValueAct Capital and is the former Senior Vice President and Chief Financial Officer of Discovery Communications. Dr. John White is a Distinguished Professor of Industrial Engineering and was formerly the Chancellor of the University of Arkansas, and he currently serves on the board of J.B. Hunt Transport Services. So now, for the formal business of the meeting, I'd like to introduce Motorola Solutions General Counsel and Board Secretary Louis Steverson, who will serve as today's presiding stockholder meeting chair. Louis.
Thanks, Greg, and good afternoon. We'll now attend to the formal business of the meeting, after which Greg will come back and give the company a report. Following his remarks, the floor will be open for our general question and answer period. Representatives of KPMG, the company's external auditors, are also present and available to answer questions during the Q&A period. A printed program, which was handed to you when you came in, sets forth today's agenda and the procedures we will follow. If you do not have a copy of the program, please raise your hand as the ushers have copies available. Now, in accordance with the notice of this meeting, I call the 2013 Annual Stockholder Meeting to order, and we will now attend to the formal business matters.
The proposals will be considered in the order presented in the proxy statement and on the agenda, beginning with the election of the directors. As a reminder, the items as set forth in the proxy statement are the only items of business that can be transacted at this meeting. As we go through the agenda, any stockholder who wishes to comment on a specific proposal may do so only at the time provided for comments on that proposal.
Please limit your comments to the proposal then before the meeting. After transaction of the formal business and the Chairman and CEO's presentation, there will be a general Q&A period. If you wish to comment on a proposal, please approach the microphone at the appropriate time. When recognized, please give your name. As a matter of courtesy to the other stockholders, please limit your comments to two minutes.
There is also a total time limit of 10 minutes for the presentation and comments regarding each proposal under consideration. These and other meeting procedures appear in the back of the agenda you received. It's my job to enforce those procedures, providing everyone with a fair opportunity to participate in the meeting at the appropriate time. Thank you in advance for your cooperation. This meeting is being held pursuant to a notice mailed on or about March 18, 2013, to each stockholder of record at the close of business on March 8, 2013. A list of the stockholders entitled to vote at this meeting has been available for the past 10 days and is available at this meeting for inspection. I'm pleased to report that 239,783,845 shares of the 272,311,256 shares outstanding and entitled to vote are represented here in person or by proxy at this meeting.
That's 88% of the outstanding shares and represents a quorum for the purpose of this meeting. We are a Delaware corporation, and under Delaware law, I am required to announce the time of the opening and closing of the polls for each matter to be voted upon. So at 5:09 P.M. on May 6, 2013, I now declare the polls open for all matters of business. The polls will remain open until all items have been presented and discussed. If there are any stockholders present who have previously voted and now wish to revoke their vote, or if there are any stockholders present who have not yet voted and wish to vote, they may do so at this time. Please raise your hand, and we will collect your votes or give you a ballot.
If your broker or the registered holder of your shares provided you with a legal proxy evidencing your right to vote, please be sure to turn that in with your ballot. You may vote until I announce that the polls are closed. We intend to close the polls following the introduction and discussion of all items of business as set forth on the agenda. The first matter to be acted upon is the election of directors for a one-year term. I hereby nominate as directors for the ensuing year or until their successors are duly elected and qualified the board's 10 nominees that were listed in the company's proxy statement provided to all stockholders. They are Gregory Q. Brown, William J. Bratton, Kenneth C. Dahlberg, David W. Dorman, Michael V. Hayden, Judy C. Lewent, Ann R. Pramaggiore, Samuel C. Scott, Bradley E. Singer, and John A. White. Do I have a second?
I second the motion.
Does any stockholder wish to make a comment directly related to the election of directors? Please remember our time limits. There being no further comments on the topic now before the meeting, we'll move on to the next matter. The next matter to be acted upon is the non-binding advisory vote to approve the company's executive compensation. The resolution provided in the proxy statement to be acted upon states, "Resolve that the stockholders approve on an advisory basis the compensation of the named executive officers as described in the compensation discussion and analysis, the 2012 summary compensation table, and other related tables and disclosures in this proxy statement." Is there a second?
I second the motion.
Does any stockholder wish to make a comment directly related to the stockholder advisory vote on executive compensation? There being no comments on the topic now before the meeting, we'll move on to the next matter. The next matter to be acted upon is the ratification of the appointment of KPMG as the company's independent registered public accounting firm for 2013. The audit committee of the board has appointed KPMG as the company's independent registered public accounting firm for 2013. This appointment is now formally submitted for stockholder ratification. Is there a second?
I second the motion.
Does any stockholder wish to make a comment directly related to the ratification of the appointment of KPMG LLP as the independent registered public accounting firm for 2013? There being no comments on this topic, on the topic now before the meeting, we will move on to the next matter. This year's proxy statement contains a stockholder proposal which the stockholder has entitled, "Encourage suppliers to publish an annual sustainability report." I will now recognize the sponsor of this resolution who may introduce this proposal, make a brief supporting statement, and make a motion for adoption of this proposal. The proponent should limit her remarks to five minutes. In addition, please remember that a total of 10 minutes will be allowed for all speakers on this topic. Just one second. Your mic's not on. Her mic's not on.
I'm presenting Proposal 4 on behalf of the Comptroller of New York City, John Liu, and the Boards of Trustees of the New York City Pension Funds. Proposal number 4 calls on the board of directors to require the company's key supplier to publish an annual sustainability report. As long-term investors, the funds believe the global integration of sustainability into business strategies and cultures is essential to protect and enhance long-term shareholder value. We also recognize that the difficulty of implementing across supply chains represents the top barrier to the full integration of sustainability. This raises significant concerns for shareholders given that human and worker rights abuses can occur in a company's supply chain, creating legal, reputational, and operational risks.
That is why the funds proposal calls on the board of directors to require the company's key suppliers to publish an annual, independently verifiable sustainability report using the Global Reporting Initiative guidelines. Among other important disclosures, a report would include a supplier's objective assessment and measurement of performance on workplace safety and human and worker rights using internationally recognized standards, indicators, and measurement protocols.
In addition, a report would include incidents of non-compliance, actions taken to remedy those incidents, and measures taken to contribute to long-term prevention and mitigation. Over the past two years, the New York City Comptroller's Office has reached agreements with seven major technology companies, including Apple, Microsoft, Hewlett-Packard, and Intel. All of these companies are taking meaningful steps to encourage or require key suppliers to report on their sustainability performance using GRI.
In some cases, the companies provide guidance to suppliers who need assistance, show preference to suppliers who meet or exceed expectations, and include web links to their supplier sustainability reports. Motorola Solutions is the only major technology company that has resisted the Comptroller's request. In its opposition statement, the company cites its on-site supplier audits. We agree that independent supplier audits are essential, but they are insufficient. As Motorola explained in announcing its plan I'm sorry, as Microsoft explained in announcing its plan in October 2011 to require sustainability reporting from key hardware vendors, the new reporting mechanism complements and strengthens Microsoft's existing auditing and assurance programs, which include third-party monitoring of its contract hardware manufacturers. The reporting requirement will also drive sustainability improvements in Microsoft's supply chain.
In summary, requiring suppliers to prepare annual sustainability reports using GRI guidelines that the company itself uses for sustainability reporting would strengthen the company's ability to assess its suppliers' performance and hold them accountable, enable shareholders to better understand and assess potential reputational and/or operational risks, and consistent with the principle that what gets measured gets managed, prompt more responsible business practices by suppliers. We urge shareholders to vote for this proposal. Thank you.
Thank you. For the reasons stated in the company's proxy statement, the board of directors recommends that you vote against the adoption of the stockholder-submitted proposal. Is there a shareholder who wishes to second this proposal to put it to a vote of the stockholders?
Does any shareholder wish to make any further comments directly related to this proposal? There being no further comments on the topic now before the meeting, we'll move on to the next matter. There's just one remaining item of business to address, and the polls will close shortly. If you are voting by ballot and have completed your ballot, you may raise your hand, and your ballot will be collected.
This year's proxy statement contains a second stockholder proposal which the proposing stockholder has titled, "Political Disclosure and Accountability." I will now recognize the sponsor of this resolution who may introduce this proposal, make a brief supporting statement, and make a motion for adoption of this proposal. The proponent should limit his remarks to five minutes. In addition, please remember that a total of 10 minutes will be allowed for all speakers on this topic.
Thank you. Good afternoon, Mr. Chairman, members of the board, fellow shareholders. My name is Saul Shapiro, and I'm here representing shareholder Michael Loeb, who has requested I appear on his behalf. Mr. Loeb is a member of the Responsible Wealth Project, of which I am also a member. On behalf of Mr. Loeb and the Responsible Wealth Project, I'm here to move proposal five, seeking to establish greater accountability and transparency in our company's political spending.
The sponsors of this proposal, together with numerous other mainstream investors, consider disclosure of political expenditures made with corporate funds and payments to third-party groups to be an important board accountability issue and a new standard in good governance. As everyone in this room is well aware, public attention and scrutiny of political contributions made by companies has reached a new level of intensity in this country.
Business and labor interests donate increasing amounts of money to influence U.S. political campaigns, especially after the Citizens United decision. Companies can make political contributions directly or indirectly through third parties, such as trade associations, often with unlimited amounts. According to a 2008 poll by Mason-Dixon Polling & Research, two-thirds of corporate directors said that the recent corporate scandals involving political activities have damaged the public's confidence and trust in corporate America. 60% agreed that reforms were necessary to protect companies from risk. Corporate political spending can embarrass companies and create serious risks for shareholders.
As the New York Times reported, "In the wake of the Jack Abramoff scandal, greater political activism by trade groups and demands by candidates and causes for corporate monies, boards are now seeing that their corporate image could be tarnished if these contributions or political activities go awry." There's an effective solution to this lack of accountability, and that is disclosure. Justice Kennedy supported this idea in his decision in the Citizens United case. Through disclosure, he said, "Shareholders can determine whether their corporation's political speech advances the corporation's interest in making profits, and citizens can see whether elected officials are in the pocket of so-called moneyed interests." We acknowledge that Motorola Solutions has published a policy statement on corporate political contributions on its website.
However, even though our company discloses that it spent $749,500 in state and local political contributions in 2012, it does not indicate how much was given to whom or for what cause. In addition, even though our company provides on its website a list of trade associations to which it belongs, it does not say how much was given to each or how much of its dues or special assessments were used for political purposes. Importantly, the company is also silent on the use of corporate funds to support 501(c)(4) groups, which have become a major provider of dark money in our political campaigns. These so-called social welfare groups, which are organized under Section 501(c)(4) of the IRS tax code, routinely make independent expenditures or fund other political groups while not having to disclose any of their donors.
It's virtually impossible to obtain a full accounting of corporate political spending from public sources. The only way to get a full picture of Motorola Solutions' contributions is for the company to publicly disclose them. More than half of the S&P 100, top 100 companies of the S&P, and 117 U.S. companies overall have adopted disclosure of their political spending and implemented board oversight, including Merck, Microsoft, Aflac, and Exelon Corporation .
Disclosure of political spending from corporate funds has become a mainstream good corporate governance practice. We are therefore asking Motorola Solutions to disclose all of its corporate political spending so that the shareholders and our board can appropriately evaluate and mitigate risks associated therewith. Motorola's board of directors has a fiduciary duty to ensure that the company's assets are being used to further the long-term interests of the firm.
When Motorola Solutions helps to finance the political activity of a trade association or other politically active tax-exempt organization or uses company funds for political contributions, it's appropriate for the board to question what policies are being furthered and whether they are in the company's best interest. Without an effective system of reporting, our board cannot assess whether these expenditures present unacceptable risks. So full public disclosure is important for both the shareholders and the board. For all the reasons, we urge shareholders to vote for proposal five, seeking greater accountability and transparency in the company's political spending. Thank you.
Thank you, Mr. Shapiro. For the reasons stated in the company's proxy statement, the Board of Directors recommends that you vote against the adoption of this shareholder-submitted proposal. Is there a shareholder who wishes to second this proposal to put it to a vote of the stockholders?
Does any stockholder wish to make any further comments directly related to this proposal? There being no further comments on the topic now before the meeting, we'll move on. There are no other matters that may be properly voted on before this meeting, and I ask that you complete your ballots at this time. All ballots will now be collected. If you've not already done so, please raise your hand, and your ballot will be collected. I now declare the polls closed at 5:25 P.M. on Monday, sorry, on May 6th, 2013. I will now read the results of the items acted upon at today's meeting. Based on the preliminary count, as reported by the inspector of election, it appears that a majority of the shares voted in person or by proxy at this meeting were voted for the election of each director.
Based on the shares voted in favor of the nominees, as reported by the inspector, I declare that the 10 persons who have been nominated for election have been duly elected as the directors of the company, each to hold office for the terms specified in the company's bylaws. Based on the preliminary count, as reported by the inspector of election, approximately 68% of the votes cast were voted for the approval of the company's executive compensation. Based on the shares voted in favor, as reported by the inspector, I declare that the non-binding advisory vote to approve the company's executive compensation has been approved by the shareholders. Based on the preliminary count, as reported by the inspector of election, approximately 99% of the votes cast were voted for the ratification of the appointment of KPMG LLP.
Based on the shares voted in favor of the ratification, as reported by the inspector, I declare that the ratification of the appointment of KPMG as the company's independent registered public accounting firm for 2013 has been approved by the stockholders. With respect to the stockholder proposal regarding encouraging suppliers to publish an annual sustainability report. Based on the preliminary count, as reported by the inspector of election, approximately 5% of the votes cast were voted for the resolution on encouraging suppliers to publish an annual sustainability report.
Based on the shares voted in favor of the proposal, as reported by the inspector, I declare that the stockholder proposal regarding the resolution on encouraging suppliers to publish an annual sustainability report has not been approved by the shareholders. With respect to the stockholder proposal regarding political disclosure and accountability.
Based on the preliminary count, as reported by the inspector of election, approximately 22% of the votes cast were voted for the resolution on political disclosure and accountability. Based on the shares voted in favor of the proposal, as reported by the inspector, I declare that the stockholder proposal regarding the resolution on political disclosure and accountability has not been approved by the shareholders. We will be reporting the official results of the stockholder vote with respect to each proposal on a Form 8-K within four days of this meeting. I now declare the formal portion of the meeting adjourned. It is now my pleasure to turn the meeting back over to our Chairman and CEO, Greg Brown, who will report to you on the company's business.
So I would like to share with you just for a couple of minutes the state of the business. And coming out of last year, we finished the year just under $9 billion. Actually, the Fortune 500, I think, came out this week. Motorola Solutions is ranked 304th in the Fortune 500. And you may recall we broke up Motorola. We spun off the Motorola Mobility portion of the business. So we remained Motorola, Inc., now Motorola Solutions, turned 85 years old in September. I think we're very well positioned. We have employees in 62 countries, do sales in over 100 countries. We have a strong IP portfolio. And in the business areas and the major markets that we serve, whether it's public safety or professional and commercial radio, enterprise mobile computing, or barcode scanning, we're number one in the world.
Last year, we had a very good year, a record year. Revenues were up 6%. Gross margins remained strong and north of 50%. Our cost structure, that BGM, is below gross margin as a percentage of revenue. That ratio continued to improve. From an operating margin standpoint, we expanded that from 16.7%-17.3%. We did a very robust job in capital allocation, returning cash and capital back to the shareholders. We initiated, after the separation, we initiated our dividend in July of 2011. In July of 2012, we increased the dividend 18%. We paid out $270 million to dividends back to the shareholder. This represented approximately or within the 30% of operating cash flow in the form of a dividend payout and was consistent with the capital allocation framework that we set in place a while ago.
At the same time, we increased our share repurchase program by $3 billion since inception. Again, this is back to July of 2011 when we announced the beginning of the share repurchase program. Through the end of last year and since its inception, we've repurchased $3.5 billion at a price of $46.57. Today, we trade roughly at about $57, and we've reduced the net shares by 20%. We also took advantage of the debt markets by doing a $750 million debt issuance this year at a very attractive coupon rate of 3.75%. It's also worth noting that since inception, your company's stock is up 59% over a comparative period with 28% with the Dow and 27% with the S&P. So very strong stock appreciation in the two years since separation.
But more than just financial results, we're a company that takes very personally the opportunity to give back to the community. We've had our Motorola Solutions Foundation in 2012 gave back $14.7 million. We had employees add another $1.6 million in giving back in a number of examples, which you see there, primarily STEM, science, technology, engineering, math, public safety and security grants, disaster relief, and the like. And our employees in the foundation gave back to people in over 37 countries to approximately 700,000 students, teachers, first responders, and community members. So I think, in summary, the firm is very well positioned. We remain the leader in the primary markets that we serve.
We have the most comprehensive product and solutions portfolio, which we continually refresh and spend about $1 billion a year in research and development every year, as well as issuing new patents to protect the intellectual property foundation by which innovation is the bedrock of this company. We have a great value proposition with customers both on the government side with public safety as well as our enterprise customers, both of which in tight times want strong return on investment for their capital spent. We remain confident of the long-term growth prospects of the company. In addition to being 304th in the Fortune 500, we were also in the top companies in our group in the networks and communications category of the most admired firms. We were number four, up from number seven the previous year.
Then over the weekend, in case you may have not seen it, Barron's published the Barron's 500. They look at their category as cash return and sales growth over the last three years. We were 215th. We moved up to 95th. So we're proud of the fact that in addition to being one of Fortune's most admired companies, we're now in the Barron's 100. There's a lot of work to be done, but we remain optimistic and up to the task to continue to expand and generate shareholder value on your behalf. So with that, I would open it up for questions and be happy to talk about whatever questions or topics that may be on your mind. Having no questions, I'd like to thank you all for participating in the shareholder meeting, investing in our company, attending this afternoon, and travel safe back home. Thank you for coming.
Ladies and gentlemen, that concludes our 2013 annual meeting of stockholders. Thank you for your attendance and your ownership of Motorola.