Mike Lazaridis and Jim Balsillie, who built Research In Motion Ltd. into a global smartphone giant before presiding over the company's long slide, will receive a payout of around $12-million after having stepped aside as co-chief executive officers in January, according to a company document filed on Thursday.
The two men resigned as co-CEOs and co-chairmen of RIM's board of directors in late January as Thorsten Heins was promoted to president and CEO of the Waterloo, Ont.-based smartphone company, which has ceded vast amounts of market share to Apple Inc. and other device makers using Google Inc.'s Android software.
The company has shredded more than 75 per cent of its value over the past year as it lost share and released unsuccessful products such as the BlackBerry PlayBook tablet. RIM's share price currently sits around $11, down from a 52-week high of $35 -- and certainly down from its heyday several years ago when it was worth nearly $150. RIM recently issued a warning for its next quarterly results due on June 28, said it has hired investment banks to review strategic options, and is said to be gearing up for a significant restructuring that will include thousands of layoffs.
Noting that Mr. Lazaridis and Mr. Balsillie "revolutionized the worldwide wireless industry with the introduction of the BlackBerry and forever changed how the world communicates," the company said in a management circular that it had entered into transition agreements with the two executives.
Mr. Lazaridis, who remains vice-chair of the board with responsibilities for innovation and still has the use of a dedicated office, as well as a company car with a driver, is to receive roughly $3.9-million in compensation.
Mr. Balsillie, who became an ordinary director in the January management shakeup but has since exited the company completely, receives entitlements totalling around $7.9-million.
RIM also said in the filing that one of its directors, Spanish telecom executive Antonio Viana-Baptista, is not standing for reelection and the company has put forward former Goldman Sachs managing director Timothy Dattels, who has experience investing in Asian markets, as a candidate.
The filing also details Mr. Heins's financial arrangements with RIM and the changes in compensation resulting from his promotion from chief operating officer to president and CEO of the company as it desperately tries to claw back market share and launch new BlackBerry 10 products designed to save the company in late summer of early fall.
Mr. Heins, who joined RIM several years ago after a long stint in senior roles at the top of the German conglomerate Siemens AG, received about $1.9-million in total compensation in fiscal 2011. His compensation increased with the promotion to about $10.2-million in fiscal 2012, according to the management circular filed on Thursday. Under the terms of his contract, if he is terminated "without cause or good reason" he is entitled to his total base salary and other forms of compensation for 24 months.
Karima Bawa, who resigned as RIM's chief legal officer recently, will receive a lump sum payment equalling roughly two years of her salary for "reasonable ongoing cooperation" with the company as it searches for a replacement. Ms. Bawa's total compensation, according to the management filing, was $2,614,800 for fiscal 2012.
The management circular also notes what has been obvious to many RIM investors: Total shareholder returns have been undeniably brutal. The filing notes that if one had invested $100 in RIM on March 3, 2007, on the Toronto Stock Exchange, that the value of that investment on March 3, 2012, would have been $25.49.