RIM’s Former CEOs Get $12 Million Payout For Leaving
Back in January Research In Motion – the struggling makers of the BlackBerry smartphone platform – appointed Thorsten Heins as the company’s new president and CEO. Heins replaced former co-CEOs Jim Balsillie and Mike Lazaridis. As part of that succession plan – reportedly proposed by Balsillie and Lazaridis themselves – Balsillie retained a seat on RIM’s board while Lazaridis became the vice-chair.
The move wasn’t enough to save the struggling company, though, and in March they released a dismal quarterly earnings report, and announced the departure of several top executives. Among them was Balsillie, who surrendered his place on RIM’s board of directors. Even so, RIM’s problems have continued, with the company’s stock hitting an almost ten-year low earlier this month.
Now it seems that the struggles of the company they founded were not sufficient incentive for Balsillie and Lazaridis to step down from their posts as co-CEO. According to a form 6-K document filed with the SEC earlier this week, the two were given a combined total of nearly $12 million as compensation for their departure.
According to the document, Lazaridis will continue to serve as vice-chair of RIM’s board, while he and Balsillie will receive a variety of compensations for their work as RIM’s co-founders and co-CEOs. The total value of Balsillie’s severance comes to $7,929,229, while Lazaridis’s comes to $3,956,056, for a total of $11,885,355. The document also provides RIM’s reasoning for so handsomely rewarding its co-founders:
Messrs. Lazaridis and Balsillie revolutionized the worldwide wireless industry with the introduction of the BlackBerry and forever changed how the world communicates. Under their leadership, the Company successfully navigated many challenges and quickly scaled to become a global company and industry leader with sales in over 175 countries and more than 17,000 employees worldwide. Over the last decade, the Company experienced tremendous growth, with annual revenues increasing from $294 million to just under $20 billion. Messrs. Lazaridis and Balsillie have also received many awards outside of the Company in recognition of their success and contributions to the Company, the broader mobile industry and Canadian business. These factors were taken into consideration by the Board in entering into the transition agreements. In addition, the transition agreements were entered into in recognition of Messrs. Lazaridis’ and Balsillie’s years of dedicated service and leadership as founders, Co-CEOs and Co-Chairs of the Company.
Interestingly, the transition agreements do not appear to have taken into account their role in the company’s current (dire) situation. While it’s absolutely true that RIM “forever changed how the world communicates,” it’s also true that RIM’s response to the rise of the consumer smartphone – i.e., the iPhone and Android – was consistently poor. The iPhone’s initial success and popularity was met with a mixture of scorn and smugness born of absolute conviction that the BlackBerry’s position at the top of the market was unassailable. Once RIM recognized its competition as a credible threat, its responses were a string of too-little-too-late devices that simply failed to measure up to what the iOS and Android platforms had to offer. While Balsillie and Lazaridis are absolutely deserving of recognition for how high RIM had climbed by 2007, they deserve just as much blame for how far RIM has fallen since then.