Reasearch in Motion just cannot catch a break from the shareholders… There is a report circling around the interwebs that RIM is setting up to remove Mike Lazaridis and Jim Balsillie co-chairmen of the board. Back in July we told you how RIM had six months to show they need to have both the Co-CEO and chairman positions. Now the Financial Post is reporting the following:
The Waterloo, Ont.-based company agreed to the governance review last July to avoid a public confrontation at its annual general shareholders’ meeting. Northwest & Ethical Investments LP, which owns 2.6% of RIM’s stock, withdrew a shareholder proposal to adopt a policy that divides the roles of chair and chief executive and that the chair be independent after RIM agreed to assess its governance structure.
The widely anticipated report by the company’s independent directors is scheduled to be delivered by Jan. 31. The company’s full nine board members — including Messrs. Lazaridis and Balsillie — will also respond to the report’s recommendations within 30 days.
Sources say that the evaluation process currently under way at the company could result in a number of different options and that a final decision has not yet been made. However, sources say that Ms. Stymiest, 55, the former head of TSX Group Inc. and former chief operating officer at Royal Bank of Canada, is said to be in line to become the company’s first ever independent chair by the time the process ends in the weeks ahead.
When reached for comment Monday, a RIM spokesperson reiterated by e-mail that the committee is on track to give its recommendations by the end of the month, but did not comment on the possibility of a change in board leadership.
Messrs. Lazaridis and Balsillie have resisted past attempts to strip them of their dual roles. The company’s co-founders own 12% of RIM’s outstanding shares, making them second and third largest shareholders in the widely-held company where no one owns more than 10% of the stock.
The practice of separating the roles of chair and CEO is more common in Canada and the U.K., while U.S. companies have been less enthusiastic about adopting it. Until now, RIM has argued to retain the dual roles because the company trades in the U.S. as well as in Canada.
At the same time, RIM’s seven independent directors had been staunchly supportive of Messrs. Lazaridis and Balsillie and continue to be despite successive quarterly earnings declines, RIM’s evaporating share of the smartphone market, product delays and a precipitous drop in the company’s share price.
Shares of RIM fell 75% in 2011 as the company was beset by corporate setbacks, public relations gaffes and the largest round of layoffs in its history. Even the December announcement that Messrs. Lazaridis and Balsillie would be reducing their annual salary to $1 as a sign of good faith was met with criticism from analysts.
Much of the negative sentiment around RIM in 2011 was caused by the underwhelming launch and poor performance the BlackBerry PlayBook tablet computer, a device that was supposed to be RIM’s answer to rival Apple Inc.’s iPad. While some analysts expected RIM to sell several million PlayBooks in its first year, to date, RIM has sold only about 850,000.
As RIM’s decline picked up speed towards the end of the year, the company’s co-chief executive tandem remained steadfast that a plan to transition the company’s BlackBerry smartphones to a new operating system, one modeled on the QNX software that powers the BlackBerry PlayBook, would herald a turnaround for the company.
Although the first of the next generation BlackBerrys were expected to be released in the first half of 2012, RIM announced in December the first smartphones to run BB 10 won’t be available until the second half of 2012 at the earliest.
During a conference call in December, RIM’s leaders said the company plans to go on an aggressive marketing blitz in the first half of 2012 to reinvigorate the BlackBerry brand.