Beleaguered “Research In Motion Ltd. will pay former co-chief executives and co-chairmen Jim Balsillie and Mike Lazaridis close to $12 million combined as part of their exit from the top posts at the company,” Christine Dobby reports for The Financial Post.
“The company said in a filing with the U.S. Securities and Exchange Commission Thursday that it reached transition agreements with the two as part of their resignations as co-CEOs and current chief executive Thorsten Heins` assumption of the role in January,” Dobby reports. “The total value of the ‘entitlements’ under the agreement with Balsillie was $7.93 million, RIM said.”
Dobby reports, “The value of Lazaridis` entitlements, including the value of the future acceleration of unvested restricted share units, is $3.96 million… Lazaridis remains on the board but Balsillie resigned from his role as a director on March 29.”
Read more in the full article here.
MacDailyNews Take:
Neither of them could do half of a single job properly, but… ahh, aren’t golden parachutes grand?
DCW’s Board: “Uh, okay, here’s $12 mill for failing in abject fashion. Now, back to the central question, why does the Ty-D-Bol Man keep sailing by us with ever-increasing frequency?”
Contractual golden parachutes should be illegal. Pay for performance. If you do well and just decide that it’s time to leave, the Board can reward you how they see fit.
But if it’s in your contract that, no matter how poorly you do, you’ll get a parting gift, that’s just wrong.
Here we have a company that has laid off thousands and is in its death throes having to pay $12 million to the guys ultimately responsible for it. If I were a RIM shareholder, I’d ensure that anyone on the Board who first approved the contractual golden parachute will be in for the fight of their lives when their seat comes up.
And why are the CEO’s on the Board? Conflict of interest much?
They’re an executive board member. That’s required. It would be difficult for a board to work without the highest executive in the company not being on it.
What isn’t usually mentioned it that Laz isn’t just remaining on the board, he’s also the vice chairman, and the head of a major committee, though I forget which one right now. He therefor still retains a lot of influence at RIM.
But, but, but . . . . . the free market can do no wrong!
Obviously, these deserving CEO’s are all a creation of the dreaded evil big government!
Seriously though, I would be happy to have a job for a mere 50k a year where I would receive full compensation including retirement even if I failed miserably at the job.
There are two sets of rules for people in the USA today.
A common man robs a Quickie Mart, he suffers the force of the law. A banker loots the nation, the Law and many of The People look the other way.
As through this world I’ve rambled,
I’ve seen lots of funny men.
Some will rob you with a six-gun,
and some with a fountain pen.
As through this world you ramble,
and through this world you roam,
you will never see an outlaw
drive a family from their home.
— Woodie Guthrie.
They can easily close down another one of their factories to offset this payout. It’s not that much of a big deal.
For once, MDN, I think your take is too kind.
“…including the value of the future acceleration of unvested restricted share units, is $3.96 million.”
That a board would do anything around the future potential value of unvested RSUs boarders on fiduciary malfeasance. RSUs and other financial tools are created to vest over time expressly to reward the recipient for continued participation and contribution to the company. Like the incentive stock options they replace, their goal is to reward an employee for continuing on *as the stock rises.* A company in RIMM’s condition shouldn’t be giving away future stock valuation to someone who is departing. When that individual is arguably one of the two who created the declining stock value, it’s hard to understand why the company would accelerate anything other than their departure.
Shareholders are regularly asked to approve new incentive compensation programs for the company to use in recruiting and retaining top talent. This kind of abuse of the trust behind those votes is what fuels the “corporations are bad guys” attitude causing restlessness among the non-members of “the one percent.”
Because the CEO invites the board members or has significant influence over addition to and remaining on the board, you get the board acting in the CEO’s interest and not the shareholders interests.
Shouldn’t they be paid in stock?
Thanks MDN for the take, a very nice chuckle this morning.
I do need to elaborate on my entry above. This case does concern A Canadian company. This goes to show that economic elitism and double standards are not unique to the USA. IMHO it is a global condition, not that some nation somewhere couldn’t break precedent. Governments after all are the only organization that can establish and guard sovereignty. Trans national plutocratic oligarchy is beating down governments an nations’ sovereignty everywhere.
In your defense, this report was based on US SEC filings.
So, in the months before they left, when they publicly announced that they were both taking $1 salaries, they knew they would get paid back on the back end? Amateurish.
And here I thought amateur hour was over.
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