[mset]

those are stock option. you think those are cash? how are those the stock holder money? you made it seems like he took 50m out of the BB bank and paid him and every share holder have to contribute to it. those are reserved stock that are granted once its vested and hit the strike. how do stock holder lose money again? the only one gaining is Thors, but it does not affect the individual stock holder at all.

You clearly don't understand dilution, or how a stock option works. 'Reserved stock'?? Please don't talk about things which you know nothing about. It's misleading for others.

That $50MM comes directly out of the pocket of the owners. In a publicly traded company, the owners are the stock holders. The options are converted to common stock. Then there is usually a lock-up period before the shares can be sold into the market.

Secondly, not all of that $56MM (let's use the full amount) is derived from the exercise of options. Much of is it a cash payout.

It's fascinating that you think that gains derived from exercise come from...where, out of thin air?

[icedkermit]

read the reply i just gave to the other guy. yea, it is scary when invest in stock and have no idea what theyre talking about and make a thread about it.

once again, that is not called ripping off. he just suck at his job

if you are the employer and your employee worked 80 hours a week but he came out with some failed product, is he ripping you off?

@qcbarry25

This will be my last response to you. If you still don't understand the points I've made, then this topic isn't one you should be participating in. I working finance. This is what I do. I can't break it down much more than I have. Good luck to you.

[icedkermit]

As I see it there are two unfortunate issues at play here. One is that executives make a financial deal when they sign on with any large company and these are usually comprised of salary, bonuses, perks, etc. If he's far enough up the food chain, CEO as an example, he can also negotiate compensation should he resign or be fired. The money is usually going be a little different under either circumstance, if he walks he gets one amount if he's canned he gets another. Anyway, you can blame the Board for whatever deal was made with TH so if you really want to complain, and are a shareholder, you may want to bring your concerns to their attention.

The second issue is my pet peeve where the law does not allow for the jailing of executives, and politicians, for gross incompetence or misleading their customers (constituents in the case of lying politicians) but that's a different, though related, discussion.
.

I'm not sure I fully agree with the jailing part. In cases of fraud or gross negligence, which is easier to detect for corporations, jails times are handed out - probably not enough. Jeff Skilling, Bernie Ebbers, Condrad Black are good examples. I'm not accusing BlackBerry of fraud and I don't think jail is appropriate. The executives proposed a game plan, the Board approved it and for various reasons, the results have been very poor.

What I object to is the following:
1. Issuing of stock options at what was basically the low point of the stock. They have very little incentive to get back towards $30-$30/share. At a $10-$12 takeover price, the options are $3-$5 in the money and worth several million. The strike price should have been much higher than it was.
2. The $55 million pay package to TH upon a change of control. He should only get this if BlackBerry get's taken out at north of $25/share.
3. The bonuses were based on objectives that were unbelievably low. The fact that the BB10 rollout beat their target is pathetic. It was a disaster from every angle. No bonuses should be paid on that.

Don't get me wrong, I realize executives need to be compensated. And I'm not against multi-million dollar bonuses - but shareholders collectively should benefit from a materially higher stock price before that happens. These issues result from a very weak Board - probably another reason why Prem Watsa resigned. If he goes through with a bid, it will be very interesting to see who he keeps. My guess, very few. I'd personally like to toss Barbara Stymiest, David Kerr and Roger Martin out the door. None of them have any business being there.

[qcbarry25]

You clearly don't understand dilution, or how a stock option works. 'Reserved stock'?? Please don't talk about things which you know nothing about. It is misleading for others.

That $50MM comes directly out of the pocket of the owners. In a publicly traded company, the owners are the stock holders. The options are converted to common stock. Then there is usually a lock-up period before the shares can be sold into the market.

Secondly, not all of that $56MM (let's use the full amount) is derived from the exercise of options. Much of is it a cash payout.

It's fascinating that you think that gains derived from exercise come from...where, out of thin air?

actually you dont know what you are talking. those shares are set aside. you think company can just issue new shares out of no where?

[nabil114]

While I love my Z10 and I know there are thousands of very hard working BlackBerry employees, the BlackBerry executives have destroyed this company and I�ve lost all confidence in their ability to effectively run this company.
If you go through the management information form (page 39), you can see that the senior executives were granted several million dollars worth of options/RSU�s on October 1, 2012 at a price of $7.86/share. This is the price they have the option of paying for each share. At a 10-12 take-out price, not a bad deal.

As referenced elsewhere on the forms, Thorstein is up for a very nice payout � north of $50 million if there is a transfer of control � page 46 & 47.

If you look at page 36, it describes, it describes the components of how bonuses are calculated. As per their calculation versus results, the BB10 launch exceeded their target. Seriously � who came up with this and how low was their target. I�m all for executives getting paid very well when they create value, but come on. Shareholders have suffered, thousands of employees have lost their jobs and these guys are paying themselves like crazy.

Until the executives and board change, I�m done. Oh, and I�m definitely going to be at the AGM next year. I�m tired of all the softball questions the Board gets. I just hope the company lasts long enough...

I agree.

[qcbarry25]

@qcbarry25

This will be my last response to you. If you still don't understand the points I've made, then this topic isn't one you should be participating in. I working finance. This is what I do. I can't break it down much more than I have. Good luck to you.

u said ripped off. that is not ripping off. you just sound mad because he sucks at a ceo, thats all. you have yet made a clear point why you are getting ripped off if you are the share holder. also, you working in finance have nothign to do with this, because it doesnt show why you are getting ripped off.

[z10fido]

Who cares where it comes from , the money is pennies per share. And once the company is sold this paltry 55million will be a complete non factor to any investor. There will be many others in the company getting cheques. I doubt thor would have taken the job if there was no upside to a possible sale. In fact if anything it shows how the idea of a sale was long in the works hence the compensation package. If anything it's a small commission for a multi billion dollar sale anyways.

Posted via CB10

[w0lfgang]

Kris, you need to learn to read better, especially if you're going to be a moderator - a term that must be used loosely here.

I referenced the fact that I'm done with BlackBerry until the Board and the executives are changed. As a longtime shareholder of BlackBerry and general investor, I'm well aware of the risks involved. That's not what bothers me. Again, read my initial comment. What bothers me is the blatant, almost care free way in which they are compensating themselves while the investors, the people who own the company are suffering. Not to mention the several thousand people who have lost their jobs. Imagine you owned 100% of BlackBerry - would you have agreed to compensate the executives this way? It's the same thing as a shareholder. It's the Board's job to manage this. They're supposed to be working for the shareholders, not the executives. The fact that they've done as I reference above, undermines their credibility. If you don't understand this, that's fine, but don't leave ignorant comments.

Careful...you need to learn the rules
Moderators = cheeky/sarcastic comments are okie dokie!
Regular users who point out the hypocrisy = banned
Enjoy Crackberry!

[icedkermit]

Who cares where it comes from , the money is pennies per share. And once the company is sold this paltry 55million will be a complete non factor to any investor. There will be many others in the company getting cheques. I doubt thor would have taken the job if there was no upside to a possible sale. In fact if anything it shows how the idea of a sale was long in the works hence the compensation package. If anything it's a small commission for a multi billion dollar sale anyways.

Posted via CB10

Current market cap is $5.5 billion. Pay package is $55 million. It's 1% or $0.10 per share. Doesn't sound like much, but it's still my money.

[cathulu15]

Agree with op.

Sent from my GT-I9100M using Tapatalk 4

[z10fido]

That's what due diligence is for,when buying a stock always research. Nobody is taking your money all of a sudden this was done years ago

Posted via CB10

[mset]

actually you dont know what you are talking. those shares are set aside. you think company can just issue new shares out of no where?

Of course they can. What are you talking about? Listed companies issue new shares all the time, every day.

You really need to stop responding in this thread.

[icedkermit]

That's what due diligence is for,when buying a stock always research. Nobody is taking your money all of a sudden this was done years ago

Posted via CB10

Not true. Majority of options and $55 million pay package, $3 million one-time bonus were all agreed to this past year by the Board.

[z10fido]

Oh my mistake. Either way why is it news now. It must have been public record long before yesterday for anyone to see.

Posted via CB10

[icedkermit]

u said ripped off. that is not ripping off. you just sound mad because he sucks at a ceo, thats all. you have yet made a clear point why you are getting ripped off if you are the share holder. also, you working in finance have nothign to do with this, because it doesnt show why you are getting ripped off.

@qcbarry - I lied, I'm going to try one last time – because you seem like a nice guy!

BlackBerry currently has 525 million shares outstanding and they're each worth $10.50 in USD. So the total market capitalization is $5.5 billion. This however excludes options, restricted stock units (RSU's) and other shares executives are compensated with. Under most circumstances an executive will for example be granted 100 RSU's at exercisable at the prevailing share price. They will only be able to exercise these shares over 3 or 4 years. To keep the math simple, let's assume 4 years. So for the next 4 years, the executive will be able to sell 25 shares at whatever price the stock is trading at in the market. Obviously, they aren't going to sell if the price is lower than what they're paying. Upon a change of control, all RSU’s become vested, meaning they can be sold.

And this is where the ripping us off part comes in.

Let's assume somebody is going to buy BlackBerry. They don’t say I’m going to pay $10/share. Instead they calculate the value of the whole company and get to a value of say $5.5B, which is what the “value” of BlackBerry is today and results in a $10.50 share price. If a buyer paid this, me, as a shareholder would get less than the current price of $10.50 because automatically the RSU’s and options I refer to above vest and the outstanding shares of 525 million go up by another 18.5 million shares. The total share count becomes 543.5 million. We also need to subtract TH’s $55 million payout from the $5.5B price.

The simple math then is ($5,500 - $55) / 543.5 = $10.01/share or $0.49/share less than the current price.This is the amount they are ripping us off. The total price is $0.49 x 543.5 or about $265 million. That's the total dollar amount taken from shareholders. I’ve excluded the amount the Board is paying themselves for useless service, the cash portion of the bonuses that were paid this year and several other factors that would rip us shareholders off even more. Good luck to you.

[icedkermit]

Oh my mistake. Either way why is it news now. It must have been public record long before yesterday for anyone to see.

Posted via CB10

It becomes news now because 1) no one really reads the documents that companies issue and 2) BlackBerry has announced a strategic review and executive compensation then becomes an interesting topic.

[Javid Gozalov]

Interesting thread. I'll be monitoring this.

OP is right in everything btw.

Posted via CB10

[mset]

BlackBerry currently has 525 million shares outstanding and they're each worth $10.50 in USD.......automatically the RSU’s and options I refer to above vest and the outstanding shares of 525 million go up by another 18.5 million shares. The total share count becomes 543.5 million.....The simple math then is ($5,500 - $55) / 543.5 = $10.01/share or $0.49/share less than the current price.This is the amount they are ripping us off. The total price is $0.49 x 543.5 or about $265 million. That's the total dollar amount taken from shareholders.

Excellent explanation for those who don't understand how options work. Thanks.

[scribacco]

Kris - Nice cheeky response - you clearly didn't read what I wrote.

I have no issues with executives getting paid very well when they're creating value. In BlackBerry's case, you've had constant under performance for the past 3 or 4 years. Thousands of employees have lost their jobs and they issue themselves options exercisable at the lowest price point of the stock. This is offensive. They have no business paying themselves this way. We should all be offended by the fact that in their eyes, the BB10 launch went better than expected. It was a disaster. Sales are a flop. If you look at their financials, the only reason cash has gone up is because they've played with their working capital. They're taking longer to pay their bills, they're spending less on inventory and trying to collect their cash receivables quicker. Don't get me wrong, I'm glad they did it, but don't try to convince us that it's going to continue. It's not. It's something that they can only do once.

weren't all you guys clapping your hands and cheer for TH before BB10 release? BB users change opinions like the wind directions... ..if you are upset about their salary stop buying their products..
BTW. they do not award themselves options, the board of directors does.

[icedkermit]

weren't all you guys clapping your hands and cheer for TH before BB10 release? BB users change opinions like the wind directions... ..if you are upset about their salary stop buying their products..
BTW. they do not award themselves options, the board of directors does.

Please read my original post and rest of thread...

[tack]

They have to worry about retention as well. Options work well to retain people who get paid more for better future performance. Plus it takes execs a lot longer to get new jobs in most environments. Not saying it is right but these are factors.

[lnichols]

You are just now figuring out?

I got the idea when TH lied to the stock holders before the last ER, telling us how great the sales were going!

It cost me over $30,000!

Ouch. Sorry man!

Posted via CB10

[anon4226395]

You are just now figuring out?

I got the idea when TH lied to the stock holders before the last ER, telling us how great the sales were going!

It cost me over $30,000!

I am glad this has been brought up. This CEO is a systematic liar.

[qwerty4ever]

if you are the employer and your employee worked 80 hours a week but he came out with some failed product, is he ripping you off?

Damn straight Skippy.

[Jon Tessler]

it could be worse, you could be living here in the US, where our Government hasn't passed a budget in 4 years, but still manages to vote THEMSELVES a pay raise EVERY YEAR.

No one is "ripping" you off. these execs have entered into contracts with a publicly traded company for a certain pay and benefits package. it is just like when you or I go and join a company, we know what our pay and benefits are when we join. if we do not like them we don't take the job.

This is how big companies do business, complaining about it really won't change anything, because even if you are able to vote out the current execs, the next set will make the same deals.