[bitek]

This all looks more and more like fraud imo. There are people who are about to get extra rich in expense of good hard working people, loyal customers. I just do not see now current Blackberry CEO ever had good intentions for Blackberry. Not with 55,000,000 just around the corner to cash in. Same is for the good "Samaritan"

TORONTO — Months before Fairfax Financial Holdings Inc bid US$4.7-billion for BlackBerry Ltd , Fairfax boss Prem Watsa played a role in securing a golden parachute worth as much as US$55-million for the smartphone maker’s chief executive, according to company filings.

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Watsa, Fairfax’s chief executive, joined BlackBerry’s board in January 2012 and was one of three directors charged in March with reviewing the compensation of the Canadian company’s chief executive, Thorsten Heins.

The three directors — Watsa, BlackBerry Chairwoman Barbara Stymiest and long-time board member John Wetmore — decided to boost Heins’ basic salary and incentive bonus, as well as sharply increase the size of the equity awards that he would receive if he loses his job in the event of a takeover.

The new contract that Heins signed in May tripled his compensation to an estimated US$55.6-million if there is a change of control at BlackBerry, up from US$18.9-million previously, according to a securities filing on May 21.

To be sure, the US$55.6-million figure is based in part on BlackBerry’s share price in early March, and the stock has fallen by more than a third since then, which may mean that Heins’ parachute would be worth less.

Still, Watsa’s role in deciding Heins’ compensation is drawing scrutiny from some pay experts after BlackBerry on Monday accepted a conditional buyout bid from a consortium led by Fairfax, a property and casualty insurer that owns almost 10% of the smartphone maker.

“(Watsa) was part of the committee that was negotiating this agreement. Did he anticipate that he would make some sort of offer to buy the company? I feel like that’s unlikely, but it’s impossible to know,” said Joe Sorrentino, managing director at executive pay advisors Steven Hall & Partners in New York.

Sorrentino added, “The only concern I would have is since they structured his compensation equity award so that it all is granted at the beginning … it is all getting captured in a change of control golden parachute, as opposed to if they did a more typical process” of granting equity awards annually.

When asked for comment on Thursday, a Fairfax spokesman said Heins’ compensation was reviewed and approved by the entire BlackBerry board.

Watsa stepped down from the board in August, citing a potential conflict of interest after BlackBerry announced a strategic review and sought a buyer. The Fairfax-led consortium aims to take BlackBerry private and give it time to rebuild away from Wall Street’s gaze.

A spokeswoman for BlackBerry said the company had no comment on Watsa’s role or Heins’ compensation, and Heins himself did not respond to a direct request for comment.

Towers Watson, the human resources consultancy firm that worked with BlackBerry’s board on the compensation package, also declined to comment on Thursday.

BlackBerry is not the first company in the spotlight for large payments for outgoing executives. Nokia’s departing chief executive, Stephen Elop, stands to pocket 18.8 million euros (US$25-million) if shareholders agree to sell Nokia’s handset business to Microsoft Corp. Elop is set to rejoin Microsoft, his former employer.

STOCK DOWN MORE THAN 50%

Heins was appointed BlackBerry CEO in early 2012, taking over from former co-CEOs Mike Lazaridis and Jim Balsillie. In the months before they stepped down, Lazaridis and Balsillie had cut their base salary to US$1, a symbolic gesture that they would not draw fat cheques while the company was obviously suffering.

Heins’ compensation has increased from US$1.9-million in fiscal 2011, when he was chief operating officer, to US$10.3-million in fiscal 2012 when he was appointed CEO, before slipping back slightly to US$9.1-million in fiscal 2013, which ended on March 2 this year.

Since Heins took over, BlackBerry shares have fallen more than 50% as the company delayed the release of its first BlackBerry 10 devices and they then failed to excite sales.

In May, Heins signed a new contract that raised his base salary to US$1.5-million from US$1-million; bumped his maximum incentive bonus to 150% of salary from 125% and granted him more than US$34 million in front-loaded equity awards that vest over three years.

It is those equity awards that provide the bulk of the enlarged payout if BlackBerry is taken over — the shares would vest immediately instead of over a three-year period.

According to company filings, if Heins is terminated due to a change of ownership of BlackBerry, he’ll receive US$3 million to reflect his base salary, annual incentives worth about US$4.5-million, and equity awards of US$48-million.

The board said the higher payouts were justified to retain Heins and ensure his interests are aligned with those of shareholders, and to reward the executive for leading BlackBerry through a period of massive upheaval.

“The necessary speed and scope of this transformation, as well as its critical importance to the future success of the company, demand leadership of exceptional skill, agility and vision,” BlackBerry said ahead of its July annual general meeting, when shareholders approved the changes.

The filings show that BlackBerry’s board also gave Heins a “special achievement bonus” of US$3-million for launching the BlackBerry 10 platform used for its latest smartphones, and for maintaining cash and liquidity above US$1.5-billion.

Last week, the company said it would book almost US$1-billion in writedowns, mostly on unsold BlackBerry 10 devices, when it reports second-quarter results on Friday.

� Thomson Reuters 2013

After reading this article in National Post this morning I am not surprised that Blackberry is where it is today. There is apparent conflict of interest.

I like this comment which i found from one of the readers in National Post

Elmo Harris • 2 hours ago −
Where is Flaherty's fancy new regulator in all of this? The more time passes the more this smells. It wouldn't take a genius to figure out that Watsa hasn't been sitting on his hands all this time.

If I were looking to drive down the price of this company I would do just about everything that Heins has been doing since he got his special compensation package. First, you make sure of the poorest marketing effort ever seen in launching a new product (Sham Wow does a better job). Second, you start chopping away your money making revenue machine, then you broadly hint that you are looking for a partner, then a buyer, then look desperate and announce that the company may be sold off for parts. To my knowledge, this is never done in public for the sole reason that it would hurt sales and harm the company. It's not like the company was desperate with $3B in the bank it had plenty of options. The whole purpose of the exercise seems to have been to drive away sales and drive the price down. The final straw is announcing the layoff of 4500 workers. Who is going invest hundreds of dollars on a phone with a company trying to make itself look like it's on it's last legs? Who benefits from all of this? Prem Watsa, the guy who hired the guy who took his orders from the guy who hired him.

Stop the trading. Investigate the company. Throw them in jail.

Even 5 year old would see that there is huge conflict of interest. this situation it is been a year in the making. THERE IS FRAUD AND THIS HAS TO BE INVESTIGATED.

I am more upset because good people lost their jobs, good Canadian company might go away because of clear greed.

[Dunt Dunt Dunt]

Attachment 205792


Stockholders are the ones in the middle... they might be getting to worst of it, but they were willing to play this silly game.

[KemKev]

Unfortunately, this is par for the course in the corporate world but it doesn't mean anybody did anything illegal or fraud was committed. Directors of companies are tasked with several responsibilities and a part of that is looking at executive compensation which must be consistent with the broader picture in other comparable organizations. Given BBRY tenuous position, a renegotiation of the head honcho's compensation would include a parachute clause (usually stock heavy). I have no problem with TH's compensation package or that he was rewarded for BB10's rollout. The fact that BBRY shares have gone down means that he is losing money as well so a $55M compensation may turn out to be far less. Could it be that the board was cognizant of share prices declining why it was structured that way? Who knows?

What I believe is that BBRY folks acted in good faith and expected that BB10 was going to do much better than it did. Flawed execution and marketing meant a cool reception to the new phones which eventually triggered a switch to plan "B", the current plan, which in hindsight causes plan "A" to look fishy.

I honestly do not buy the argument that there was a conspiracy afoot to intentionally devalue the company. That calls for a healthy dose of cynicism that I do not have at this time.

[Q100]

Well just an observation but given that TH's compensation packages rose substantially over the years and ultimately leading to a deal for him if the company tanks or sells.
Every step seems to have been deliberately botched.
The writing was on the walls.

[transportin]

The Heins compensation package is getting stale. Perhaps it's time to move on to a new topic.

Posted via CB10

[BlackBerry Guy]

Par for the course in the world of C-suite executives. Stephen Elop was also recently revealed to be pocketing 25 million for selling Nokia's mobile division to Microsoft.