Moderator: 3ne2nr Mods
RIM brass takes heat from shareholders
Senior management at Research In Motion Ltd. faced fierce criticism at its annual general meeting in Waterloo, Ont., on Tuesday amid declining sales and an uncertain future with a delay of its new smartphone platform.
Barbara Stymiest, RIM’s new chair of the board, began the meeting by stressing that she knows some shareholders are frustrated with the smartphone maker’s troubles but that the board has faith in the revamped management team.
But some of the investors present were not as committed to the board. During a somewhat confrontational question and answer session, one investor asked why members of RIM’s board had let the company’s continuing problems fester for so long, and argued that none of the old members of the board should stay on.
“What this company needs is an upheaval,” like the one that took place at CP Rail, he said, drawing applause from some of the 300 or so people at the meeting.
Even before investors had a chance to vent, a proxy shareholder asked several tough questions about the composition of the board.
Vic Alboini, of Jaguar Financial, first asked whether the board was searching for additional technology talent to augment the board – to which Ms. Stymiest said they were searching, and had enlisted a firm for such a task. Then Mr. Alboini asked for the number of votes withheld on the re-election of directors; many, when the list was read out, had percentages of votes withheld above 20 per cent, with director John Richardson having more than 30 per cent of votes withheld. “Clearly this is not an overwhelming approval,” Mr. Alboini said.
RIM’s board has come under pressure over the past couple of years as Apple Inc.’s iPhone and a variety of smartphones running Google Inc.’s Android operating system began to take market share from RIM. Many perceived the board as weak, dominated by RIM’s former co-CEOs Mike Lazaridis and Jim Balsillie who both served as co-chairs of the board.
As Apple and Google took more market share and RIM failed to deliver a competitive product to fight back, activist investors and others began criticizing the board - and the former co-CEOs - and demanded more drastic action. As results worsened, Mr. Lazaridis and Mr. Balsillie slashed their salaries to $1, and then resigned. They also requested that the board appoint Thorsten Heins, then chief operating officer, as the company’s new CEO.
At the same time in late January, Ms. Stymiest became board chair, Fairfax Financial chief Prem Watsa joined the board, and the company has since attempted to bolster its board’s credentials by nominating Goldman Sachs’s former head of investment banking for Asia (excluding Japan).
Following the formal part of Tuesday's meeting, RIM chief executive officer Thorsten Heins took to the stage to address investors. As he did in the company’s most recent earnings conference call, Mr. Heins acknowledged RIM is facing serious challenges.
“I want to assure you I am not satisfied with the company’s performance over the past year,” he said.
Although he did not reveal many new details, Mr. Heins updated investors on the company’s plans for the year ahead – chiefly, the launch of the new BlackBerry 10 line of smartphones, which has once again been delayed. Originally scheduled for launch early this year, then this fall, the new phones will now not hit store shelves until the first quarter of 2013.
Mr. Heins said the reason for the delay is the challenge of integrating large amounts of software code into the new platform. Once again, the CEO said he will not compromise on the issue of release dates, and argued that some telecom carriers prefer a 2013 launch because next-generation wireless networks will be more widely operational by then.
Mr. Heins also updated investors on RIM’s ongoing cost-savings efforts, which notably include a massive round of layoffs that will see 5000 employees – almost a third of the company – lose their jobs.
The company also plans to save money by cutting its external manufacturing facilities from 10 to three, and by outsourcing its global repair services, the CEO said.
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