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3/9/2007
03:20 PM
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RIM's Stock Options Blunder

It cost Balsillie his chairman title. More important is the company's market momentum.

Jim Balsillie

Chairman no more
Jim Balsillie must be wondering where the next booby trap will appear. The confident--some would say "blustery"--co-CEO of Research In Motion, maker of the BlackBerry mobile e-mail device, gave up the chairman title last week after an internal review found hundreds of stock-option grants had been backdated--timed to a low share price to make them more lucrative. Dozens of tech companies have had similar problems.

Having seen RIM through a prolonged patent dispute (RIM settled for $612.5 million), then bouncing back with the release of ultrapopular models like the BlackBerry Pearl this year, Balsillie must hope regulators are satisfied with the mop-up, which includes a $250 million restatement of past earnings. Balsillie retains his board seat, and he and co-CEO Mike Lazaridis will give up earnings associated with the backdated options and each contribute $5 million toward the investigation cost. But he can't sigh in relief yet: The Ironworkers Ontario Pension Fund has said it will go forward with a shareholder lawsuit.

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