Strategic CIO // Team Building & Staffing
Commentary
6/15/2012
11:03 AM
Eric Zeman
Eric Zeman
Commentary
50%
50%

RIM Former Co-CEOs' Golden Parachutes Draw Jeers

What's the best way to reward executives for lighting a company on fire and burning it to the ground? Give them multi-million dollar golden parachutes, naturally.

If there are two former executives less deserving than Mike Lazaridis and Jim Balsillie of a huge payday on their way out the door, I don't know who they are.

The two former co-CEOs of Research In Motion each earned a hefty severance package when they left the troubled smartphone maker earlier this year, securities filings show. According to the firm's recent 6-K, Balsillie was given $7.93 million in salary, bonus, and severance. Lazaridis earned about half as much in salary and other awards, at $3.96 million. Lazaridis also managed to score a company car and driver and a 10-year extension on health coverage for himself and his family.

That's gotta sting a bit for the thousands of RIM employees who have already--or soon will--lose their jobs thanks to these two bumbling buffoons.

[ RIM has decided to stop selling the Playbook, but says it's still committed to the tablet market. Read more at RIM Kills 16GB Playbook Tablet. ]

Lazaridis and Balsillie refused to take the iPhone and Android threats seriously, and RIM's share of the smartphone market has nosedived thanks to their inept leadership.

Lazaridis famously dismissed the iPhone when it was first announced, believing that smartphone owners cared more about precious battery life than a full HTML browser and a large display. RIM continued to develop smartphones using its aging platform with nothing but incremental hardware updates for years.

The company's newest platform, BlackBerry 7, reached the market in August 2011. Balsillie predicted that it would save the company and bring back RIM's market share. Instead, BlackBerry 7 devices have fizzled in the face of amazing devices like the iPhone 4S, Samsung Galaxy S II, HTC Amaze 4G, and others.

RIM's board finally came to its senses, and the two co-CEOs resigned early this year to be replaced by Thorsten Heins. In the five months Heins has been in the leadership role, he's demonstrated that he knows how serious RIM's position is. Heins is effecting real change and is pushing the company to bring BlackBerry 10 to market as quickly as possible. Unfortunately for Mr. Heins, the smartphone market innovates and competes at the highest level.

The company has resorted to exploring its strategic options, which means it is probably shopping itself and/or its patents for potential sale.

Despite their inability to successfully lead the company they founded, the two men did have a meaningful impact on the overall smartphone space.

"Messrs. Lazaridis and Balsillie revolutionized the worldwide wireless industry with the introduction of the BlackBerry and forever changed how the world communicates," reads a portion of RIM's 6-K. "Under their leadership, the Company successfully navigated many challenges and quickly scaled to become a global company and industry leader with sales in over 175 countries and more than 17,000 employees worldwide. Over the last decade, the Company experienced tremendous growth, with annual revenues increasing from $294 million to just under $20 billion."

For some perspective, RIM's shares hit a high of $33.54 in the last year. Today and for many of the weeks and months prior to today, its stock is in the $9 - $11 range. That leaves little for RIM shareholders to be grateful about.

Mobile Connect addresses the strategic direction that will define enterprise IT for the next decade--building and managing information systems that run on a mobile platform. Mobile Connect will bring together enterprise mobility thought leaders to discuss the innovations in mobile, and how forward-thinking companies are getting the technology to work for them, providing unprecedented business value. It happens in Boston, June 18-20. Register today.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
moarsauce123
50%
50%
moarsauce123,
User Rank: Ninja
6/16/2012 | 4:56:13 PM
re: RIM Former Co-CEOs' Golden Parachutes Draw Jeers
This all comes down to inept boards and cowardish shareholders, but in the end they call give a damn if inept managers get millions as long as they can turn a quick buck in the current quarter. None of them cares what happens to the company in a year or two. They all just move on to the next company.
suboptimal
50%
50%
suboptimal,
User Rank: Apprentice
6/16/2012 | 12:16:51 PM
re: RIM Former Co-CEOs' Golden Parachutes Draw Jeers
Dont forget that Lazaridis essentially created RIM - without him, none of this would have existed. He created value when none existed by having the foresight long before others did. While he may not be the best CEO, give him credit where its due. Balsillie did provide the energy to grow the company earlier on, but wasn't "working the farm" at the mid-life point when he should have. They essentially couldn't get out of the paradigm that they created and painted themselves into a corner. Do they deserve a parachute? Perhaps not when considering the current environment - but I'd rather pay them than most of the other " hired CEOs" who essentially walked in a destroyed companies (i.e. Nortel, HP, etc.), or those Wall Street criminals.
b0da
50%
50%
b0da,
User Rank: Apprentice
6/16/2012 | 12:07:26 AM
re: RIM Former Co-CEOs' Golden Parachutes Draw Jeers
"bumbling buffoons"
"inept leadership"

Yeah, as a long time RIM employee I would say that about sums it up.
Aden11
50%
50%
Aden11,
User Rank: Apprentice
6/15/2012 | 6:16:48 PM
re: RIM Former Co-CEOs' Golden Parachutes Draw Jeers
"That's gotta sting a bit for the thousands of RIM employees who have already--or soon will--lose their jobs thanks to these two bumbling buffoons."

Spot on Eric.
Aden11
50%
50%
Aden11,
User Rank: Apprentice
6/15/2012 | 6:15:17 PM
re: RIM Former Co-CEOs' Golden Parachutes Draw Jeers
Both of them should be fired long time ago.
2014 US Salary Survey: 10 Stats
2014 US Salary Survey: 10 Stats
InformationWeek surveyed 11,662 IT pros across 30 industries about their pay, benefits, job satisfaction, outsourcing, and more. Some of the results will surprise you.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest, Dec. 9, 2014
Apps will make or break the tablet as a work device, but don't shortchange critical factors related to hardware, security, peripherals, and integration.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of December 7, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program!
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.