RIM close to stripping CEOs of chairmanship: report

Reuters Middle East
Mike Lazaridis, President and Co-CEO of Research In Motion, speaks during BlackBerry's DevCon at the Moscone West Center in San Francisco
.

View photo

Mike Lazaridis, President and Co-CEO of Research In Motion, speaks during BlackBerry's DevCon at the …

TORONTO (Reuters) - Research In Motion is close to a decision on stripping its co-chief executives of their other shared role as chairman of the board, a newspaper said on Tuesday, a change that could meet a key demand from angry and disillusioned investors.

The National Post newspaper, citing "sources familiar with events," said Barbara Stymiest, currently an independent member of RIM's board, is leading the race to replace Mike Lazaridis and Jim Balsillie in the chairmanship.

RIM shares jumped more than 7 percent on investor hopes that the struggling BlackBerry maker was listening to increasingly strident demands for change.

"Any talk about an independent chairman is going to give this company a boost. It will increase the likelihood the value of this company will be unlocked," said BGC Partners analyst Colin Gillis.

"It breaks the stranglehold the current CEOs and co-chairs have on the company."

But other analysts doubted Stymiest, if named to the chairmanship, would actually assume the transformational role that activist shareholders are calling for.

Lazaridis and Balsillie, RIM's second and third-largest shareholders with a little more than 5 percent of the stock apiece, are currently in the unusual position of sharing the two top-tier positions, as chairman and as CEO.

They have resisted large-scale change so far, even as investor pressures mounted as the shares tumbled 75 percent last year after a series of profit warnings, and the botched launch and dismal sales of its PlayBook tablet computer.

RIM, which is also facing a slump in BlackBerry sales in the important U.S. market, on Tuesday extended its steep discounting of the PlayBook, offering each of the three storage sizes at a flat $299 until early February.

A 16 GB version initially sold for $499, matching the price of Apple's popular iPad, while the 64GB version was $699. RIM sold around 850,000 PlayBooks from its launch in April until late in November, a tiny fraction of iPad sales.

LOOKING AT OPTIONS?

The precipitous RIM share-price drop in 2011 prompted calls by some analysts and investors for RIM to consider strategic alternatives such as a split or an outright sale of the company.

Sources told Reuters last month that Amazon.com and other suitors had considered making a bid for RIM, but the board wanted to focus on a turnaround instead.

RIM, based in Waterloo, Ontario-based, in June agreed to study its unusual corporate structure and report back to investors by the end of January.

RIM did not respond directly to the National Post report, but said a committee of its seven independent directors was on track to deliver recommendations by January 31. That committee includes Stymiest, who has sat on the RIM board since 2007 and who is one of Canada's most successful businesswomen.

Analysts were not sure if Stymiest could herald the more radical change activist investors want if she took over as chair, or if such a change would just be more window-dressing at a company that has earned a reputation for over-promising and under-delivering.

"She's being thrust into the limelight to appease shareholders. It doesn't really do much for me personally," said Matthew Thornton, an analyst at Avian Securities in Boston. "This one action doesn't solve anything, in my mind," he said.

FORMER HEAD OF TORONTO STOCK EXCHANGE

Trained as an accountant, Stymiest was a partner at Ernst & Young, then chief financial officer of Bank of Montreal's Nestbitt Burns investment bank before becoming head of the Toronto Stock Exchange in 1999.

In her five years as chief executive of Canada's largest stock market, she shepherded the bourse through one of the most transformative periods in its 150-year history.

She brought the exchange public in 2002, expanded the company into bond and energy trading, and acquired the resource-focused Canadian Venture Exchange, making the Toronto exchange a mining and energy powerhouse.

Notably for RIM investors and customers weary of BlackBerry network outages, Stymiest put an end to an embarrassing series of technical glitches that had plagued the exchange after it went electronic in 1997.

Stymiest left the exchange late in 2004 to become chief operating officer at Royal Bank of Canada, making her the apparent front-runner to eventually replace CEO Gord Nixon as the first female bank CEO in Canada.

But Stymiest appeared to lose influence at the bank, and was shifted to a lesser executive role in 2009. She left RBC, the country's largest lender, last year.

RIM shares were 8.1 percent higher at $15.67 on the Nasdaq and up 7 percent at C$15.83 on the Toronto Stock Exchange.

(Reporting by Alastair Sharp and Cameron French in Toronto and Sinead Carew in New York; Editing by Frank McGurty)

View Comments (0)

Recommended for You