RIM May Face Renewed Investor Push for Management Overhaul
RIM May Face Renewed Shareholder Push
Simon Dawson/Bloomberg
A BlackBerry Curve 9300 smartphone, manufactured by Research In Motion Ltd.
A BlackBerry Curve 9300 smartphone, manufactured by Research In Motion Ltd. Photographer: Simon Dawson/Bloomberg
Research In Motion Ltd. (RIMM), the BlackBerry smartphone maker that fended off a shareholder effort to overhaul management in June, may face a renewed push for reform next year.
Northwest & Ethical Investments LP, which was promised a role in studying leadership changes in exchange for withdrawing a proposal to split the roles of chairman and chief executive officer, has yet to have any substantial discussions about a review RIM is scheduled to finish by Jan. 31. Northwest is supposed to help establish the guidelines for a committee to study management and hasn’t held talks on the issue with RIM, said Robert Walker, Northwest’s vice president of ethical funds.
“We’ve had nothing,” other than promises of information, Walker said in a telephone interview yesterday. “It’s concerning for sure.”
If the study isn’t done on time, Northwest plans to push for an investor vote on separating the chairman and CEO roles, he said. Both posts are now jointly held by Jim Balsillie and Mike Lazaridis.
“We would file if we don’t see the report,” Walker said. Following inquiries from Bloomberg News, RIM told Northwest it will share a draft of the panel’s guidelines without saying when, he said.
RIM said that it plans to meet the deadline for review.
“A committee consisting of RIM’s independent directors is on track to meet the timelines agreed upon with NEI,” the company said in an e-mailed statement. “The committee has kept NEI apprised of progress and remains committed to consulting with NEI and expects to be ready to meet with NEI soon.”
Investor Pressure
“I don’t feel fully apprised of what’s going on,” Walker said today, when asked for his reaction to RIM’s statement.
RIM has come under pressure from investors as it struggles to compete with Apple Inc. (AAPL) and handset makers that use Google Inc. (GOOG)’s Android software. The Waterloo, Ontario-based company’s share of the global smartphone market sank to 11 percent in the third quarter from 15 percent a year earlier, according to the research firm Gartner Inc. Android phones, which are made by companies such as Samsung Electronics Co. and HTC Corp. (2498), more than doubled to 53 percent share.
RIM fell 2.8 percent to $16.87 at the close in New York. It has slid 71 percent this year to the lowest level since 2004.
The share slump has prompted investor Jaguar Financial Corp. (JFC) to call for RIM to divide into separate companies, seek a merger or sell itself. Investors owning 8 percent of RIM support the effort, Jaguar said last month.
Balsillie and Lazaridis
While co-CEOs Balsillie and Lazaridis built the BlackBerry into a global brand with innovative mobile e-mail, they have come under fire for management missteps in trying to parry Apple and Google’s entry into mobile devices. RIM’s responses to the iPhone and iPad have done little to slow Apple’s momentum.
Vic Alboini, Jaguar’s chairman and CEO, called RIM “a leaderless company.”
Northwest withdrew its proposal to split the roles of chairman and CEO at RIM in June after the company argued that the chairman title helped Balsillie and Lazaridis generate business, particularly overseas. The company also said the board’s lead independent director, John Richardson, already fulfills the typical role of a chairman and ensures directors’ independent oversight.
Clock Ticking
Northwest withdrew its proposal ahead of the shareholder meeting in July, giving time for a committee to study the issues. Though RIM originally wanted longer to complete the review, Northwest insisted on a Jan. 31 deadline so it would have time to refile a proposal for next year’s annual meeting if it wasn’t satisfied with the outcome.
There are several steps that still need to be made before the review can be completed, Walker said. For example, specialists, such as the Canadian Coalition for Good Governance, should be involved, he said. Toronto-based Northwest, which manages about $5 billion in assets including RIM shares, won’t hesitate to push for change if RIM doesn’t fulfill its promises.
“We want to make sure the report is done in a serious way with consultations with governance experts,” Walker said. “The clock is ticking.”
-- Editors: Peter Elstrom, Ville Heiskanen
To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net
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