RIM’S CEO MEETS WITH IRATE SHAREHOLDERS.
WATERLOO, Ont. — Among shareholders who took to the microphone to question Research In Motion Ltd.’s senior leaders at the BlackBerry maker’s annual meeting on Tuesday was a middle-aged gentleman who cordially wished new chief executive Thorsten Heins the best of luck in his quest to turn the struggling technology company around.
But he also remained “extraordinarily critical” of the company’s board of directors, he said, wondering how they could let things at RIM get so bad — drawing applause from the several hundred investors gathered in an auditorium on the campus of Wilfrid Laurier University.
The man’s restrained frustration was representative of the overarching sentiment at the RIM meeting, where investors appeared to be torn between feelings of bitterness toward the board and their cautious desire to believe Heins’ promises of a rebirth.
In a reflection of their quiet disapproval, RIM’s shares fell 4.6 per cent to $7.44 Tuesday on the Toronto Stock Exchange.
A pioneer in the smartphone market, RIM’s devices have fallen out of favour with North American customers, many of whom have turned to Apple Inc.’s iPhone and devices running Google Inc.’s Android software. So RIM shares have lost nearly 90 per cent of their value over the past 18 months amid slowing sales, product delays and the disappointing launch of the PlayBook tablet.
RIM’s continuing woes led to the ouster of co-chief executives Mike Lazaridis and Jim Balsillie and the appointment of Heins earlier this year. The shakeup also resulted in Barbara Stymiest being named as the new chair of the board of directors
Despite the public boosterism of its new leadership, RIM remains mired in the long-delayed transition to a new software platform for its BlackBerry devices — known as BlackBerry 10 — which has frustrated many investors.
On Tuesday, Stymiest did her best to assure shareholders that the company’s board of directors remains “very supportive” of Heins and the executive team he has put in place over the past six months.
“We believe the company’s executive team is well positioned to lead the company forward to face its current challenges and pursue the opportunities that lie ahead,” she said during the meeting.
All 10 of the board members RIM put forth for election were confirmed at the meeting, including two new directors: Fairfax Financial Holdings chief executive Prem Watsa (who was appointed in January), and former Goldman Sachs executive Timothy Dattels.
However, investors withheld between 15 per cent and 30 per cent of their votes, which some, including Jaguar Financial chief executive Vic Alboini, suggested was an indication that shareholders were less than satisfied with the company’s nominees.
“In the absence of an alternative slate, that’s a vote against directors joining the board,” Alboini told reporters after the meeting. “I hope that the board looks very seriously at that message that’s being communicated by the shareholders.”
Outside, Alboini suggested that despite RIM’s insistence that a turnaround remains possible once the first BlackBerry 10 devices launch early next year, the best way to unlock the shareholder value of RIM would be to break up the company.
“(The board) has to look at a breakup for the company into the handset business and the software and services platform, and a potential sale of either or both or private placement funding investments by giant competitors like Microsoft, IBM, Facebook and others,” he said.
“That will save this company. Their whole focus continues to be on licensing the BB10 platform, joint ventures and partnerships. And again, you can’t put all your eggs in one basket. You have to be open to other alternatives. So, it was a highly disappointing presentation, and frankly it looks like a sad company right now that needs a major fix.”
Heins appeared to understand the shareholder frustration.
“I can assure you we do not take this support lightly or as unconditional,” he said.
In order to address the company’s flagging performance and cut costs, he said RIM planned to shrink its external manufacturing sites to three from 10, while streamlining the BlackBerry product portfolio and selling fewer device models.
“I am not satisfied with the performance of the company over the past year.”