Research in Motion, the Waterloo, Ont.-based maker of the BlackBerry email device, took a big step toward buffing its tarnished reputation last week, announcing a new policy to govern how top executives will dispose of their stock options.
For more than a year, RIM has been embroiled in a simmering controversy over past manipulation of stock sales. The issue, known as “options backdating,” has already sparked regulatory investigations and investor lawsuits at several companies in the United States. And RIM is by far the most prominent Can-
adian company to come under scrutiny by regulators on both sides of the border. As a result, many of RIM’s top executives have been practically unable to sell shares since 2006, even as the company’s stock has surged above $100, while the investigations have been ongoing.
Under the new policy, executives will be able to set up automatic share disposition plans, outlining the amounts they plan to sell, 12 to 24 months in advance. Once those plans are filed and disclosed, they cannot be changed. The idea is to remove any suggestion that the company’s managers are trying to exploit stock spikes and dips to maximize their income.
In announcing the plan, co-CEOs Mike Lazaridis and Jim Balsillie revealed they both plan to sell RIM stock over the next 14 months or so. Lazaridis plans to donate $75 million in RIM shares to various as-yet-unnamed charities and educational institutions, and to sell stock worth another $100 million into the open market. Balsillie plans to sell $86 million in stock and to donate another $38 million to charities and institutions. A handful of other top RIM execs also announced disposition plans with proceeds sure to run into the hundreds of millions of dollars.
Investors, meanwhile, are delighted just to see RIM putting the options mess behind them. Call it a billion-dollar PR windfall. M
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