RIM agrees to study board changes; avoids vote
TORONTO (Reuters) - Research In Motion succumbed to rising shareholder pressure on Thursday, agreeing to study a split of its co-chair and co-chief executive roles and dodging a showdown at its annual meeting.
The two roles have been shared by Jim Balsillie and co-founder Mike Lazaridis since December, to the dismay of investors watching the Canadian BlackBerry maker struggle to compete against Apple and Google.
RIM said in a statement it would establish a committee of independent directors to study the executive and board roles, and make recommendations for a revised corporate structure.
In turn, activist shareholder Northwest and Ethical Investments withdrew a proposed vote on the issue at RIM's July 12 annual meeting.
RIM contacted NEI late on Tuesday and the broad details of the review were agreed on Wednesday morning, days after two of North America's largest and most influential proxy firms backed the proposal from Northwest, which holds more than half a million RIM shares.
"It's a good response to some risks that we spotted in how the company currently operates," said Robert Walker, vice-president of ethical funds at NEI, which will influence the committee's mandate and review its report, due by January.
But for other critics, RIM appeared to have kicked the issue into the long grass.
"It smacks of RIM's progress toward solving their other problems, and that is it's glacial," Charter Equity's Edward Snyder said. "This seems like a band-aid solution."
Walker said RIM had reason to take the review seriously.
"The timing is such that we will have a chance to review how RIM has responded and consider whether or not we need to file a resolution for the 2012 AGM," he said.
RIM's committee must make its report public by January 31, 2012 and the board will have 30 days to respond.
Snyder said the vote would have given investors a chance to grill RIM's leaders on their strategy. RIM has delayed launching new smartphones while its PlayBook tablet, designed to compete with Apple's iPad, faced tepid reviews.
RIM's shares have lost half their value this year amid profit warnings, a waning market share and a failure to push out cutting-edge products capable of challenging Apple's iPhone and the slew of devices running on Google's Android software.
"RIM's problems stem from management not being able to execute on their plans, and I don't see that changing any time soon," Snyder said.
An unnamed source identifying himself as a senior RIM executive posted a 1,700-word letter on the Boy Genius Report website on Thursday that attacked the BlackBerry maker for failing to focus on users and developers and questioned whether the co-CEO structure was efficient.
RIM said in response that it was aggressively addressing its challenges as it neared the end of a major business and technology transition.
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