Monday, March 5, 2007
Research In Motion Ltd. (RIM) co-chief executive and chairman, Jim Balsillie, has resigned voluntarily as chairman after an internal review revealed irregularities with how the company accounted for stock options.
The review was carried out over the past 7 months and indicates that, Canadian BlackBerry maker, RIM, will have to restate earnings for all of 2004, 2005, and 2006, and for the first quarter of 2007. The company will have to lower previously reported earnings by approximately US$250 million.
The review committee indicated that RIM “failed to maintain adequate internal and accounting controls with respect to the issuance of options in compliance with the Company’s stock option plan, both in terms of how options were granted and documented, and the measurement date used to account for certain option grants”.
Although the review finds that there was no deliberate misconduct, both Balsillie and co-chief executive, Michael Lazaridis, have agreed to pay, voluntarily, up to $5 million each to compensate the company for the costs of the review and restatement.
All RIM directors and C-level officers will have to pay back any monies received incorrectly as a result of the option irregularities.
Balsillie will retain his positions as co-chief executive and director. In a press release, the company stated that “consistent with current best practices in corporate governance, the roles of chairman and CEO are being separated”. Current RIM chief financial officer, Dennis Kavelman, will move to the position of chief operating officer.
RIM is a designer, manufacturer and marketer of wireless solutions for the worldwide mobile communications market and is listed on the Nasdaq Stock Market and the Toronto Stock Exchange.