RIM Pulls Rein On Stock Options

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Research In Motion Ltd. awarded no stock options to its most senior executives during the company’s last fiscal year, and was almost equally tightfisted with grants to its more than 3,500 employees. The creator of the BlackBerry wireless communications device granted just 315,000 stock options company-wide during the 12 months ended Feb. 26, which amounts to less than what each of the co-chief executive officers received a year earlier.


The annual compensation of RIM’s five most senior officers was limited to base salaries, with no bonuses or stock options handed out. Salaries, however, surged about 30 per cent for each top executive, according to a company filing.

Michael Lazaridis, president and co-CEO, and James Balsillie, chairman and co-CEO, each received a salary of $388,139 (U.S.), up 32 per cent from $293,600 a year earlier. The previous year, each man also received 400,000 stock options.

Despite more austere times at the Waterloo, Ont.-based company today, both Mr. Lazaridis and Mr. Balsillie hold an abundance of options received earlier. As of Feb. 26, each executive held about $91-million worth of unexercised options.

The two co-CEOs each own about 6 per cent of all RIM’s outstanding shares. The largest individual company shareholder is Fidelity Management & Research Co., which holds about 14 per cent.

RIM plans to seek shareholder approval for a restricted share unit plan at its annual meeting next month. According to the circular filed for the meeting, the RSU plan will not lead to any further dilution beyond the existing stock option plan, which caps the amount of shares available at 8.5 per cent of issued and outstanding shares.

RIM has posted years of torrid growth. In fiscal 2005, the number of subscribers to the company’s BlackBerry service rocketed 135 per cent to 2.5 million, and that number is expected to top three million when RIM posts first-quarter numbers this month. Revenue for fiscal 2005 jumped 127 per cent to $1.4-billion and profit surged more than threefold to $213.4-million.

While most analysts like the company’s prospects in the short term, some have raised concerns about emerging competition from companies with mobile communications software — such as Microsoft Corp., Good Technology Inc., Visto Inc. and Seven Networks Inc. — and from the major handset manufacturers, which include Motorola Inc. and Samsung Electronics Co. Ltd.