In their annual meeting, RIM’s investors have given current co-CEOs Jim Balsillie and Mike Lazaridis to “prove” that they are worth their co-chairman titles.
According to a report on Bloomberg, Northwest & Ethical Investments LP, a major shareholder in the company, proposed to split the roles of chairman and CEO between the two, saying that it would increase the board oversight. The investors were supposed to carry a vote on the issue, however the shareholder withdrew the proposal after RIM insisted that the dual roles performed by the executives do generate business, particuarly overseas.
“We wanted to give them a chance to prove that there is an actual business necessity,†Jennifer Coulson, manager of corporate engagement at Northwest & Ethical, said in an interview at the shareholder meeting.
Despite assurance from the management, other shareholders still don’t quite favor the idea of having co-chairmans.
“The co-CEO, co-chairman structure is probably the worst solution of all,†said Philip Larrieu, investment officer at the California State Teachers’ Retirement System, which manages $156 billion, including 450,000 shares of RIM.
“If they come back with a structure that’s similar to what they have now, even if NEI doesn’t come back and ask for a vote, someone else will,†said Larrieu. “This is just delaying the inevitable.â€
It is getting clear that there is unrest between the investors as RIM continues to loose flavor among consumers and slips its grip on its once commanding market share. RIM now hopes that its first QNX based smartphones will bring the company back on track, somewhat. The company reportedly shelved plans to produce a 10″ version of its PlayBook tablet to speed up the project.
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