BlackBerry chief to get US$55.6m in event of sale

PUBLISHED : Saturday, 17 August, 2013, 12:00am
UPDATED : Saturday, 17 August, 2013, 4:00am

BlackBerry chief executive Thorsten Heins stands to make US$55.6 million if he sells the company and is ousted.

That was the amount he was entitled to receive if BlackBerry had a change of control and Heins was pushed out by the new owners, a May proxy filing said.

The figure, which includes salary, incentive payments and equity awards, is based on BlackBerry's stock price at the end of the financial fourth quarter. The plan was approved by shareholders on July 9.

Shares of BlackBerry have surged 19 per cent in the past week on speculation that the struggling Canadian smartphone maker would be bought, broken up or taken private, bringing a windfall to investors. The company announced plans on Monday to form a board committee to consider a potential sale, joint ventures and partnerships.

Prem Watsa, a Toronto businessman and BlackBerry's largest shareholder, is stepping down from the board, fuelling speculation that he may play a role in rescuing the company.

Still, finding potential buyers may not be easy. BlackBerry bankers JP Morgan Chase and RBC Capital Markets quietly contacted possible bidders for almost a year and found little interest in acquiring the company, said two people familiar with those discussions.

If Heins is terminated without a change of control, he is entitled to US$22 million in salary, incentive payments and equity awards, based on the March 28 share price. The payout would include his base salary of US$3 million and about US$72,000 in benefits and retirement savings. He is also eligible for an annual incentive payment of US$2.8 million, which climbs to US$4.5 million in a change-of-control scenario.

The equity awards are valued at US$16.1 million if he is simply terminated and US$48 million if it happens at the hands of new owners.

Despite the stock's recent surge, the shares remain 24 per cent below the March 28 price on which the payout scenario was calculated.

Heins was named chief executive in January 2012, replacing co-founders and co-chief executives Mike Lazaridis and Jim Balsillie.