As Research In Motion circles the smartphone drain, its two CEOs cut their pay to $1. The Steve Jobs-like maneuver may not be enough to save a company that lost 70 percent of its profit to Apple and Android. The only question left: Are the BlackBerry maker’s leaders even worth a buck?
“We recognize our shareholders may feel we’ve fallen short,” co-CEO Jim Balsillie told analysts. “We realize we’ve not met expectations,” co-CEO Mike Lazaridis added. But in another breath, the two blamed the BlackBerry’s once-stellar reputation becoming a joke on bad marketing and advertising. Little wonder then analysts are saying RIM is done, stick a fork in them.
The recent delay of a QNX-based update of the BlackBerry 10 software until later in 2012 “could be the final nail in RIM’s coffin,” National Bank Financial analyst Kris Thompson told Canada’s Globe and Mail. “It’s likely game over for RIM,” the analyst adds.
That’s where the $1 executive salary comes in, as a last-ditch effort to tell investors the company is serious about turning this around — which Thompson and others view as highly unlikely. When Jobs took a $1 salary it was done out of confidence in his company and with the knowledge he had billions in the bank. The move by RIM stems from weakness — and simple survival. If the two execs retained their usual salaries at a time the Waterloo, Ont. company was producing products that consumers won’t buy, the co-CEOs probably would be fired, tarred-and-feathered by investors, or both.
If economics is known as the dismal science, RIM’s balance sheet could be the prime reason. During the December quarter, when BlackBerries should be flying off shelves in record numbers, unlike the iPhone or Android-based rivals, the RIM devices are more like that fruitcake you just can’t get rid of. The company has just 9 percent of the U.S. smartphone market, a far cry from headier days when the BlackBerry was on the hip of nearly every corporate denizen. That was before the iPhone, of course.
But there is a future for RIM somewhere else – like Argentina or Mexico. RIM has seen 731 percent year-over-year growth in such emerging markets, says research Canalys. In fact, outside of North America, RIM sales are up 56 percent this quarter. That was before cheap Android smartphones arrive, of course.
What about cheap smartphones? Maybe RIM could go there, trading high-profile customers for huge numbers of less-expensive handsets aimed at budget-conscious consumers? Both execs quickly shot down that idea.
The RIM co-leaders have a better plan – more advertising and marketing spin. Ah, yes. If you can’t dazzle them with brilliance, baffle them with BS. Could work.
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
8 responses to “RIM’s Co-CEOs Pull A Steve Jobs, Cut Salary To $1”
When I first got into stocks, RIM was said to be one with potential but also uncertainty. Sounds like most stocks, right? Sorta but I dodged it anyway. Happy I went with Oracle and Microsoft stock instead. I didn’t know about the Co-Ceo situation but I’ve recently heard of its track record. Crazy that RIM will try to market the same product harder instead of marketing a diff product altogether. Seems like the forecast is right.
Bloomberg radio was talking about this company this morning, and wondering what RIM will do until its new phones are out on 2Q 2012. RIM was supposed to be shipping its next-generation phones already. Having a 6-month setback will be a giant, rusty nail in their coffin.
Still paid too much.
More advertising? Like their Playbook launch marketing making fun of iPads: Amateur hour is over! http://mashable.com/2011/05/06…
The maneuver probably has nothing to do with saving the company but it is a way to save on taxes. Canada only taxes 50% of capital gains.
50c each would be Ideal.
i actually like that they are doing this. At least it means they care what their shareholders think. When Job’s did it it was just kinda to be cool. But these guys are doing it because their company needs that money more than they do right now.
Don’t blame CEO, they want RIM win.
RIM has strange culture and self distruct political environment.
In RIM if a new hired person figure out major problem and introduce efficient approach, both manager and his buddy group member will proof their wrong approach works. just like someone point out driving a car is right way, pushing a car is wrong way, then both manager and his buddy group member will hate you, and proof that 3 person can also move the car by pushing it. cheating email will be sent to some vice president, saying like: see, the car moving, pushing a car is a natural part of the process, in order to deny new hired contribution of introducing skill of drive a car, they have to deny merit of driving a car.
It is very strange company culture and strange company political environment, it promote stealing and cheating skill. RIM’s management may be a typical instance in MBA course.
This culture deny or steal hardworking team members’ contribution/innovation, generate strange political environment, destroy RIM.
So don’t blame CEO, some of their VPs and VPs’ expert generate terrible culture and self destruct political environment.