RIM's co-CEOs will now each take $1 a year in salary

On Thursday, Research in Motion released its latest financial results, and they were not pretty. For the quarter that ended for them on November 26, the company recorded net income of $265 million, a massive 71 percent decrease from the same period a year before. RIM's management also admitted that their next generation Blackberry smartphones, which will use their Blackberry 10 operating system, would not be out until sometime in late 2012, rather than the first half of 2012.

Investors didn't like what they heard and as a result, the stock price of RIM went down as much as 13 percent in trading today. RIM's stock is currently the lowest it has been in eight years.

During the conference call with investors on Thursday, RIM's co-CEO's James Balsillie and Mike Lazaridis announced they would take a big cut in their salaries. As News.com reports, Balsillie said, "To further demonstrate our passion, alignment and commitment to RIM's long-term success, both Mike and I have asked the compensation committee to make a change to our cash compensation, such that our salaries will be reduced to $1.00 per year, effective immediately."

This kind of move has been done before at other tech companies, most recently when Meg Whitman announced that she would only take $1 a year in salary as HP's new CEO.

However, even this token move at PR may not stop investors at RIM from wanting to kick both Balsillie and Lazaridis out of the their CEO roles. The company has lost market share for its Blackberry phones to the iPhone and Android devices. The Playbook tablet has been a massive failure. On top of that, a recent online outage that crippled many functions of the Blackberry phones most likely sent a number of loyal customers over the edge of commitment to the platform.

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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.

The Stark said,
That won't stop those two clowns to destroy the company.

Sadly yes RIM needs a change of leadership immediatly or it will sink soon.

FMH said,
Take $1 a year salary is a good sign...
It's completely irrelevant if their stock options make up the difference, which is exactly what will have happened. These people don't care about the company, they just want to make sure they earn a tidy sum. I mean, all the former bank CEOs don't care that they crashed the economy and lead to hundreds of thousands of jobs losses - they've made hundreds of millions to billions.

The system is still broken.

"...have asked the compensation committee to make a change to our cash compensation..." Because income taxes are much higher than capital gains. Give up the stocks too if you really want to prove something.

schubb2003 said,
"...have asked the compensation committee to make a change to our cash compensation..." Because income taxes are much higher than capital gains. Give up the stocks too if you really want to prove something.

Prove what? Who is in this for the charity business?

medium_pimpin said,
That's $1 too much

Well legally they can't go lower.. $1 is the minimum. it's a complicated "law".

but yea.. too much! It is a salary.. but not necessarily how much their COMPENSATION is. It can also be deferred at a later date.. so that doesn't mean they work for nothing just means they have to wait a little longer to get it...

They need to just give up on the vaporware BB OS 10 and move on to Android or WP7, there hardware has always been quite good, as has the email/messenger functions but the main OS has always been crap as has the app support from 3rd party developers. While it would not be hard for them to move to Android since they both have Java based roots it would would require a substantial re-design to move to WP7 but would possibly save them from this a complete downfall which is where they are heading with all there failures.

Zippo7 said,
...the main OS has always been crap as has the app support from 3rd party developers.

Oh man, I looked into writing PlayBook apps, and the documentation and developer support was the biggest pile of crap I'd ever seen. Full of irrelevant information, non-existent API docs and useless PDFs to download. Lets just say I gave up.

dotf said,
I'm not sure they have a big enough patent portfolio to be worth it.

Actually, they have an excellent patent portfolio. They were once the giants of smartphone market.

And it is estimated to be worth several billion dollars.

Exactly. They're not actually cutting their pay, it's just a fiddle. And shareholders have seen right through that, hence the drop in share price. Sticking with a losing formula is a recipe for [blank]... come on guys, I'll let you fill in the blank.

RIM is doing poorly, and their CEOs seem to have a very weak feel for technology. However, this certainly shows a very strong commitment moving forward given that their entire compensation likely derives from RIM stock, which will only go up if they can turn things around.

With that in mind, I believe that they see the next Blackberry release (late 2012 apparently) being a good one to maintain customers, even if it is late. I do not own one, but I preferred the Blackberry Torch to Android when it came out. If they can maintain that approach, then I feel like they should be able to keep business users still using Blackberry, but I wonder if they have lost their "cool" factor too much to really attract new business.

It doesn't matter if their pay is based upon the performance of shares, if they have a poor track record then they should be replaced by people willing to take the company in a new direction. RIM has seen the floor drop out from underneath it and it has been haemorrhaging market share.

Why go with people that have already failed when you can try people that might not fail?