BlackBerry Maker Restates Results, Chairman Resigns
BlackBerry maker Research In Motion Ltd. said Monday it will restate its financial statements as far back as fiscal 2004 because of past stock option reporting errors and it anticipates a $250 million reduction in previous earnings. Chairman and Co-CEO Jim Balsillie is stepping aside as chairman.
The Waterloo, Ontario-based maker of the popular handheld Internet device said a special committee determined that all options granted prior to Feb. 27, 2002, were accounted for incorrectly due to not applying variable accounting.
The special committee did not find intentional misconduct on the part of any director or officer, but said hindsight was used to select grant dates with favorable pricing.
Balsillie has voluntarily stepped down as chairman, and Dennis Kavelman will be moving from his position as chief financial officer to become the chief operating officer of administration and operations. Balsillie will remain co-CEO with Michael Laziridis and will also stay on as a director.
It said that move comes as the company has decided to separate the roles of chairman and chief executive.
John Richardson was named lead director of the board, which will now have two additional directors, or a total of nine members.
The company said Balsillie was directly involved in approving grants following the company's initial public offering in 1997, including grants that have been found to have been accounted for incorrectly. Balsillie's role in approving grants decreased over time as more responsibility for approving certain grants was given to Kavelman and other employees.
Based on the recommendation of the special committee which conducted the review, the board has determined that no employees should be asked to leave the company as a result of the investigation, however.
The company said it will restate its annual financial statements for the years 2004, 2005 and 2006 and for the first quarter of 2007.
It said it will also make an adjustment of about $8 million to boost its tax expense for the tax accounting for deductible stock options.
A new oversight committee of the board comprised of independent directors has been created to examine executive compensation, trading by insiders and hiring practices, among other matters.
Brian Bidulka was named chief accounting officer. He is currently corporate controller.