Research In Motion Ltd. is facing rising pressure to overhaul its management as a proxy advisory firm said the BlackBerry maker’s combined chairman and chief executive officer structure provides “inadequate independent checks” at a “turbulent” time.
Glass Lewis & Co., which advises investors that manage more than $15 trillion, said RIM shareholders should support a proposed split in the chairman and CEO roles. The proposal, made by Northwest & Ethical Investments LP, will be voted on at RIM’s annual shareholder meeting July 12. Jim Balsillie and Mike Lazaridis are both co-CEOs and co-chairmen at the Waterloo, Ontario-based company.
“We are concerned that the current co-chair/CEO structure provides inadequate independent checks on executives and management, particularly since the co-CEOs founded the company and are its largest shareholders,” Dimitri Zagoroff and Marian Macindoe, Glass Lewis analysts, wrote in their report.
RIM has been losing share in the smartphone market to Apple Inc. and handset makers that use Google Inc.’s Android software. RIM said on June 16 that quarterly revenue may decline for the first time in nine years, sending its stock down 21 percent the next day. The shares have lost about half their value this year.
Shareholders are increasingly in favor of management change and the resolution will likely pass, said Robert Walker, vice president, ethical funds at Northwest & Ethical.
“It is a bit of a perfect storm in terms of long-term shareholder coalition around the concept that chairman and co-CEO should be separated,” Walker said in an interview.
