BlackBerry CEO Thorsten Heins is likely to get around $55.6 million if the deal with Fairfax Financial Holdings goes through.
Earlier, Nokia CEO Stephen Elop secured $25 million after Microsoft decided to buy Nokia’s phone business for $7.2 billion ( Nokia to pay $25 million to Stephen Elop as termination payment )
Earlier, Google’s $12.5 billion acquisition of Motorola Mobility has assisted its India-born CEO Sanjay Jha to receive a $66 million Golden Parachute compensation package.
This kind of pay packages are attracting criticism from the investor community. These three CEOs could not improve market share of their respective handset makers. Their poor performance, in fact, forced promoters to look for a buyer.
Reuters report says that Fairfax boss Prem Watsa, who is set to acquire BlackBerry for $4.7 billion with some external support, played a role in tripling compensation to Heins to an estimated $55.6 million if there is a change of control at BlackBerry, up from $18.9 million previously.
Watsa, Fairfax’s chief executive, joined BlackBerry’s board in January 2012 and was one of three directors charged in March with reviewing the compensation of BlackBerry CEO.
The $55.6 million figure is based in part on BlackBerry’s share price in early March, and the stock has fallen by more than a third since then, which may mean that Heins’ golden parachute would be worth less, said the report.
Meanwhile, BlackBerry on Thursday said its revenue for the second quarter of fiscal 2014 decreased 45 percent year-on-year and 49 percent quarter-on-quarter to approximately $1.6 billion. This is the worst performance for the smartphone maker.
Poor response to BlackBerry 10 smartphones impacted revenue growth, BlackBerry said.
The revenue breakdown for the quarter was approximately 49 percent for hardware, 46 percent for service and 5 percent for software and other revenue.
During the second quarter the company recognized hardware revenue on approximately 3.7 million BlackBerry smartphones.
Most of the units recognized are BlackBerry 7 devices, in part because certain BlackBerry 10 devices that were shipped in the second quarter of fiscal 2014 will not be recognized until those devices are sold through to end customers.
During the quarter, approximately 5.9 million BlackBerry smartphones were sold through to end customers, which included shipments made prior to the second quarter and which reduced the Company’s inventory in the channel.
BlackBerry posted quarterly loss of $965 million. This includes pre-tax charge against inventory and supply commitments of approximately $934 million.
In first quarter, BlackBerry posted loss of $84 million. Its loss in second quarter of last year was $229 million.
Google Motorola wants BlackBerry resources
BlackBerry’s debacle in the smartphone market will be utilized by other tech companies, including Google’s Motorola Mobility unit.
Motorola Mobility said it plans to set up a new hub in Waterloo, located about an hour’s drive west of Toronto.
“We have a small space right now and we’re looking to grow considerably,” said Derek Phillips, engineering director for Motorola Canada. He declined to specify the number of new hires expected, but said the company was seeking computer science and engineering talent.
BlackBerry’s job cuts are expected to strike a blow to the city and regional economy, given the knock-on-effect on retailers, the property market and local service providers.
BlackBerry supports several developers globally. It offers promotional budget to several events in Canada.
Baburajan K reporting from Ontario