RIM Sees $250 Million Option Hit
Research In Motion (RIMM) said restating earnings to fix accounting errors tied to questionable stock option grants will wipe $250 million off past profits.
The Waterloo, Ontario, maker of the BlackBerry wireless email device said CEO Jim Balsillie will step down as chairman as a result of the probe. RIM said Balsillie was responsible for authorizing stock option grants, which turned out to be backdated in 63% of cases between 2002 and 2006, the company said.
"In many instances, including in connection with some option grants to the co-CEOs, COOs and the CFO (the 'C-level officers')," RIM said, "hindsight was used to select grant dates with favorable pricing on grants, resulting in grantees receiving an in-the-money benefit that was not recorded in the financial statements as stock-based compensation."
RIM said its finance chief, Dennis Kavelman, will become operating chief, and that Balsillie and co-CEO Mike Lazaradis have agreed to give the company 10 million Canadian dollars to defray costs tied to the probe.RIM had previously predicted that the option probe would result in a charge of $25 million to $45 million. The company said it continues to work on its restatement. RIM had previously said it aimed to file restatement paperwork by the end of its March 3 fiscal year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV