Well one of two things was going to happen to Research In Motion (RIM), either the company would be sold or new leadership would take the helm. Months and months of speculation has been discussed across water coolers all over the world, but late Sunday RIM issued a press release stating that Mike Lazaridis and Jim Balsillie, the Co-Chief Executives of Research In Motion Ltd., and RIM’s Board of Directors named Former Chief Operating Officer Thorsten Heins as President and CEO on the advice of Balsillie and Lazaridis.
According to the press release:
Waterloo, ON – The Board of Directors of BlackBerry® maker Research In Motion (RIM) (NASDAQ: RIMM; TSX: RIM) today announced that, acting on the recommendation of its Co-Chief Executive Officers to implement the succession plan they previously submitted to the Board, it has unanimously named Thorsten Heins as President and Chief Executive Officer. Mr. Heins was also appointed to RIM’s Board. The Board acted after conducting its own due diligence. Both appointments are effective immediately.
Mike Lazaridis, former Co-Chair and Co-CEO, has become Vice Chair of RIM’s Board and Chair of the Board’s new Innovation Committee. As Vice Chair, he will work closely with Mr. Heins to offer strategic counsel, provide a smooth transition and continue to promote the BlackBerry brand worldwide.
Mr. Heins said he looks forward to continuing to work with Mr. Lazaridis, globally recognized as a technology pioneer. He said, “Mike created a whole new way of communicating and I look forward to continuing our close collaboration.”
On the transition to CEO by Mr. Heins, Mr. Lazaridis said, “There comes a time in the growth of every successful company when the founders recognize the need to pass the baton to new leadership. Jim and I went to the Board and told them that we thought that time was now. With BlackBerry 7 now out, PlayBook 2.0 shipping in February and BlackBerry 10 expected to ship later this year, the company is entering a new phase, and we felt it was time for a new leader to take it through that phase and beyond. Jim, the Board and I all agreed that leader should be Thorsten Heins.”
Jim Balsillie remains a member of the Board. “I agree this is the right time to pass the baton to new leadership, and I have complete confidence in Thorsten, the management team and the company,” he said. “I remain a significant shareholder and a Director and, of course, they will have my full support.”
Mr. Lazaridis said that he decided to move from Co-Chair to Vice Chair of the Board in order to return the public’s focus to what is most important: “the great company we have built, its iconic products, global brand and its talented employees.”
Mr. Lazaridis added, “Thorsten has demonstrated throughout his tenure at RIM that he has the right mix of leadership, relevant industry experience and skills to take the company forward. We have been impressed with his operational skills at both RIM and Siemens. I am so confident in RIM’s future that I intend to purchase an additional $50 million of the company’s shares, as permitted, in the open market.”
Mr. Heins said he believes that RIM has tremendous potential. He joined RIM from Siemens Communications Group in December 2007 as Senior Vice President for Hardware Engineering and became Chief Operating Officer for Product and Sales in August 2011.
“Mike and Jim took a bold step 18 months ago when RIM purchased QNX to shepherd the transformation of the BlackBerry platform for the next decade,” Mr. Heins said. “We are more confident than ever that was the right path. It is Mike and Jim’s continued unwillingness to sacrifice long-term value for short-term gain which has made RIM the great company that it is today. I share that philosophy and am very excited about the company’s future.”
Mr. Heins said that RIM has a strong foundation on which to build. “We have a strong balance sheet with approximately $1.5 billion in cash at the end of the last quarter and negligible debt. We reported revenue of $5.2 billion in our last quarter, up 24% from the prior quarter, and a 35% year-to-year increase in the BlackBerry subscriber base, which is now over 75 million.”
Mr. Heins said, “BlackBerry 7 has been well received. We are very excited about PlayBook 2.0 and BlackBerry 10. The reception of our products at this year’s Consumer Electronics Show was encouraging.”
He continued, “RIM earned its reputation by focusing relentlessly on the customer and delivering unique mobile communications solutions. We intend to build on this heritage to expand BlackBerry’s leadership position.”
Mr. Heins said that RIM has grown quickly. “As with any company that has grown as fast as we have, there have been inevitable growing pains,” he said. “We have learned from those challenges and, I believe, we have and will become a stronger company as a result.
“Going forward, we will continue to focus both on short-term and long-term growth, strategic planning, a customer- and market-based product approach, and flawless execution. We are in the process of recruiting a new Chief Marketing Officer to work closely with our product and sales teams to deliver the most compelling products and services.”
Barbara Stymiest, who formerly served as a member of Royal Bank of Canada’s Group Executive and has been a member of RIM’s Board since 2007, has been named the independent Board Chair. John Richardson, formerly Lead Director, will remain on the Board. Prem Watsa, Chief Executive Officer of Fairfax Financial Holdings, also was named to the Board, expanding it to 11 members.
Speaking on behalf of the Board, Ms. Stymiest said: “We believe that Thorsten is the right executive to succeed Mike and Jim. He has 27 years of telecommunications experience, including four years at RIM in senior management positions. As a Board, we have been impressed with his outstanding management skills, his leadership and his accomplishments within the company.”
Ms. Stymiest also expressed the Board’s respect and admiration for Messrs. Lazaridis and Balsillie, the company they built, and the steps they have taken to position RIM for the future.
“They created RIM, nurtured it, and in the process not only built an iconic brand, but literally pioneered the smartphone industry,” she said. “It is Canada’s largest tech company and one of the largest in the world.”
A conference call is scheduled for tomorrow morning where I’m sure more details on the management change and RIM’s future will be shared, but it will be interesting to see how the stock market treats the news tomorrow. RIM;s share price closed on Friday at $17.24.