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Thorstein Heins Mangles BlackBerry, Walks Away With $16 Million Severance

Tyler Durden's picture




 

The last time we looked at Thorsten Heins' potential "golden parachute" farewell gift from Blackberry for, well, completing the destruction of the company started by former Co-CEOs Mike Lazaridis and Jim Balsille when he took over in early 2002, the amount could have been as gargantuan as $55 million. This number has subsequently been revised modestly lower, and while nobody is precisely sure just what Heins is entitled to, according to the Globe and Mail's latest calculation, the golden parachute in question could be as large as $16 million. Then again, considering RIMM stock back then was $18/share and by the time Heins left BBRY will be just over $6, one wonders if instead of any bonus Heins shouldn't instead be paying the company's long suffering shareholders for virtually destroying what was once the world's dominant smartphone brand.

From Globe and Mail:

Outgoing BlackBerry Ltd. chief executive officer Thorsten Heins could leave the company with about $16-million (U.S.) in severance payments and shares under the terms of a new employment agreement he signed with the company in April, regulatory filings show.

 

The company’s latest shareholder proxy circular, filed in May, says Mr. Heins would have been eligible to receive as much as $55.6-million in severance if the company was sold and he was dismissed. But he is also eligible for a large severance payout – as much as $22-million based on March figures – if he is simply terminated with no sale of the company.

 

However, his final severance amount will vary from the March calculation included in the proxy circular because much of the pay comes from equity holdings, which have changed since the chart was done in March.

 

BlackBerry announced Monday it has ended takeover talks with Fairfax Financial Holdings Ltd., and said Mr. Heins is leaving the company. A company spokeswoman said BlackBerry could not comment on Mr. Heins’s severance payments “at this time.”

 

Under the terms of the severance agreement, Mr. Heins is eligible to receive two times his base salary – worth $3-million in total – as well as a portion of his annual bonus for the current year, based on his standard corporate and individual performance factors. As of March, that was estimated to be worth $2.8-million, but it is unknown what his bonus payout is currently worth.

 

The equity components of his severance are the largest piece, however, estimated at $16-million as of March.

His current equity holdings in BBRY, aside from incentive option grants, amount to a tiny 180k shares of stock.

Mr. Heins also has share units acquired previously, which are currently worth about $4-million based on BlackBerry’s share price of $7.10 on Monday morning, and has 813,000 stock options, which are underwater and not exercisable based on the company’s current share price.

 

Both the old share units and his stock options will continue to vest for 24 months, which means the final payout under his severance agreement will not be determined for two years.

 

He also owns 179,504 common shares, worth about $1.3-million based on Monday’s share price.

 

Based on the current value of his common shares and share units, along with the $5-million payout for his new share units and his eligible salary and bonus payments, Mr. Heins could leave BlackBerry with about $16-million.

 

That total is not the final payout value, however, because his options and share units will not fully vest for two years and the final bonus amount payable is not yet known.

It is known: it is too high. And the poetic irony? If Heins ends up being hired as a bankruptcy advisor by a company that may one day advise BBRY on its potential chapter 11 or 7 filing. That would be the definition of true "full lifecycle" service coverage.

 

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Mon, 11/04/2013 - 15:33 | 4119962 IndyPat
IndyPat's picture

Falling FORWARD!

Wow. Hope he's able to scrape by until he finds another job he's not good at.

Mon, 11/04/2013 - 15:37 | 4119990 HoofHearted
HoofHearted's picture

Seriously, if I could get a $16MM severance from my job, I wouldn't bother looking for the next one. Sure, Uncle Sugar could take "his" half of the severance, no problem. Pay off bills, get set up in the house and with cars with another million. So now I have to find a way to live on $7MM and the interest. Even 1% leaves me with an okay amount, considering that I have no house payment or car payment. Oh shit, Obamacare just fucked that up for me. Nevermind...

Mon, 11/04/2013 - 15:41 | 4119998 IndyPat
IndyPat's picture

Yeah, but see...you want your next package to be moar than the last one. Looks better on the resume. He's clearly established his severance earning potential.

Mon, 11/04/2013 - 16:09 | 4120087 Buckaroo Banzai
Buckaroo Banzai's picture

I don't always take a struggling company and run it right into the ground, but when I do, I prefer to grab $16 million on the way out the door.

STAY THIRSTY MY FRIENDS.

Mon, 11/04/2013 - 16:35 | 4120167 NoDebt
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I'm telling you their CEO was just never the same after all that time on the island with the Skipper, Gilligan, Mary Ann, Ginger and that awful nagging wife of his.  Poor choice to run a tech company.  Can't spend that much time on a deserted island and not fall behind the technology curve.

Mon, 11/04/2013 - 16:40 | 4120176 johnconnor
johnconnor's picture

I'd do the same thing but we are thinking like the peasants we are...

If you look from his point of view just think that cocaine is expensive, high class hookers are 10K and the new G-6 he was going to get is over 20 million.... if only he could have laid off a few thousands more employees before this thing implodes...he needs moar!

Mon, 11/04/2013 - 15:42 | 4120001 Dareconomics
Dareconomics's picture

Not only does he get the severance, but Uncle Ben will maintain the value of his securities portfolio indefinitely:

http://dareconomics.wordpress.com/2013/11/04/around-the-globe-11-04-2013/

Mon, 11/04/2013 - 17:40 | 4120371 Son of Loki
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“There’s never been a better time then now to be a Wall Street CEO.”

Mon, 11/04/2013 - 15:38 | 4119994 kralizec
kralizec's picture

Too bad for them...I could have fucked up for just $8m!

Mon, 11/04/2013 - 15:48 | 4120021 pelican
pelican's picture

This is one of the reasons the US is done.

Mon, 11/04/2013 - 15:59 | 4120061 kralizec
kralizec's picture

The past tense is a nice touch.  +

Mon, 11/04/2013 - 16:06 | 4120074 lcs
lcs's picture

The US is done because Apple beat BB at their own game, or because the loser got a consolation prize?

Mon, 11/04/2013 - 16:55 | 4120238 malikai
malikai's picture

Just wait until you see the next guy.

Mon, 11/04/2013 - 18:43 | 4120542 NidStyles
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Then people wonder why the economy is in such dire conditions, it's because of this culture of creating wealth out of thin air and congratulating yourself for your efforts by giving yourself a huge bonus for doing nothing...

Mon, 11/04/2013 - 15:33 | 4119971 orangegeek
orangegeek's picture

roadkillberry

Mon, 11/04/2013 - 16:02 | 4120060 akak
akak's picture

The only blackberries I am familiar with are the kind in my pies.

This modern obsession with electronic gadgets of all kinds, adult toys for the consumerist sheep really, is utterly sickening.  All hail the ongoing juvenilization of society.

Mon, 11/04/2013 - 18:14 | 4120475 Pure Evil
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Just as long as the peasants are comfortably distracted while their liberties are slowly eliminated.

Mon, 11/04/2013 - 15:33 | 4119972 css1971
css1971's picture

Elop and Balmer put this guy into the shade.

Mon, 11/04/2013 - 16:18 | 4120098 Buckaroo Banzai
Buckaroo Banzai's picture

Yeah, but in fairness, Elop had a different job to do. Elop was supposed to run the company off the cliff so Ballmer could stand at the bottom and pick up the pieces for pennies on the dollar.

Heins' job was to ruin the only cellphone company that had its own secure, encrypted communications network.

See the difference? Elop was supposed to take the most valuable cellphone company in the history of the world and massively cripple it, making sure to leave something of value behind. Heins on the other hand was hired to make sure BBRY went away completely.

Mon, 11/04/2013 - 15:34 | 4119977 alphamentalist
alphamentalist's picture

did HR confiscate his BB during his exit session?

Mon, 11/04/2013 - 15:35 | 4119981 IndyPat
IndyPat's picture

No shit...and did security help him carry his money bags to the parking lot?

Mon, 11/04/2013 - 17:36 | 4120364 Cacete de Ouro
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Anagrams of Thorsten Heins:

Just a few:

Thinnest Horse
Herein Nth Toss
Nether Shit Son
Three Shots Inn
Sheets Horn Nit
These Nth Irons
Teeth Horn Sins
Intense Shh Rot
Entire Shh Snot
Sneer Thin Shot
Resent Thin Hos
Enter Shits Hon
Seen Shit Thorn
Teen Shit Shorn
Reset Thin Nosh
He Hornets Nits
He Tennis Short
Eh Interns Shot
Eh Rotten Shins

Mon, 11/04/2013 - 21:33 | 4120976 akak
akak's picture

You neglected to add:

 

Three snot shin

No her hens tits

Sith teen horns

Snort hen heist

Shorten his net

Teeth horn sins

Her nets no shit

His rotten hens

Mon, 11/04/2013 - 15:58 | 4120056 FuzzyDunlop21
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No he has an iPhone.

Mon, 11/04/2013 - 15:34 | 4119978 HoofHearted
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Golden parachute? Looks like the shareholders would prefer to give Heins a golden shower.

Mon, 11/04/2013 - 15:34 | 4119979 alien-IQ
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16 mil severance to drive a company to the ground? Fuck, where can I sign up for a gig like that? I'll destroy a company for half that.

Mon, 11/04/2013 - 16:00 | 4119996 knukles
knukles's picture

For a mere $250K I'd be pleased to advise anybody on how to fuck things up.
What with my sick, cynical, dark humor, we're guaranteed fun in the crematoriums. 

Mon, 11/04/2013 - 16:14 | 4120102 Colonel Klink
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Well needed after the rope and guillotines.  Oh wait, that's the other problem.

Mon, 11/04/2013 - 15:41 | 4120000 fonzannoon
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He may have walked with a few bucks but it's going to be tough for him with no pension and free healthcare. With ZIRP he is not incentivized to save, so that 16 mil has to go into the market, so he is going to have to take on a lot of risk. Maybe he can leverage this into a position as Sebelius replacement and get himself hooked up with some benefits.

Can someone please explain to me how we will ever get hyperinflation when wages and benefits keep getting cut? Won't workers have to unite and demand higher pay for inflation to take off?

Mon, 11/04/2013 - 18:56 | 4120557 NidStyles
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Hyper-Inflation does not require wage increases to start. The wage increases are the side-effect of the eclipsing of Hyper-Inflation in the market. In other words the wage increases come after the Hyper-Inflation has already taken over and gone exponential.

 

The stagflation of the 70's was a very narrow dodge of Hyper-Inflation. Now those mechanisms that were meant to keep it in check are gone, so the inevitable will just be all that more likely to happen sooner rather than later. Rest assure though, it will happen.

 

This is just another one of the examples of the monetarist confusion of the issue and for some reason their inability to actually understand what inflation is and what causes it. I do think they have on thing correct though, and that is the cyclic nature of the problem. They are cyclically wrong and proving themselves to be idiots every time they formulate their schemes thinking they are the first to try it. 6000+ examples from previous failures do not lie, what they are advocating is only in their best interest, and they will fuck everyone else without blinking. 

Mon, 11/04/2013 - 15:55 | 4120047 NOTaREALmerican
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Re:  Fuck, where can I sign up for a gig like that?

You've got to be a pathological optimist first. 

It helps if you can level-set the table-steaks in a going-forward space too, but - really - you need that optimism first. 

Mon, 11/04/2013 - 19:00 | 4120573 trebuchet
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hhahaa not a hope in hell of being an optimist if reading ZH - no room for realism in todays boardroom but hey ho!

Mon, 11/04/2013 - 15:39 | 4119991 carbonmutant
carbonmutant's picture

Camera Companies want some of those patents....

Mon, 11/04/2013 - 15:38 | 4119992 ebworthen
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Rewarding failure, the new American tradition.

Mon, 11/04/2013 - 15:43 | 4120009 TimTom
TimTom's picture

They're Canadian

Mon, 11/04/2013 - 15:51 | 4120030 ebworthen
ebworthen's picture

Six of one, half-dozen of another; but thanks, I stand corrected.

"Rewarding Failure; the new North American Tradition".

Mon, 11/04/2013 - 15:40 | 4120002 Scalaris
Scalaris's picture

Let's contemplate for a moment, the seemingly, to many, reasonable ratio of management remuneration to the degree of fucking up a company.

I understand that corporate accountability is an oxymoron but this borders to the ridiculously absurd like no other.

Mon, 11/04/2013 - 15:51 | 4120035 NOTaREALmerican
NOTaREALmerican's picture

Re:  ridiculously absurd like no other

He took a tremendous risk signing on to lead Blackberry.   I think 16M barely covers the future hardships he'll encounter from this experience.   I'm sure he's suffered enough and we - as a society - need to help our job creators through difficult times like this.   

I'd propose we shouldn't tax this 16M either.   We - as a society - should be greatful that he took extrordinary risks; risks that all of us would have benefited from had he successed.    That 16M is just a thank-you from a greatful society to the risk-takers who made this country great-n-glorious.

Mon, 11/04/2013 - 15:41 | 4120004 Frank N. Beans
Frank N. Beans's picture

a "modestly lower" amount, from 55 million to 16 million.

somehow I think that's more that modestly lower, but what the hay, 16 mil is 16 mil

 

Mon, 11/04/2013 - 15:47 | 4120017 IndyPat
IndyPat's picture

16 mil is 16 mil moar than the righteous old school foot-to-ass he deserves.

Mon, 11/04/2013 - 15:47 | 4120018 IndyPat
IndyPat's picture

Double tap

Mon, 11/04/2013 - 15:46 | 4120012 robertocarlos
robertocarlos's picture

you're looking at it the wrong way. Heins gave you the chance to buy BB for a 2/3rds discount. Outstanding.

Mon, 11/04/2013 - 16:00 | 4120063 FuzzyDunlop21
FuzzyDunlop21's picture

I wouldnt buy BB with someone else's money

Mon, 11/04/2013 - 15:46 | 4120013 Dagny Taggart
Dagny Taggart's picture

But the guy has options... now he is qualified for academia or public service.

Mon, 11/04/2013 - 15:45 | 4120015 NOTaREALmerican
NOTaREALmerican's picture

Really, hasn't the man suffered enough?   He'll use that 16M to create more jobs in the future.

Mon, 11/04/2013 - 15:47 | 4120019 willwork4food
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"Thorsten, you fucked up our company with your new ideas that suck moose. We've had enough.Thorsten, you've got 48 hours to clean out your desk. "

By the way, here's 16MM.

Mon, 11/04/2013 - 15:51 | 4120033 IndyPat
IndyPat's picture

You know that interview question they always ask? Where do you see yourself in 5 yrs?
Next time, I'm going to answer "walking away from this company with 16 mil in severance"
I'm in for sure.

Mon, 11/04/2013 - 16:07 | 4120080 syntaxterror
syntaxterror's picture

Damn, where do I send my resume? I'm pretty sure I'm "ready for the challenge" to "lead Blackberry through these challenging times" and earn millions upon millions of Bernanke Bucks.

Oh, wait I just found the link to submit my resume: http://www.blackberry.com/fuck_us_and_earn_millions.html

Mon, 11/04/2013 - 16:16 | 4120110 Z_End
Z_End's picture

So apprently failure IS an option... take note kiddies...

Mon, 11/04/2013 - 16:44 | 4120191 NoDebt
NoDebt's picture

Yeah.  Somebody wake up Obama and break this revelation to him gently.

Mon, 11/04/2013 - 16:33 | 4120158 kalasend
kalasend's picture

IMHO, seriously, BBRY deserved their fair share of difficulties for running a globally scaled tech firm outside of silicon valley. 'nuf said. The rest is just trying to pull shits together from a ship meant for sinking.

Mon, 11/04/2013 - 16:41 | 4120178 pragmatic hobo
pragmatic hobo's picture

why does a company with $2B in cash go raise more cash when their shares are tanking?

Mon, 11/04/2013 - 16:43 | 4120193 Racer
Racer's picture

To pay for golden parachutes of course

Mon, 11/04/2013 - 19:39 | 4120651 Nick Jihad
Nick Jihad's picture

Dunno. Perhaps the money is stranded overseas, and it's better to dilute shares, versus a 35% haircut to repatriate overseas cash?

Mon, 11/04/2013 - 17:32 | 4120347 w00dmann
w00dmann's picture

You really can't blame Heins for the ultimate failiure of Blackberry.  He's been chief peddler for what, 18 months?  His brain-dead predecessors ran the company thoroughly into the ground long before he became CEO, and he had little chance to resurrect it.  He managed to finish the new OS platform (his predecessors started) and finally get it out the door without too many hiccups, and for that he deserves some credit.  Unfortunately it was too little too late.  But in all seriousness, he was given the job of captain of the Titanic long after it fatally struck the iceberg.

Mon, 11/04/2013 - 19:43 | 4120656 Nick Jihad
Nick Jihad's picture

Microsoft and Nokia have lost smartphone marketshare as well. It's not easy to compete with Apple and Android.

Mon, 11/04/2013 - 17:41 | 4120374 css1971
css1971's picture

Blackberry was renowned for being encrypted and secure.

Good thing we don't need that now with the NSA looking out for us. Way to go Thorstein, If you hadn't folded like a cheap suit to various governmenty people would be flocking to the service.

Mon, 11/04/2013 - 18:55 | 4120566 trebuchet
trebuchet's picture

I am led to beleive that one MAJOR financial insitution (and im sure others are following) is moving its staff from blackberrys to iphone 5s.

'nuf said.

Mon, 11/04/2013 - 17:43 | 4120381 Son of Loki
Son of Loki's picture

Same time, Uncle Sam cuts Food Stamp rations.

Ironic.

Mon, 11/04/2013 - 17:51 | 4120418 Mitch Comestein
Mitch Comestein's picture

BK.  Ahhhh, there still is no debt on the company books and about 2.6 bill in cash & st paper.  Ask JCP if there is a difference.  Now there will be with the convertible offering in the future.  It is either improvement or a death from a 1,000 cuts for the company from here.

Mon, 11/04/2013 - 18:40 | 4120533 Fix It Again Timmy
Fix It Again Timmy's picture

Better than playing Lotto and it takes even less skill...

Mon, 11/04/2013 - 18:58 | 4120571 MachineMan
MachineMan's picture

I can screw up things as well as the next guy and will only charge 10% of what they are paying....

Mon, 11/04/2013 - 21:46 | 4121030 GlobalCtzn
GlobalCtzn's picture

His name alone makes me want to bitch slap him......................

Tue, 11/05/2013 - 00:24 | 4121638 BigSpruce
BigSpruce's picture

It certainly pays to be a memeber of the elite tree house club.

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