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NEW YORK - The chairman of Research in Motion, the company which makes the BlackBerry, has given up his position after admitting his role in a share options scandal that has wiped US$250 million ($368 million) off profits.
Jim Balsillie helped to secretly inflate executive compensation by pretending that options were granted on days when the share price was low.
A boardroom investigation exonerated him of intentional misconduct yesterday, but he will be stripped of the chairmanship and remain only as co-chief executive.
RIM also demoted its chief financial officer, Dennis Kavelman, who was also involved in choosing favourable options grant dates.
The pair are the latest in a string of executives across corporate America to have resigned or been demoted for their roles in a scandal that has engulfed more than 130 companies. At least six directors of technology companies are facing criminal charges.
Directors took advantage of rules that allowed a long delay before announcing share options grants, giving them time to choose days when the share price was at a low point.
Options give executives the right to buy shares at a given price at a specified time in the future. The lower the grant price, the greater the discount at which they can be purchased, and the greater the profit when they are sold.
At RIM, two out of every three options granted between February 2002 and August 2006 were secretly backdated, the company's investigation concluded. It will now have to restate accounts, and earnings over the lifetime of the options are likely to be reduced by US$250 million, it said.
Balsillie and co-chief executive Mike Lazaridis agreed to pay C$5 million ($6.24 million) each to help pay for the probe.
- INDEPENDENT
