Start Rim backdating stock

Rim backdating stock

Second, we discuss various stakeholder approaches (e.g., government, directors, managers, and shareholders) by which conflicts of interest (i.e., the agency problem) can be addressed.

During the 10 years, RIM's financial statements declared that the options were priced at fair market value.

OSC commissioner James Turner, speaking for the panel yesterday, said it was "shocking" that backdating went on for so long.

Beyond such negative controlling measures, a more positive empowering approach based on ethics may also be necessary.

What ethical measures need to be taken to address the agency problem?

We really want to focus 100 per cent on moving the business forward." He declined to comment on the specifics of the deal, but Balsillie and co-chief executive Mike Lazaridis, as well as former chief financial officer Dennis Kavelman, are responsible for the bulk of the payments.

They will "contribute" $38.3 million to RIM to account for the improper profits from the backdated stock options, according to the OSC order.

The OSC probe began in early October 2006, shortly after the Waterloo, Ont.-based producer of the Black Berry wireless device revealed that it had launched an internal review of its stock option grants.

RIM ultimately revised its past earnings by $250 million US to cover accounting errors uncovered in the review.

The settlement deal will allow Balsillie, Lazaridis and Kavelman to contribute their payments to RIM simply by not exercising stock options that they still hold.

The company will also bring in an expert to ensure that it has properly beefed up its financial controls and governance practices, and Balsillie will step down from the board of directors for one year.

Backdating of stock options is an example of an agency problem.