BlackBerry Ltd (NASDAQ:BBRY) has come out strongly to clarify the misconception that their CEO, John Chen was the highest paid CEO in Canada. Center for Policy Alternatives (CCPA) had initially published a report which clearly showed Mr. Chen to be the highest paid CEO but according to Blackberry, the report took the company’s share and related them to cash. This however, is the partial truth as there are lots of factors that have to be considered before such a conclusion can be drawn.
CCPA had based their study on annual filing reviews that had been made by 249 Canadian companies during 2014. After this study was concluded, various media outlet reported on the story and blackberry have apparently come in support of their CEO with the primary aim of explaining how the information is misleading.
According to Blackberry, 95% of the compensation that were in the CCPA study came about due to the award of restricted stock units (RSU) when Mr. Chen was appointed the Executive Chairman and CEO of Blackberry. This was in November 2013. The RSU are time-based, and they only vest in the second half of five years after Mr. Chen was appointed. The main purpose of these stocks is to align the CEO with the long-term interest of the company. Since Mr. Chen appointment, none of the RSUs have been vested, and he has not received any compensation from them.The CCPA study had indicated that he had received the stock units.
Blackberry also noted that Mr. Chen had not received any additional stock-based compensation in 2014. During this period, Mr. Chen had also waived his right to guaranteed cash incentives. He had instead participated in the annual variable incentive plan. This had been disclosed in the 2015 Blackberry annual filing, thought the CCPA had failed to mention this. Blackberry also noted that Mr. Chen total compensation had decreased by about 96% from the previous years.
It is worthy to note that during 2015’s annual meeting, the shareholders had voted for ‘say-on-pay’ resolution. This was an affirmation of the board’s approach to issuing executive compensation.
This clarification will most definitely receive a great acknowledgment from Blackberry fans and the general public.