Thorsten Heins' golden parachute not based on merit: analyst
Ousted BlackBerry CEO stands to make millions based on pure bargaining power, analyst says
Despite tanking sales, tumbling share prices and hundreds of layoffs at BlackBerry, former company chief Thorsten Heins stands to make millions and one analyst says his golden parachute has nothing to do with merit.
"The way I look at it is not so much, 'Did he deserve it or not?', as this is [so] old school," Armine Yalnizyan, an economist with the Canadian Centre for Policy Alternatives told the The Morning Edition host Craig Norris Wednesday.
Yalnizyan says Heins' contract is reminiscent of the days of golden parachutes before the 2007-2008 financial crisis, "where people could walk away with hundreds of millions of dollars in their pocket even though they tanked the company's fortunes."
"That speaks to bargaining power. Pure bargaining power. Not whether somebody deserves it or not, but how you get your lawyers to work for you to craft a deal so that you have an exit pay package, which most of us don't have," she said.
Heins to receive unknown payout
Thorsten Heins signed a termination agreement with BlackBerry in May, which gave the CEO a lump sum payment of $55 million if the company was sold and he was to be terminated.
If he wasn't terminated, he would received a payment of $22 million based on the stock value of the company.
"About $15 million of that was stock value and the stocks have tanked under his watch. So he would have walked away with $15 million if he had been terminated," Yalnizyan said.
However under what conditions Heins left the company is unknown, according to Yalnizyan, since there are conflicting reports about whether he was turfed, or stepped down voluntarily.
"We really don't know what happened behind the scenes."
"We will learn how much he gets on exit at some point," she said, "presuming if he cashes in his stocks because so much of the contract is tied to the value of the company."
"That's what an employment contract does, whether it's fair or not, just like a union, if you agree to it, that's the deal and so the deal is not about deserving this, the deal is strictly about bargaining power."
The exact amount Heins receives will eventually be made public, according to Yalnizyan, but not until BlackBerry publishes its next quarterly update.