BlackBerry sale talks: Change of control profitable for CEO Thorsten Heins

TORONTO: BlackBerry Chief Executive Officer Thorsten Heins stands to make $55.6 million if he sells the company and is ousted. That's the amount he's entitled to receive if BlackBerry has a change of control and Heins is pushed out by the new owners, according to a May proxy filing. The figure, which includes salary, incentive payments and equity awards, is based on BlackBerry's stock price at the end of the fiscal fourth quarter. The plan was approved by shareholders at its annual meeting on July 9.

Shares of BlackBerry have surged 19% in the past week on speculation that the struggling Canadian smartphone maker will be bought, broken up or taken private, bringing a windfall to investors. The Waterloo, Ontario-based company announced plans on August 12 to form a board committee to consider a potential sale, as well as joint ventures and partnerships.

Prem Watsa, a Toronto businessman and BlackBerry's largest shareholder, is stepping down from the board, fueling speculation that he may play a role in rescuing the company. Still, finding potential buyers may not be easy. BlackBerry bankers JPMorgan Chase & Co. and RBC Capital Markets quietly contacted possible bidders for almost a year and found little interest in acquiring the company, said two people familiar with those discussions.

If Heins is terminated without a change of control, he is entitled to $22 million in salary, incentive payments and equity awards, based on the March 28 share price. The payout would include his base salary of $3 million and about $72,000 in benefits and retirement savings. He also is eligible for an annual incentive payment of $2.8 million, which climbs to $4.5 million in a change-of-control scenario.

The equity awards are valued at $16.1 million if he's simply terminated and $48 million if it happens at the hands of new owners. The documents don't specify what might occur in a more complex breakup situation.

Despite the stock's recent surge, the shares remain 24% below the March 28 price on which the company's payout scenario was calculated. Adjusting for the difference, Heins would be eligible for a payout of about $44 million, according to Bloomberg calculations.