After more than a decade of criticism for excessive spending on its executive suite, BlackBerry Ltd. BB-T seems to have a bargain in new CEO John Giamatteo.
Mr. Giamatteo, an internal hire who will retain his current job running BlackBerry’s cybersecurity business, will receive a salary of US$700,000 and a package of stock valued at US$6-million, the company disclosed in a U.S. regulatory filing Tuesday.
It’s a sharp contrast from BlackBerry’s compensation for John Chen, the man Mr. Giamatteo replaces.
BlackBerry valued Mr. Chen’s first-year compensation package in 2013 at almost US$85-million, much of that in the form of a massive grant of stock. In 2018, when the company extended his contract for another five years, it made another stock award valued at US$106.3-million.
The performance of BlackBerry stock over the course of Mr. Chen’s tenure ultimately dented the value of those awards. When he departed in early November, BlackBerry shares were trading about 28 per cent below the $6.75 TSX close on the day he joined the company. U.S. investors were down 45 per cent owing to the decline in the Canadian dollar over that period.
Mr. Chen sold more than 11 million BlackBerry shares from 2016 to 2022, for gross proceeds of US$98.9-million, according to trading records filed with Canadian securities regulators. BlackBerry says all those stock sales were made for the purpose of tax withholding, with none made as active trading decisions. He left in November holding 10.4 million BlackBerry shares, worth US$37-million at the time.
BlackBerry’s pay practices resulted in multiple negative recommendations from proxy advisory services on its advisory say-on-pay vote and in elections for individual directors. The company failed its say-on-pay vote in 2022, with just 44 per cent support for its pay philosophy. Prem Watsa, the BlackBerry board chairman who personally negotiated the Chen extension in 2018, had 49.3 per cent of votes withheld from him in that election.
BlackBerry said in its Tuesday filing that Mr. Giamatteo will receive restricted stock valued at US$2.7-million that will vest, or become usable, over the next three years.
He also receives performance-based shares valued at US$3.3-million. The company said 70 per cent of the shares will vest based on BlackBerry’s achievement of a total shareholder return goal. The remaining shares’ vesting is based on a goal for the margin of adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization. BlackBerry did not disclose what the goals are.
Mr. Giamatteo’s bonus target will be 100 per cent of his annual salary. He can also receive a one-time special cash bonus with a target of $350,000. Half depends on achieving the goal of separating the company into two business units: cybersecurity and Internet of Things. The other half is payable if the company achieves breakeven or positive operating cash flow for the first quarter of fiscal 2025.
In his previous role as the president and chief revenue officer of McAfee Corp.’s enterprise business group, Mr. Giamatteo made US$2.11-million in 2019.
With files from Sean Silcoff.