BlackBerry’s Thorsten Heins Stands to Make Up to $22 Million Upon Exit
According to the terms of a new employment contract struck in April, Heins stood to land a payday worth nearly $56 million in the event that he was fired following a sale of the company.
Now that talks to sell out to a group of investors led by Fairfax Financial have failed and Heins is out, a smaller exit package kicks in.
Upon termination without a change of control, Heins stood to walk out the door with a combined compensation package amounting to about $22 million, though the equity-based portion — then valued at about $16.1 million — is easily worth less now because BlackBerry shares are trading at such lower levels than they were when the deal was struck. By my math, that’s worth about $7 million as of today.
It breaks down like this: Assuming that this termination is “without cause or for a good reason,” Heins gets his current base salary of $3 million for 24 months, plus benefits. Then there’s $5 million payable either as cash or as restricted stock units (RSUs) that vest immediately. And more stock options and RSUs will continue to vest over 24 months, as if he were still employed. So, if the share price recovers for some reason, or if a new buyer materializes, Heins will benefit.
The valuation of the equity portion is based on BlackBerry’s share price on March 28, when it closed at $14.45 a share, or more than twice what it’s trading at today, which as of a few minutes before noon ET was $6.07.
Not the payout Heins was looking for, but as golden parachutes go, not so bad, either. It’s in the same league as that of Léo Apotheker, the former CEO of Hewlett-Packard, who presided over that company for a disastrous 11 months and walked away with an exit package worth a combined $26 million, give or take.
Here’s BlackBerry’s proxy, filed earlier this year, that spells it all out. Scroll down to page 50 to see all the terms: