Chances are if you keep on BlackBerry news, you will have recently read the report put out by the Canadian Centre for Policy Alternatives (CCPA) that claimed John Chen was the highest-paid CEO in Canada with total earnings of more than $89.7 million in 2014. At the time the report was issued, it seemed a little off in regards to how that number was established and as such, we chose not to post it, because we didn't believe it was an accurate representation. Turns out, we were not the only ones who felt this way. The Inside BlackBerry blog has published a new BlackBerry fact check titled, Clearing Up Misconceptions About Our Executive Compensation, that claims the reports offer up a misleading view of John Chen's compensation.
In a study published on January 4, the Canadian Centre for Policy Alternatives (CCPA) reported that John Chen was the highest-paid CEO in Canada two years ago. The study was based on a review of annual filings made by 249 Canadian public companies in 2014, and its findings were widely reported by Canadian news outlets. The media reporting on this topic presents a misleading view of our CEO's compensation.
Fully 95% of the compensation attributed to Mr. Chen in the CCPA study relates to an award of restricted stock units (RSUs) granted when he was appointed as Executive Chairman and CEO of BlackBerry in November 2013. These time-based RSUs vest during the second half of a five-year period, to align Mr. Chen with the long-term interests of BlackBerry shareholders. To date, none of the RSUs have vested, and he has not received the benefit of any of the shares attributed to him in the CCPA study.
In 2014, Mr. Chen did not receive any additional stock-based compensation. He also waived his right to a guaranteed cash incentive bonus for the year, electing to participate instead in the annual variable incentive plan (VIP) alongside his direct reports. As disclosed in our 2015 annual filings, which were not mentioned in the CCPA study, Mr. Chen's total compensation decreased by 96% from the previous year.
At BlackBerry's annual meeting in 2015, over 90% of the company's shareholders voted in favor of a "say-on-pay" resolution affirming the Board's approach to executive compensation.
As I mentioned, something felt off about the numbers. Simply taking his company shares and directly relating those to cash doesn't work out. There's a metric ton of variables there that seemingly were not accounted for or made clear. In any case, you all can look at BlackBerry's side of the equation now and judge for yourself.