Jaguar Financial Corporation, a shareholder of Research In Motion, announced today an increase in the number of institutional shareholders who support its call for RIM to "fix its governance problems and to pursue a value creative transaction such as a sale, merger or division into separate public companies."
Shareholders supportive of Jaguar combine for 8% of the total issued shares of RIM. Jaguar is in discussions with additional institutional shareholders.
"Our game plan is to gain the support of shareholders representing a significant number of RIM shares," Vic Alboini, Chairman and CEO of Jaguar stated. "Our supportive shareholders approve Jaguar's plan to negotiate, at this point in time, changes in governance and the pursuit of a value creation transaction. A culture of management dominance at RIM must be eliminated and replaced by proper governance oversight by a committed tech-oriented Board that challenges the technical direction of management. Management dominance must be supplanted by a collaborative partnership relationship between management and the Board."
RIM failed to appoint any Chairman at all during the 2006 to 2009 period, Jaguar notes.
The lack of Board oversight and absence of an independent Chairman allowed one of the two Co-CEOs to chase his dream of buying an NHL hockey team during the same period. Despite this unfocused performance by management and RIM's subsequent underperformance, there were no consequences. Instead of consequences, the underperforming Co-CEOs were rewarded by being appointed as Co-Chairmen.
"No Chairman and a management team not fully focused during a crucial four year period resulted in a leaderless company, a problem that remains today," added Vic. "The path to negotiated change is precise and clear; it is not paved with uncertainty. It is time for meaningful and obvious change. At the Board level, RIM needs an independent Chairman and new directors with substantial technology experience."
Jaguar says that RIM's current CEOs are no longer "builders," observing signs of "broken organizational structure."
At the management level, there is no doubt that the Co-CEOs deserve historical credit for RIM's past successes, and they have been first class entrepreneurs. But their time as builders is over. There are signs of a broken organizational structure, which is highlighted by several key employee departures. In addition, management has failed to appreciate RIM's competitive environment, which largely explains RIM's declining market presence and dramatically reduced share price. RIM has become a reactionary company trying to compete in an innovative industry.
"A transformative and respected leader is exactly what RIM needs at this stage to reorient the culture, recalibrate its competitive positioning and revive the spirit of invention," said Vic.
Jaguar notes that when tech companies falter, Boards do take action: Carol Bartz is no longer CEO of Yahoo!; Leo Apotheker was recently dismissed from Hewlett-Packard; and Motorola split into two companies and brought in new management. Google also made a change in the ruling triumvirate when Larry Page was appointed as CEO to replace Eric Schmidt. It is time for RIM's independent directors to step up and bring in a transformational CEO as well as an independent Chairman, Jaguar says. These two appointments will address the "historical lack of attention and oversight at the Board level" and the need for "a laser beam focus by management" on RIM's business.
The RIM Board needs to carefully examine its strategic options, Jaguar believes, such as a sale of RIM, a merger or splitting RIM into three separate public companies: a network company, a device company, and a patent company.