Thorsten Heins wasn’t asked to leave BlackBerry, but his hand was forced, The Globe and Mail reported Nov. 11, sharing the first details to emerge about the change in strategy at the Canadian phone maker.
BlackBerry on Nov. 4 announced a new financial strategy—the decision to keep the company public and accept a $1 billion investment from Fairfax Financial, its biggest shareholder, and other investors in exchange for the chance to buy a 16 percent share of the company, instead of selling outright to Fairfax for $4.7 billion.
In the same statement, it shared that Heins was resigning and John Chen, a tech veteran who helped turn around Sybase, had been appointed executive chair of BlackBerry’s board of directors and would serve as interim CEO, as the company searched for a new permanent CEO. But the details, as listed in BlackBerry’s press release (though not explicitly so), were reversed—Chen was hired and so Heins decided to leave.
“Thorsten did a very good job, given the hand that he was dealt, but resigned because you can’t have two people being in charge,” Prem Watsa, CEO of Fairfax, told the Globe. “He said to me, ‘It’s very appropriate for me to resign. I like John Chen, but I’m CEO and there is one person in charge.'”
Watsa added that neither he nor Chen asked Heins to resign. And while Heins had managed the important development of launching BlackBerry 10, more was needed.
“It seemed to me, going forward, you needed someone with the enterprise background and a very good track record,” Watsa continued, according to the report. “John Chen has grown up in Silicon Valley. He knows most of the players in the tech world.”
Heins, in a letter sent to the BlackBerry staff Nov. 4 (and acquired by the Wall Street Journal), called Chen a “renowned expert in technology and global markets” and said that his “deep roots in the technology industry will be invaluable to BlackBerry.”
He went on to say that he remained “BlackBerry’s biggest fan” and will be “cheering from the sidelines.”
It’s been reported that Heins will walk away with $22 million. Had BlackBerry been acquired, as it had considered, and Heins been fired, his package might have totaled $48 million, according to a May proxy filing discovered by Bloomberg.
Chen also stands to be well-compensated for his troubles.
BlackBerry will pay him a base salary of $1 million, plus a performance bonus of $2 million. Over the longer term, he’ll also be rewarded stock in BlackBerry worth $85 million at the current share price, the Globe reported Nov. 8.
According to regulatory documents filed Nov. 8, according to the Globe, Chen’s contract states that if his “employment is terminated without cause, he will be entitled to be paid his salary for the remainder of the year in which he is terminated as well as two times his base bonus (total of $6 million), and be entitled to benefits (excluding those relating to transportation) for 18 months following such termination.”
In a statement, Chen called BlackBerry “an iconic brand with enormous potential.” But, he added, “it’s going to take time, discipline and tough decisions to reclaim our success.”