Investors in Research In Motion Ltd should not re-elect one-time lead director John Richardson to the board of the struggling BlackBerry maker at Tuesday's annual meeting, proxy advisory firm Glass Lewis said.
The advice repeats a long-standing Glass Lewis concern that Richardson failed to properly oversee the provision of stock options to RIM employees, which were erroneously back-dated over an eight-year period.
Senior executives paid millions of dollars to settle regulators' charges relating to the stock options, and the company restated $250 million of earnings in late 2006 and early 2007.
"We hold this director accountable for the poor oversight that eventually led to restatement," Glass Lewis said in its report, which was dated June 26, but not previously made public.
Richardson, an accountant who has headed several insurance companies and trade bodies, has been a RIM director since 2003 and was lead director from 2007 until earlier this year.
RIM was not immediately available for comment on the Glass Lewis report.
Tuesday's annual meeting in RIM's hometown of Waterloo, Ontario, gives RIM shareholders a platform to vent their frustrations with the company, which in the last year has shed almost three-quarters of its market value amid dismal earnings, product delays and service failures.
Glass Lewis also opposed Richardson's re-election last year. He received 90 percent of votes in favor, a strong majority but the smallest margin of any board member.
Glass Lewis said it had no concerns about the other nine board members RIM is proposing, including Chairwoman Barbara Stymiest, a former bank executive, and Chief Executive Thorsten Heins.
RIM has drastically changed its executive and board structure since its last annual meeting, where it fended off a call from disgruntled investors to split the CEO and chairman's roles, then shared by Mike Lazaridis and Jim Balsillie.
The pair have since stepped down from both roles, and Balsillie has left the board. Lazaridis remains as a vice-chairman and head of an innovation committee.
Value investor Prem Watsa bought a large stake in RIM and won a board seat in January, at the same time that Stymiest took over as chairwoman and Heins became chief executive.
Financier Timothy Dattels joined last month, soon after RIM said it had hired investment bankers for a strategic review of its business model aimed at new partnerships and licensing deals. RIM has not ruled out a sale of the company.
Glass Lewis said it was encouraged by the changes, but was "somewhat surprised to see that none of the new additions have expertise in technology or significant knowledge of the industry," given the departure from the board of a former executive of Spanish mobile-phone operator Telefonica SA.
RIM said Antonio Viana-Baptista left the board last month to concentrate on his role as CEO of Credit Suisse in Iberia.
RIM's stock closed almost 5 percent higher on Thursday at C$7.81 on the Toronto Stock Exchange and $7.69 on Nasdaq. At a recent peak in February 2011, the shares changed hands at around $70.
($1=$1.01 Canadian)
