James Turner, speaking for the OSC panel yesterday said that the fact that RIM's stock options were improperly dated for 10 years was "shocking."But he stressed that there were no allegations of fraud by any of the respondents in the case, but rather "negligence."In total, the respondents have been ordered to pay million to settle the allegations.
Balsillie, Lazaridis and Kavelman have been ordered to pay 38.3 million to RIM to account for improper profits from stock option backdating.
Beyond such negative controlling measures, a more positive empowering approach based on ethics may also be necessary.
Third, we assess the practice of backdating stock options, as an illustration of the agency problem, in terms of whether the practice is legally acceptable or ethically justifiable.RIM's high-profile co-founders Jim Balsillie and Mike Lazaridis, and Dennis Kavelman, the company's former chief financial officer, will pay million to RIM to account for improper gains and investigation costs related to the stock options.The OSC alleged that the benefit to all employees was million in improper stock market gains from 1996 to 2006 when RIM options were improperly dated.In addition, Balsillie, Lazaridis, Kavelman and Angelo Loberto, the company's former director of finance, will pay million in penalties and investigation costs to the commission.The settlement deal will allow Balsillie, Lazaridis and Kavelman to contribute their payments to RIM simply by not exercising stock options that they still hold.