John Gray, an insightful columnist with Canadian Business, has a couple of pointed and well researched pieces on RIM’s stock options backdating revelations. He drew some of his observations from our postings on the subject at Finlay On Governance and from interviews with me.
Here is an excerpt:
It seems clear that RIM’s board was not exactly holding management’s feet to the fire, says J. Richard Finlay, the founder of the Toronto-based Centre for Corporate and Public Governance. “Surely [RIM’s directors] must have known huge numbers of options were being granted. Did it ever wonder how option dates were being set and how much that might be costing shareholders? The board appears to have been merely a passive bystander in these events,” Finlay writes on his website.
The report fails to answer many fundamental questions about the options backdating scandal, says Finlay. For instance, it doesn’t identify which RIM executive received backdated options, who approved those options and how much those options were worth. The report reveals that RIM’s independent directors received backdated options but goes on to say the directors did not realize they were backdated and the amount of money covered by the options is “immaterial.”
How is it possible the directors did not know they were getting backdated options? Isn’t the board in charge of the company’s option plan?
It is encouraging that amidst the candy floss approach taken to RIM’s report by so many journalists and stock analysts, business writers like Mr. Gray still believe in digging into the facts and not just accepting the off-the-cuff and inconsistent responses the company has been churning out. The articles can be seen in their entirety here and here.