BlackBerry Ltd will pay its new interim CEO a base salary of $1 million, a bonus of up to twice that amount as well as stock awards potentially worth some $85 million, in the hopes of turning around Canada's most prominent technology company.
John Chen, the second consecutive chief executive officer at BlackBerry to receive a bumper package, will have to help the embattled smartphone maker regain its footing and win back market share ceded to the likes of Apple's iPhone and a range of devices that run on Google Inc's Android operating system.
Chen was credited with turning around Sybase Inc in the late 1990s. Sybase, an enterprise software company, was eventually acquired by SAP AG in 2010.
Chen's share awards only begin to vest after he completes three years with BlackBerry, and the majority of the options will vest only after he completes his fifth year, according to a regulatory filing late on Thursday.
Should Chen be fired without cause, he will be paid up to $6 million, according to the filing. Chen's appointment came after BlackBerry stunned many on Monday when it abandoned plans to sell itself and instead opted to raise funds via a $1 billion notes offering led by Fairfax, its largest shareholder.
Fairfax, led by investment guru Prem Watsa, had said it was investing $250 million in the offering.
In its filing on Thursday, BlackBerry said Canso Investment Counsel Ltd is investing $300 million in the offering, while Mackenzie Financial, Markel Corp, Qatar Holding, and Brookfield Asset Management are buying the remainder.
As part of the financing deal, BlackBerry has agreed to pay a fee to the investors if it does reach an alternate deal that results in the sale of the company, either before, or within 30 days of the close of this deal.
Depending on the circumstances, the fee could range between $135 million and $250 million. The investors have also pledged to a standstill agreement, for a period of one year, that restricts them from owning more than 19.9% of the company's outstanding shares, a move likely aimed at preventing any creeping takeover of BlackBerry.
Thorsten Heins, who is forced to step down as BlackBerry's CEO as one of the terms attached to the financing deal, could also be set to receive millions in severance after two years in the job. The exact amount will depend on the terms settled with the company.