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Senior management at Research In Motion Ltd. faced fierce criticism at its annual general meeting in Waterloo, Ont., on Tuesday amid declining sales and an uncertain future with a delay of its new smartphone platform.
Barbara Stymiest, RIM's new chair of the board, began the meeting by stressing that she knows some shareholders are frustrated with the smartphone maker's troubles but that the board has faith in the revamped management team.
"We understand that the company's performance has not met expectations," Stymiest told the capacity crowd at an auditorium on Wilfrid Laurier University's campus. "For the board's part, we remain committed to the management team."
But some of the investors present were not as committed to the board. During a somewhat confrontational question and answer session, one investor asked why members of RIM's board had let the company's continuing problems fester for so long, and argued that none of the old members of the board should stay on.
"What this company needs is an upheaval," like the one that took place at CP Rail, he said, drawing applause from some of the 300 or so people at the meeting.
Even before investors had a chance to vent, a proxy shareholder asked several tough questions about the composition of the board.
Vic Alboini, of Jaguar Financial, first asked whether the board was searching for additional technology talent to augment the board - to which Stymiest said they were searching, and had enlisted a firm for such a task. Then Alboini asked for the number of votes withheld on the re-election of directors; many, when the list was read out, had percentages of votes withheld above 20 percent, with director John Richardson having nearly 40 percent of votes withheld.
"Clearly this is not an overwhelming approval," Alboini said.
Following the formal part of the meeting, RIM chief executive officer Thorsten Heins took to the stage to address investors. As he did in the company's most recent earnings conference call, Heins acknowledged RIM is facing serious challenges.
"I want to assure you I am not satisfied with the company's performance over the past year," he said.
Although he did not reveal many new details, Heins updated investors on the company's plans for the year ahead - chiefly, the launch of the new BlackBerry 10 line of smartphones, which has once again been delayed. Originally scheduled for launch early this year, then this fall, the new phones will now not hit store shelves until the first quarter of 2013.
Heins said the reason for the delay is the challenge of integrating large amounts of software code into the new platform. Once again, the CEO said he will not compromise on the issue of release dates, and argued that some telecom carriers prefer a 2013 launch because next-generation wireless networks will be more widely operational by then.
Heins also updated investors on RIM's ongoing cost-savings efforts, which notably include a massive round of layoffs that will see 5000 employees - almost a third of the company - lose their jobs.
The company also plans to save money by cutting its external manufacturing facilities from 10 to three, and by outsourcing its global repair services, the CEO said.
As part of its strategic review, RIM has also made changes to its senior management team, including the hiring of new chief marketing, operating and legal officers. Still, Heins once again predicted the company will lose money in its second quarter, and that the turnaround will take more time to implement.