07/10/2012 04:00 EDT | Updated 09/08/2012 05:12 EDT

RIM Annual Meeting: Blackberry Execs Expect Shareholders' Ire Over Company's Woes

WATERLOO, Ont. - Shareholders of Research In Motion expressed their frustration Tuesday with the company's delayed product launch and eroding market share, with some calling for a major upheaval in its leadership.

RIM's annual meeting served as the first time since last summer that most of the company's investors have had an opportunity to speak directly to RIM's executive team, including new chief executive Thorsten Heins.

Several came with a clear message, including one shareholder who took to the microphone first to offer his best wishes for Heins, before turning his attention to the board members who have helped guide the company since its heyday as the dominant smartphone.

"They've let this problem that RIM faces ... get out of hand so badly before they did something about it," he said.

"I don't think, personally, that any of the old directors of the company should sit here today," he added, suggesting that RIM undergo a major upheaval akin to the recent shake up at Canadian Pacific Railway.

The crowd of about 300 people, many shareholders, broke into applause after the comments.

However, despite the vocal criticism, shareholders still re-elected all of the board nominees, though John Richardson had support withheld by 30.2 per cent of the votes.

Barbara Stymiest, the company's new chairwoman, defended RIM's leadership, while assuring shareholders that more changes were coming to the board.

"We have a slate of 10 (board members), four of which have been there less than a year," she said in an interview after the meeting.

"Part of the dynamics in managing any board is managing smooth transitions, and we will continue to do that going forward.

"It's an important process, we take it seriously, and we're working very hard with a lot of potential new directors," she added.

At the meeting, others turned their attention to Heins, who took over the top position in January from co-CEOs Jim Balsillie and Mike Lazaridis. One shareholder questioned his pay package, which could fetch Heins between $8 million and $12 million if he exits the company.

Vic Alboini, an activist shareholder and chief executive of Jaguar Financial, said unfortunately Heins has lost credibility.

"Every now and then there are statements to the effect that things are fine, there's no need for change," he said.

"The reality is, look at the share price, things are not fine. There are a lot of shareholders that are experiencing a lot of pain."

But some shareholders said they were holding out on hopes the board can turn the troubled company's fate around.

Shareholder George Sinclair of London, Ont. said he was putting his faith in RIM's current plan, which includes delaying the release of the BlackBerry 10 operating system and new products until next year, so that additional improvements can be made to prepare it for the market.

"I'm convinced that's the way to go at this time," he said.

"I'm not prepared to give up yet. I think there's still a reasonable chance that the company can be successful again."

Shares in the company (TSX:RIM), which traded for more than $30 per share less than a year ago, have recently dropped below $8. On Tuesday, they closed down 36 cents to $7.44 at the Toronto Stock Exchange.

Since Heins took over the top job in January, the company's share price has continued to fall as speculation grew that RIM's efforts are too little too late, and the BlackBerry maker could ultimately be sold off in parts.

Shareholder Gerald Bissett said he believes selling RIM's operations off should be considered a last resort.

"I think they should wait until the new system comes out," he said. "If that doesn't work, ball game over."

Investors in the company have been looking for any hints of a timeline for the BlackBerry 10 launch, which was pushed from later this year into the first three months of 2013, missing the key back-to-school and holiday shopping seasons. Reports on Tuesday said the products will appear on the market in January, though Heins said that setting a specific date was premature.

"To give the specific month, I don't think this is prudent right now," he said in an interview after the annual meeting.

"Needless to say we're trying to do it as soon as we can."

Heins said the rollout of the new Blackberry lineup will include a touchscreen version quickly followed by a keypad model.

He said the plan is to offer consumers both "high-end" and "mid-tier" models of both versions, while the new operating system could become available on a lower priced "entry level" model through a licensing agreement.

"What we really want to play is the one-two punch," he said of the rollout plan.

Two weeks ago, RIM announced that it would cut about 5,000 jobs as part of a plan to slash costs across the organization. Among the changes, Heins said, the company will reduce the number of sites manufacturing BlackBerrys to three from 10.

Heins also said he expects RIM will book another operating loss in the second quarter as the company faces extra pressure on the sales price of its older BlackBerry models.

In late May, the company said it had hired J.P. Morgan Securities LLC and RBC Capital Markets to evaluate various strategies, including potential partnerships and licensing.

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