Imagine if FFH does not sell any shares, Chen earns more than $200 million bonus and shares return to $7 per share in the coming months :-)
CEO John Chen could collect more than US$200-million in compensation if recent huge gains in its share price hold up.
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https://www.theglobeandmail.com/business/article-blackberry-share-craze-could-yield-windfall-for-ceo-john-chen/Mr. Chen is in his eighth year in his turnaround attempts at BlackBerry, and has seen the company’s stock rapidly rise and fall for much of his tenure. But he’s seen nothing like the frenetic trading this month: The shares have quadrupled, including a gain of 80 per cent since Friday. Retail investors in the U.S. and Canada, many participating in a Reddit forum called WallStreetBets, have swept them up in a frenzy of social-media speculation.
Mr. Chen is poised to be a huge beneficiary. When Mr. Chen renewed his employment contract in March, 2018, he received five million performance-based shares that he’d only be able to sell if the stock hit certain thresholds. He earns each block of one million shares if BlackBerry’s share price hits targets in one-dollar increments from US$16 to US$20 (its shares trade in Toronto and New York).
... When BlackBerry awarded Chen the shares in 2018, they traded at US$10.63, and the targets seemed aggressive, but achievable. BlackBerry needed to return 50 per cent to 90 per cent over five years for the awards to kick in, and the stock needed to nearly triple for the big cash award.
It looked much, much harder in November of last year, when BlackBerry traded below US$5.
However, in Monday’s trading, BlackBerry shares blew through all five price targets for the first time since the company made the award. The stock rose from US$14.04 on Friday to touch US$20.83. On Wednesday, it hit US$28.77 in intraday trading, before closing at US$25.10.
Mr. Chen can’t bank the shares just yet: The terms of the stock award require BlackBerrry to average the minimum price points over 10 days of trading. BlackBerry only began topping the minimums Monday, so Mr. Chen hasn’t qualified for any of the payouts yet.
Also, BlackBerry structured the share grant to keep Mr. Chen at the helm for the full five years: The stock “vests,” or can be sold by Mr. Chen, in five annual increments from 2019 to 2023. So even if BlackBerry shares stay up for several weeks, he can’t realize all of the gains for several years.
At Wednesday’s closing price of US$25.10, the five million award shares are worth US$125.5 million. If the US$90-million payment is triggered at US$30, the whole package would be worth US$240-million.
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