May 26, 2017

BlackBerry Chief Admits Release of New Phones in U.S. Was Flawed

But Mr. Heins, speaking at the company’s annual meeting, told investors BlackBerry just needed more time for a turnaround — and he again sought their patience.

Not everyone was biting. One shareholder, referring to one of the new phones, the BlackBerry Z10, told Mr. Heins: “My sense is that the rollout of the Z10 was a disaster.”

“Were we perfect at the launch?” Mr. Heins responded. “Probably not. Was it a disaster? I don’t think so.”

After more than two years of development, the new phones and their new operating system were supposed to give BlackBerry smartphones capabilities similar to those of phones made by Apple and Samsung, the dominant forces in the market. But hopes have vanished that the new phones would swiftly increase market share in the United States — now just 0.9 percent, according to a survey from Kantar Worldpanel ComTech.

Late last month, BlackBerry said that it had shipped just 2.7 million of the new models, about a million fewer than analysts expected. That disappointing news set BlackBerry’s stock sharply downward and eliminated the possibility that the annual meeting would be a turnaround celebration.

When Mr. Heins introduced the company’s new phones in New York this year, he spoke to an excited crowd, a situation that was repeated at a meeting this spring with enthusiastic developers. But on Tuesday, when he faced a crowd of shareholders and questions about the weak sales of those phones, the reception was far more muted.

And maybe that is the best he could have hoped for. A few weeks ago, when the shipment numbers were released, the company also reported an $84 million loss in the latest quarter. BlackBerry shares still have not recovered — and a chorus of harsh questions about the direction of the business have not gone away.

Mr. Heins again warned investors to expect more losses during the current quarter, while the company increases its spending on marketing and other promotions for the new BlackBerry 10 line of phones. And although the company has spent the last two years saying the phones were the centerpiece to its future, Mr. Heins repeatedly said on Tuesday that “we are not a devices-only company,” and he outlined his hopes for growth in its data services business.

He attributed the disappointing reception for BlackBerry 10 to the United States market.

“It is really a challenge in the U.S.,” Mr. Heins said at the meeting, which was webcast from the University of Waterloo in Ontario. When another shareholder asked him why the company had been unable to win over American investors, particularly ones based in New York, he said: “I would absolutely admit that this is an uphill battle.”

Richard Piasentin, the managing director of sales and marketing for the United States, left BlackBerry last month, Adam Emery, a spokesman for the company, said on Tuesday.

Some of problems with the e BlackBerry 10 releasseemed more related to the products than to advertising or lack of prominence in carriers’ stores, which had been cited as problems.

Some buyers of the Q10, a model that includes BlackBerry’s signature keyboard, have said they were disappointed to discover that it initially could not synchronize calendar and contact information with corporate systems that use Microsoft Outlook. Others discovered mail syncing issues that they had not had with previous BlackBerrys. And although BlackBerry continues to expand the apps offered for the phone, many important ones are missing, and assessments of their overall quality are mixed.

Among the disappointed was Mark R. McQueen, the president and chief executive of Wellington Financial in Toronto. While Mr. McQueen is a BlackBerry loyalist, his frustration with the Q10 became so great that he wrote two detailed posts enumerating its problems on his blog, which is widely followed in Canada’s financial community. He wrote that the phone’s shortcomings had prompted him to sell his BlackBerry shares at a loss.

“The sad reality is that BlackBerry management has failed to deliver on the incredibly modest expectations of someone who has held shares in the company, on and off, since the late 1990s,” Mr. McQueen wrote.

Many technology reviewers praised several features of the new phones. Mike Gikas, the senior editor for electronics at Consumer Reports, said the new phones were “pretty good but they don’t have the pizazz of top-shelf performers. No one’s dying for these phones.”

He said that whenever he was asked for his thoughts about the new BlackBerrys, “the next question is: ‘Do you think they’re going to be around?’ And that’s a consideration for people on a two-year contract.”

Article source: http://www.nytimes.com/2013/07/10/technology/blackberry-chief-admits-release-of-new-phones-in-us-was-flawed.html?partner=rss&emc=rss

Azerbaijan Gas to Take a Southern Route

The Austrian energy company OMV, the lead shareholder in the company vying for the northern route, said it had been informed it would not win the pipeline deal, which by some estimates was to cost $4 billion.

The formal announcement, which was expected in Azerbaijan on Friday, is likely to favor a project called the Trans Adriatic Pipeline, which would run about 900 kilometers, or 560 miles, through Greece and Albania, ending in southern Italy. The Austrian route would have been about 1,300 kilometers.

The winning route will convey gas to Europe through a connection to a new pipeline planned to run through Turkey that links back to the Azeri field through Georgia.

A spokesman for the assumed winner, the Trans Adriatic Pipeline group, which is based in Baar, Switzerland, declined to comment on Wednesday.

The reasons for the decision by the gas field’s developer — the Shah Deniz II group — were not disclosed on Wednesday. The group includes Socar, the Azerbaijani national oil company; BP of Britain; Statoil of Norway; and Total of France.

The choice of a South European route is a milestone in a long effort by Azerbaijan and its partners — particularly BP, the field operator — to bring gas from the huge reserves beneath the Caspian Sea directly to Europe in competition with Russia.

Although Azerbaijan’s role as a supplier to Europe would start relatively small, it could grow if the country develops additional finds known to lurk beneath the floor of the Caspian Sea.

BP and other members of the Shah Deniz II group are expected to take a 50 percent shareholding in the pipeline. Shah Deniz II is a gas project in the Caspian Sea, off eastern Azerbaijan, which with its export pipelines is expected to cost more than $40 billion. The group has not made a final investment commitment to proceed with the project, although a decision is expected this year.

A separate Azeri field, the Shah Deniz I, is already producing and exporting gas to Georgia and Turkey.

The biggest loser in the deal is OMV, which did the major research and planning for the northern-route consortium, called Nabucco West, investing about 37 million euros, or $48 million.

Winners include Statoil and a Swiss company, Axpo, which are large shareholders in the Trans Adriatic Pipeline project. E.On, the big German utility, is also a shareholder.

Article source: http://www.nytimes.com/2013/06/27/business/global/europe-route-chosen-for-azerbaijan-gas.html?partner=rss&emc=rss

MetroPCS Shareholders Approve Merger With T-Mobile USA

The deal, first announced in early October 2012, had looked set for defeat until earlier this month, when Deutsche Telekom gave in to pressure to reduce the combined company’s debt.

Activist shareholder P. Schoenfeld Asset Management had led a proxy battle against the original deal, while biggest MetroPCS shareholder Paulson Co had also threatened to vote against it. Both investors have said they were pleased with the improved terms.

But some shareholders said they were happy to see MetroPCS combine with a larger player, regardless of the details.

“It was significant that they sweetened the offer but I would have voted in favor of the previous terms,” said Robert Capps, a Dallas-area shareholder and telecom executive.

It was not immediately clear what percentage of shareholders voted in favor of the deal. MetroPCS said those figures would be available later Wednesday.

MetroPCS shares fell 11 cents to $11.58 in morning trading.

Shareholders will receive $4.06 per share in cash plus stock equivalent to 26 percent of the combined company in the reverse merger and Deutsche Telekom will own the rest.

BETTER POSITION AGAINST RIVALS

MetroPCS, a provider to cost-conscious consumers who pay for calls in advance, and T-Mobile USA are looking to combine their spectrum assets to compete better with bigger rivals.

By tying up with MetroPCS, Deutsche Telekom hopes to provide T-Mobile USA with the spectrum to build a network capable of handling the vast data volumes that U.S. consumers and businesses use on smartphones and tablets.

Some Deutsche Telekom shareholders, however, worry that even a successful merger might not be enough for T-Mobile USA to catch up with rivals.

T-Mobile USA lost 515,000 contract customers in the fourth quarter of 2012, although it recently announced smaller losses of 199,000 contract customers in the first quarter.

The company recently overhauled its price structure to eliminate most phone subsidies, and started selling Apple’s iPhone for the first time. But its network quality lags Verizon and ATT, which have invested massively in fourth-generation mobile technology in recent years.

The United States is key to the investment case for Deutsche Telekom. It earned 26 percent of group revenue there last year and 20 percent of its operating profit.

The German group has long searched for a way to help T-Mobile USA gain critical mass to compete. In 2011, antitrust regulators blocked a $39 billion deal bid for ATT to buy T-Mobile USA.

The merger also paves the way for what some investors and bankers think Deutsche Telekom really wants – to ultimately reduce its exposure to a highly competitive market.

For now, Deutsche Telekom has committed to holding its shares in the new combined entity for 18 months.

(Additional reporting by Sinead Carew in New York, Harro ten Wolde in Frankfurt and Leila Abboud in Paris; Editing by Gerald E. McCormick and Bernadette Baum)

Article source: http://www.nytimes.com/reuters/2013/04/24/technology/24reuters-metropcs-tmobileusa.html?partner=rss&emc=rss

Common Sense: Sham Shareholder Democracy

It turns out there are many stronger cases — 41.

That’s the number of publicly traded companies where directors actually lost their elections last year, meaning that more than 50 percent of the shareholders withheld their votes of approval. Yet despite these resounding votes of no confidence, they remained in their posts.

At least at H.P., all the directors got a majority of the votes cast, and even then, two resigned and a third gave up his post as chairman. But at Cablevision Systems Inc., the New York cable and media company controlled by the Dolan family, three directors lost shareholder elections twice in the last three years — in 2010 and 2012 — and received only tepid support in 2011. Nonetheless, the three remain on the board.

“As fiduciaries, we can’t sit by and let the board make a mockery of our fundamental right to elect directors,” said New York City’s comptroller, John Liu, who oversees the city’s pension funds, which own more than 532,000 Cablevision shares. “Shareowners need accountable directors who will ensure the company isn’t being run for the benefit of insiders at our expense.”

Mr. Liu sent the company a letter earlier this month urging it not to nominate the three again and threatening a proxy fight. “The fact that all three directors remain on the board suggests that one of the few rights” afforded shareholders is “illusory,” he wrote. Mr. Liu warned that he’d oppose their election and that “my office will also encourage other shareholders to join us.”

Mr. Liu didn’t get a response, but a Cablevision spokesman told me this week, without being specific, that Mr. Liu’s letter was “woefully misinformed, inaccurate and political.” In proxy materials released by Cablevision this week, all three directors — Thomas V. Reifenheiser, John R. Ryan and Vincent S. Tese — were renominated for new terms.

Even directors who resign after losing votes don’t necessarily leave. Two directors of Chesapeake Energy in Oklahoma, V. Burns Hargis, president of Oklahoma State University, and Richard K. Davidson, the former chief executive of Union Pacific, were opposed by more than 70 percent of the shareholders in 2012. Chesapeake requires directors receiving less than majority support to tender their resignations, which they did. The company said it would “review the resignations in due course.” (After a shareholder outcry, Mr. Davidson left a month after the vote, but and Mr. Hargis only left last month.)

At Iris International, a medical diagnostics company based in Chatsworth, Calif., shareholders rejected all nine directors in May 2011. In keeping with the company’s policy, they submitted their resignations. And then they voted not to accept them. The nine stayed on the board. (The company was acquired in late 2012 by the Danaher Corporation.)

A list of companies retaining directors who were rejected by shareholders in 2012 — so-called zombie directors — was compiled by the Council of Institutional Investors, which represents pension funds, endowments and other large investors. The list includes not just smaller, family-controlled companies, where disdain for shareholder views may be more ingrained, but also Loral Space Communications, Mentor Graphics, Boston Beer Company, and Vornado Realty Trust.

“It’s appalling,” Nell Minow, a co-founder of GMI Ratings, which rates companies based on risk to shareholders, including corporate governance issues, told me this week. “It’s the No. 1 issue in corporate governance.” She noted that the reason such a thing is possible is that many companies operate under a “plurality” voting system, in which directors run unopposed and just one vote is enough to be elected. And even companies that require a majority vote may decline to accept a director’s resignation.

Article source: http://www.nytimes.com/2013/04/13/business/sham-shareholder-democracy.html?partner=rss&emc=rss

DealBook: JPMorgan Campaigns to Keep Dimon in 2 Top Jobs

Jamie Dimon, chief executive and chairman of JPMorgan Chase.Jacquelyn Martin/Associated PressJamie Dimon, chief executive and chairman of JPMorgan Chase.

JPMorgan Chase is working behind the scenes to avert a major potential embarrassment.

In anticipation of a crucial vote at next month’s annual meeting, board members are planning to sit down with some of the bank’s biggest shareholders to make their case that JPMorgan’s influential chief executive, Jamie Dimon, should keep his chairman title, according to several people briefed on the plans.

The campaigning, which shareholders indicate is unusually proactive this year, reflects the growing worries within JPMorgan that investors may be dissatisfied with management because of the continuing fallout from a multibillion-dollar trading debacle.

In the past, such investors say they usually received only a phone call from executives in the investor relations department or met with them in person. Along with director meetings, the company this year is also contacting smaller shareholders who previously might not have heard from the big bank at all.

Voting to split the roles would send a powerful message. Few big banks have separated the chairman and chief executive positions. And when they do, it generally occurs during a broader management shake-up, as in the case of Bank of America and Citigroup.

“As we approach our annual meeting, we are conducting our normal shareholder outreach program, which offers an opportunity to review company matters with investors and which sometimes includes conversations with directors,” Joe Evangelisti, a JPMorgan spokesman, said. “As we mentioned in our proxy filed last week, a director can be available for discussions with major shareholders.”

A few big shareholders can make a difference in either direction. Last year, roughly 40 percent of the JPMorgan investors supported a proposal to split the roles.

Firms that advise some of the nation’s largest shareholders are expected to recommend again that JPMorgan separate the posts of chief executives. Other big investors, including some that voted to keep the roles together last year, remain undecided, according to a number of shareholders who spoke on the condition of anonymity because of policies against talking to the media.

“If you separate the roles, there is another set of eyes and ears,” said Michael S. Levine, a portfolio manager at OppenheimerFunds. “That is not a bad thing, because there is more accountability.” But in comparison to its peers, he said, JPMorgan has done “arguably the best job.” On proxy matters, Oppenheimer, which owns 20 million JPMorgan shares, typically votes in line with the recommendations of the advisory firm, Institutional Shareholder Services.

JPMorgan’s Trading Loss

While a shareholder vote in favor of splitting the positions would not be binding, it would put pressure on the board to split the roles. Such an outcome would also indicate that many shareholders had lost faith in Mr. Dimon, 57, a precipitous fall for an executive who successfully steered the bank through the turmoil of the financial crisis.

If the vote goes against the company and the board decides to split the role, some board members and shareholders are concerned that Mr. Dimon might resign rather than accept what would most likely be regarded as an affront. Several shareholders have said privately that succession is a major factor in their decision-making process. In meetings with directors, the shareholders said they expected to ask about succession planning, and the board’s ability to exert influence on bank management.

In recent years, companies have been moving to split the role of chairman and chief executive, either proactively or at the urging of shareholders. The move is aimed at creating stronger, independent boards, to keep management in check. Last year, Citigroup’s board, let by a strong-willed chairman, Michael E. O’Neill, voted to oust the chief executive, Vikram S. Pandit.

In February, a group of JPMorgan shareholders filed a resolution to divide the chairman and chief executive posts. Since then, those investors have been working to gather support for the proposal.

“We don’t believe the person responsible for these costly mistakes should be overseeing reforms,” said Denise L. Nappier, the Connecticut state treasurer and a supporter of the proposal.

The board, including the lead independent director, Lee R. Raymond, the former chief executive of Exxon Mobil, has been trying to flex its muscle in recent months. In January, directors voted to slash Mr. Dimon’s pay by more than 50 percent to $11.5 million, in response to the trading loss.

But ultimately the board supports Mr. Dimon. In March, the directors indicated in the proxy filing that he should keep the chairman and C.E.O. titles, encouraging shareholders to vote against the proposal. “The board has determined that the most effective leadership model for the firm currently is that Mr. Dimon serves as both,” the board said in the proxy filing.

Now, the board is dispatching directors to meet with shareholders, according to people briefed on the board’s plans. While these meetings have yet to take place, shareholders say the board is likely to stress that they understand the investors’ concerns — and that the board is on top of the company’s problems. JPMorgan is likely also to emphasis firm’s strong profitability in recent years, despite its recent missteps.

It is hard to predict the outcome of the vote.

JPMorgan is owned by a wide variety of shareholders. Well-known institutions like Fidelity Investments and the Vanguard Group are among the biggest holders, collectively owning more than 6 percent of the company. Both firms have a history of following the board’s voting recommendations at JPMorgan, according to data compiled for The New York Times by the research firms Fund Votes and Disclosure Matters.

Still, other shareholders have switched their position, according to the data providers. Last year, American Funds voted to split the roles at JPMorgan, after having opposed it in previous years. Funds managed by Franklin Templeton voted against a split in 2007, but they have favored it in subsequent years.

“The top shareholders, BlackRock and Vanguard, decide the outcome 82.2 percent of the time, and both of them have previously sided with management on this vote,” said Travis Dirks, the head of Rotary Gallop, a firm that is often hired to predict the outcome of proxy fights. “That is hard to defeat,” he said, adding that it would take hundreds of smaller shareholders to tip the scales.

Last year, JPMorgan held its annual meeting in May, shortly after it disclosed the trading loss to investors. One shareholder, who asked not to be named because of a policy against speaking to the media, said that last year the loss was fresh and it wasn’t a big factor in how his firm voted.

This year, he said, the decision isn’t as clear. The continuing fallout from the trading loss, including the bank’s frayed relationship with regulators and concerns about its risk controls, will factor into his vote. But he added that splitting the role could create more problems than it solves, by adding to the management upheaval.

Several shareholders say the lack of a clear succession plan is a significant issue. In the last two years, Mr. Dimon has remade the upper echelons of the bank’s management. More than half of the managers who helped lead the bank through the crisis have left, including James E. Staley, the former head of the investment bank, and Barry Zubrow, once the bank’s top regulatory officer. Those who remain at the bank are mostly younger executives, many of whom are in their 40s and not necessarily ready to take the reins.

“It’s tricky,” said the shareholder. “The reward for a lack of succession planning isn’t to leave Mr. Dimon with both titles. Yet we are worried about what he happens if he leaves.”

Article source: http://dealbook.nytimes.com/2013/04/05/behind-the-scenes-jpmorgan-works-to-sway-shareholders-on-dimon-vote/?partner=rss&emc=rss

I.M.F. Seeks New Chief by June 30

Shakour Shaalan, head of the board, said in a statement Friday that the board would accept nominations to the position until June 10 and then narrow the candidates to a list of three for final consideration.

The board is seeking a successor to Dominique Strauss-Kahn, who resigned this week after being charged with sexually assaulting a maid at a New York Hotel.

A Turkish official considered one of the leading contenders, Kemal Dervis, who was the country’s economy minister in 2001 and 2002, took himself out of the running for the position on Friday. “Speculation about succession at the I.M.F. has included me in the group of persons with relevant experience,” he said in a statement. “But I have not been, and will not be, a candidate.”

Treasury Secretary Timothy F. Geithner said Friday the United States wanted the post filled quickly and would support a candidate who could command broad support.

In the past, selection of a managing director, which is made by the 24 representatives of the I.M.F.’s shareholder countries, has taken months.

This time, nations like Brazil and China want a more open process that could see an official from an emerging market be appointed to the position for the first time. The job is considered one of the most prestigious among multinational institutions.

In Europe, however, politicians continued to press their case for the post to go again to a European, as has been the convention since the fund was founded 65 years ago. Christine Lagarde, the French finance minister, is emerging as the most likely European candidate.

The I.M.F. said that Mr. Strauss-Kahn would receive a separation payment of $250,000, but that his pension payments would be limited.

Article source: http://www.nytimes.com/2011/05/21/business/21fund.html?partner=rss&emc=rss