Following the collapse of a $4.6 billion buyout, Blackberry CEO Thorsten Heins has officially stepped down. He has been replaced, for the time being, by John Chen. In his new role, Chen will receive a pay package worth $88 million. His annual salary and bonus’ will amount to $3 million along as 13 million Blackberry restricted stock, valued as of today at $85 million.

Chen is no new comer to the IT industry, working with the software company Sybase until 2010. When he became chairman in the late ’90s, the company was trading at a record low. He managed to turn the company around, and sell it for $6 billion. Blackberry is hoping that he will be able to duplicate his past performance. Not only is the hiring of Chen strategic in itself, but this pay plan really incentives the new CEO to preform a miracle, and turn this company around. If Chen can turn this company around, and even double the stock price, he will make $170 million. Blackberry Turnaround.. or Takeover? Bloomberg Video

I found this article interesting because it relates to a discussion we had in the Human resources lecture. We were asked a clicker question regarding the best ways to incentives employees. The options were: reduction of hours, reduction of wages, incentivized pay, and a few other options. The majority of the class choice either reduction of hours or incentivized pay. Obviously, Blackberry would side with the later.  I think that this strategy will be incredibly successful. As we have studied in OB, self-interest plays a key role in determining the actions of individuals with in an organization.  Money matters, so hopefully this potential gain with motivate Chen even more to once again create a miraculous turnaround.

Sources:

http://kitchener.ctvnews.ca/hiring-agreement-could-net-new-blackberry-ceo-85-million-1.1532848

http://www.bloomberg.com/news/2013-11-04/chen-s-blackberry-revival-task-mirrors-sybase-in-1990s.html