The Biggest Losers: Meet three men who had a worse year than you did on the markets
Think you had a bad year on the markets? These guys did worse, way worse
by Eric Blair
As far as tenures at the top go, Thorsten Heins’ has to be seen as one of the worst in Canadian history. When he took over in January 2012, Research In Motion was a ship lost at sea, but one still capable of staying afloat (if only by virtue of the impressive pile of cash that sat on its balance sheet). When he was fired less than two years later, it was listing badly, taking on water and looking for someone – anyone – to rescue it. And yet, in return for his services, which included a fairly pointless rebranding of the company’s ticker and an underwhelming new product launch, Heins was paid roughly US$16 million in cash and shares. The company’s market capitalization during that time, on the other hand, fell by more than $4 billion.
But Heins isn’t the only corporate captain to get into some trouble of late. Here in Alberta, we have our own executives who have taken ship-shape companies and piloted them straight into the shoals, sinking the returns of shareholders in the process.
CEO, Niko Resources
January 2012 to November 2013: Share price down 93.6 per cent
If it’s any consolation for his long-suffering shareholders – that is, the ones that are still holding from a time when share prices were much higher – it’s that Sampson can feel their pain. He’s the company’s biggest shareholder, with more than three million of them in his personal portfolio, all of which were bought at much higher levels. In addition, the precipitous decline in the price of Niko shares means that the vast majority of the options he’s been issued in recent years – options that made him one of the highest paid Canadian executives – have expired out of the money. And barring a remarkable turnaround, the options he still has aren’t likely to fare any better. For what it’s worth, Sampson walked the plank – er, retired – in November.
CEO, Lightstream Resources, CEO and Chairman, Petrobank Energy and Resources
January 2012 to November 2013:Share prices down 48.5 per cent (LTS) and 69.9 per cent (PBG)
John Wright has been a particularly busy man of late. First, there was a corporate restructuring in January 2012 that saw Petrobank spin off its holdings of PetroBakken to its shareholders. And then, this past May, there was a rebranding that changed the latter’s name to Lightstream Resources. Unfortunately, none of this activity has done anything to actually boost the share prices of either company. In November, Wright gave in to the market’s demands and cut the dividend at Lightstream – although not enough to get its approval. Petrobank’s THAI technology, meanwhile, continues to be a dud, and its share price has plunged accordingly.
January 2012 to November 2013: Share price down 76.8 per cent
Estimated wealth destroyed, peak to trough: $600 million
To say things haven’t gone according to plan for Pinecrest this year is an understatement. In 2012 the company had a market capitalization of more than $800 million, but maxed out credit lines and high decline rates for its producing wells combined to reduce that number to less than $100 million a year later. Oops.
Looking to have a better year than these guys did? Click here for some tips for money managers in 2014.