The board of directors of Rogers Communications Inc. voted Thursday to remove Edward Rogers as chairman following a board battle over the leadership of the company.
Rogers said John A. MacDonald would take on the role of interim chairman while Edward, the son of company founder Ted Rogers, would remain on the board.
Earlier today, CEO Joe Natale said he had “strong and unequivocal support” from the board of directors as the telecommunications and media company announced plans to investigate its governance practices business.
His comments follow a scuffle in the boardroom of the family business that spread to audiences and pitted Edward against his sisters and mother.
Edward Rogers reportedly tried to replace Natale with the company’s former CFO, Tony Staffieri, but faced opposition from other directors, including other members of the Rogers family. He has since publicly criticized the company’s performance, saying it could do better.
Natale first learned of the plan to overthrow him as CEO when Staffieri inadvertently called him while discussing the matter, according to a source familiar with the events. The Globe and Mail first reported this development on Thursday. (Rogers spokesperson Andrew Garas declined to comment.)
Following the extraordinary dispute, which even saw Toronto Mayor John Tory attend a meeting of the Rogers family and their advisers, the company has now announced that it will “undertake a full governance review. company ”.
Edward’s sister, Melinda Rogers-Hixon, who is vice chair of the board, will also join a new committee created to manage interactions between Edward and Natale.
“Be assured that I continue to work in collaboration with each member of the board of directors”, Natale said Thursday in a conference call with investors after the company released its third quarter results.
“The Executive Oversight Committee was created to advise and assist the President and I – the CEO – in the performance of our respective functions and to establish clear protocols for interactions between the President and members of the management”, said he added later.
The Rogers board met on Wednesday and Natale said Thursday morning that he “felt supported” by the board and that the meeting included a “very strong, collaborative and thoughtful discussion with all board members.” .
He said he didn’t expect the dispute to affect the company’s plans to acquire Shaw Communications Inc. in a $ 20 billion ($ 26 billion, including debt) deal. which still requires regulatory and government approval.
“I feel as comfortable as I have been in the past with the Shaw transaction, both in terms of our ability to get it approved and the synergies behind it,” Natale said, referring to the savings expected from the massive rapprochement. to bring.
Like many incumbent companies in Canada that remain in the hands of the founding families, the Rogers family controls the company through a trust that owns over 97% of the voting shares, while the vast majority of investors own shares without voting rights.
Today it is run by a team of professional managers, led by Natale, but the family retains an inordinate influence over the company.
“It’s a good share structure as long as everyone in the family gets along well and what they do in the family is good for the shareholders who are not in the voting bloc,” said Glenn Rowe, professor of general management and strategy at Ivey Business School at Western University. “But when shareholders argue, it can get really nasty and then you could argue that no one is going to win. “
“At least they recognize there’s a problem and they’re trying to do something about it,” Rowe added, referring to the company’s plans for a corporate governance review and the new board committee. ‘administration.
Rogers said Thursday that its profit, or net income, was $ 490 million in the quarter ended Sept. 30, down 4% from $ 512 million in the same quarter last year. Overall revenue was flat at $ 3.67 billion.
Earnings were 94 cents per diluted share, up from $ 1.01 per diluted share a year ago. On an adjusted basis, Rogers said it earned $ 1.03 per diluted share, down from adjusted earnings of $ 1.08 per diluted share at the same time last year. Analysts on average expected adjusted earnings of $ 1.02 per share, according to financial market data firm Refinitiv.
The company said profits were slowed mainly by its heavily broadcast sports media business, where revenues declined from last year when the NHL and NBA ended their seasons in the third quarter due to schedule changes related to the pandemic. These seasons traditionally end in the second trimester.
Game day income for the Toronto Blue Jays increased as COVID-19 restrictions were relaxed and fans were allowed to attend games at Rogers Center.
On the telecommunications side, Rogers added 175,000 new wireless subscribers on contracts, the most in 13 years, spurred by the reopening of many sectors of the economy across Canada.
A note from a TD Securities Inc. client called the results positive, saying the increase in new wireless subscribers and the low churn rate was a “huge beat.”
With a report from The Canadian Press
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