Bloomberg says company chairman wanted up to nine senior executives gone
TORONTO – Rogers CFO Tony Staffieri left the company due to “a high-level power struggle” during which the company’s chairman attempted to unseat the company’s CEO, the Globe and Mail reported last Friday.
Staffieri’s abrupt departure from Rogers was announced by the company on Sept. 29. No explanation was given at the time.
The Globe and Mail has since reported unidentified sources said Staffieri had developed a close relationship with Rogers chairman Edward Rogers, had ambitions to be CEO and “frequently butted heads” with Joe Natale, the company’s current CEO.
Natale intended to look for a new CFO after last years’ Christmas break, however “events surrounding the company’s proposed acquisition of Shaw, which was announced in March, overtook his plans,” the Globe report reads. “Meanwhile, Edward Rogers was attempting to remove Mr. Natale from the top job and make Mr. Staffieri CEO, according to three sources familiar with the matter.”
UPDATE: According to a Bloomberg report late Wednesday, Mr. Rogers’ plan went much further than removing Natale as CEO, saying the company chairman wanted to remove as many as nine senior company executives. However, he did not have the support of the board of directors, who voted against his plan. Mr. Rogers’s sisters and his mother, all of whom sit on the board as well as on the family trust which controls the company through its ownership of the majority of voting shares, were all against him too, according to Bloomberg.
The sources told the Globe there was an emergency board meeting on Sept. 26 and that “Melinda Rogers-Hixon, deputy chair of the family-controlled company and Mr. Rogers’s sister, strongly opposed Mr. Rogers’s plan, and the overwhelming majority of the board and the family backed Mr. Natale and his management team.”
The company’s board of directors is set to “meet next week to discuss chair Edward Rogers’s future interactions with the company’s management,” another Globe report states, in advance of the company’s third quarter results, which are to be announced October 21. The Bloomberg report says the board may consider measures to limit Mr. Rogers authority in the company his father Ted founded and grew.
“Frustration among directors and family members is understandable,” wrote BMO Capital Markets media and telecom analyst Tim Casey in a note to investors.
“Minority shareholders share similar concerns regarding the performance of the wireless business under Mr. Natale (since 2017) and Staffieri’s (since 2012) tenure. Although there are some differences in how the three incumbent wireless companies report their operating metrics, it is not debatable that Rogers key loading and revenue statistics compare unfavourably to Bell and Telus.”
The note goes on to talk about the timing and nature of Staffieri’s departure, which Casey said, “is obviously a concern,” especially with the merger of Shaw and Rogers, widley seen as a coup for Natale and something the Rogers family had desired for years, still before regulators.
“Meaningful discussions are almost certainly taking place with lending groups and rating agencies. We think the optics of the Chairman of the Board moving against a sitting CEO (and one that he recruited in 2017) while on the verge of a generational transaction is a more meaningful and longer-term concern. While Mr. Natale apparently has the confidence of the “majority of the board”, his tenure as CEO is a legitimate concern.”
Casey does not see this impacting the deal between Rogers and Shaw.
“We do not believe this disclosure changes the likelihood of the Shaw transaction, which we still believe will close in Q2/22 with significant wireless divestitures,” his note to investors said.
“However, the information most certainly complicates the integration process and increases an element of risk regarding the long-term management of the company. We are lowering our one-year target price from $72 to $68 to reflect an elevated risk premium.”