Rogers Communications Inc. is setting up a three-person committee to manage interactions between the company’s CEO and the chair of the board after a messy battle behind the scenes for control of the company.
The move comes amid an apparent rift between Edward Rogers, board chair and son of company founder Ted, and CEO Joe Natale, who was a longtime executive and CEO at Telus before Rogers tapped him to head up the company in 2017.
As first reported by the Globe and Mail newspaper, Edward Rogers has been trying to oust Natale as CEO and replace him with chief financial officer Tony Staffieri.
At a recent board meeting, that move was blocked by Edward’s sister, Melinda Rogers-Hixon, who worked with other board and family members to defend Natale, the media reports said.
Staffieri abruptly left the company on September 29, and no explanation has been given for his departure.
On Thursday, the company announced the formation of the new committee to manage interactions between the CEO of the company and the chair of the board who bears the founder’s name.
In its management discussion and analysis released with its quarterly results on Thursday, the telecommunications company says it is establishing a new executive oversight committee to “assist the chair of the board and the president and chief executive officer in discharging their respective duties, and to establish clear protocols for interactions between the chair and members of management.”
None of the parties have said much publicly about the rift, but it is clear that there is dissension behind the scenes. In one of his few public statements on the matter, Edward Rogers made it clear he thinks there is “room for improvement” in the company’s performance.
“In my role as Chair of the Rogers Control Trust, the controlling shareholder of the company, it is my responsibility to put the interests of [the company] first,” he said in a statement on Tuesday.
“It’s disappointing the focus of others has strayed from what is best for the business.”
The drama is the second time the Rogers family has been embroiled in a public controversy in recent months, as the family was photographed hobnobbing with former U.S. president Donald Trump at his Florida resort in May.
On a conference call with analysts to discuss the company’s quarterly results on Thursday, Natale said he has the “unequivocal” support of the company’s board of directors.
Natale is the third person to hold the CEO title at Rogers since the death of patriarch Ted in 2008. Nadir Mohammed ran the company until 2013, followed by Guy Laurence, who helmed the company until Natale took over.
The attempted palace coup comes as the company is trying to get a proposed $26 billion merger of rival Shaw approved, a pact that would significantly increase Rogers’ already impressed size in Canada’s telecom market.
Rogers earnings on Thursday show the company added 175,000 postpaid wireless customers last quarter. Revenue was flat at $.36 billion however, and profit declined to $490 million from $512 million for the same period last year.
The investment community is watching the drama play out with interest. When Staffieri left, Vince Valentini, a stock analyst with TD, said that his departure was likely due to a desire by the CEO to bring in his own people, since Staffieri held the top finance job before he became CEO.
“Our suspicion and belief is that it became clear that he would not retain the CFO role if/when Rogers becomes a bigger company in the future, so he decided to move on right away,” Valentini said at the time.
In a note to clients on Thursday, he called the situation “messy.”
In a note from Oct. 12, the day after the Globe and Mail newspaper first reported on the rift, analysts at BMO Capital Markets lowered their price target on Rogers’ stock by $4 to $68.
“The awkward and abrupt departure of CFO, Tony Staffieri, on September 29 apparently reflects disagreements within the Rogers family regarding senior leadership of the company.”