Succession-style drama at Rogers? Turmoil at telco after heir Edward tries and fails to oust CEO

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 (new window).

As first reported by the Globe and Mail newspaper (new window), 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, according to media reports.

Staffieri abruptly left the company on Sept. 29, and no explanation has been given for his departure.

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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.

Public power struggles rare

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.

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It's disappointing the focus of others has strayed from what is best for the business.

Associate professor Richard Powers with the Rotman School of Management in Toronto says corporate power struggles behind the scenes are not unheard of, but having one play out in public at a company the size of Rogers is. 

The fact that we're seeing it is both fascinating and just shows that ... family dynamics are difficult ... when there's billions of dollars at risk, he said in an interview with CBC News.

"This is Canada's Succession right now," he went on, referring to the popular HBO show that details cutthroat battles between family members to take control of a fictional billion-dollar company (new window). The fact that it's playing out in the media makes it all that more intriguing, and ... something is going to happen and it's going to happen quickly.

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 (new window) 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 (new window), followed by Guy Laurence, who helmed the company until Natale took over (new window).

Shaw deal 

The attempted palace coup comes as the company is trying to get a proposed $26 billion merger of rival Shaw approved (new window), a pact that would significantly increase Rogers' already impressive size in Canada's telecom market.

Powers says this battle is all the more amazing considering how important the Shaw deal is to the company's future.

The timing for something like this could not be worse, he said. You really have to question Edward Rogers' motives in bringing this up at such a sensitive time, at such a pivotal time in the company's history. Why would you engage in a boardroom battle at this time?

Powers says now that a fight has been started, Rogers faces an uphill battle to win it.

The CEO [and] chair relationship is so important, they have to be best friends. That clearly is not the case today. And when that relationship sours, typically it's the CEO that leaves [but] I think it might be Edward that gets shuffled to the sideline.

Rogers shares have lagged behind those of rivals Telus and Bell for years. According to Bloomberg data, not including dividends, Rogers shares are today worth about 74 per cent more than they were when Ted died in 2008. Telus shares, meanwhile, are up by 193 per cent over that time period, while Bell shares are up by 173 per cent.

Rogers earnings on Thursday show the company's quarterly revenue was flat at $3.6 billion , while its 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.

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Pete Evans (new window) · CBC News · with files from the CBC's Meegan Read