Rogers Drops as Family Feud Erupts Again, Staffieri Named CEO
Rogers Pushes Out CEO Natale, Replaces Him With Ex-CFO Staffieri
(Bloomberg) -- Rogers Communications Inc. named Tony Staffieri as its interim chief executive officer, giving Chairman Edward Rogers the leadership change he’s craved but setting off a new round of fighting with his mother and sisters.
The Canadian wireless and cable company announced the decision to replace Joe Natale in a statement Tuesday night, adding that the board has begun a search for a permanent CEO and Staffieri is a candidate.
The move -- coming just 11 days after Edward Rogers won a court battle for control of the board following weeks-long bickering within the Rogers family -- was immediately denounced by his siblings and the matriarch, who said Natale should have stayed.
Rogers shares fell 1.6% to C$59.50 as of 9:35 a.m. in Toronto, the biggest intraday drop since Nov. 5.
It’s unusual for a company to bring in a new CEO while it’s in the middle of trying to close the biggest takeover in its history -- never mind one who was fired by that same company less than two months ago, as Staffieri was.
Rogers struck a deal in March to buy rival Shaw Communications Inc. for $16 billion. If approved by regulators next year, the transaction is set to further expand the reach of Toronto-based Rogers, which already has more than 11 million wireless customers -- about 30% of Canada’s population -- and has extensive holdings in cable television, radio and sports.
“While Joe is moving on, we have an experienced interim CEO and leadership team who will continue to focus on the business, return to stability, and closing our transformational merger with Shaw,” Edward Rogers said in a statement.
Edward’s mother, Loretta Rogers, and two of his sisters, Melinda Rogers-Hixon and Martha Rogers, all said they voted against the CEO change.
“We are very disappointed that Edward has driven the termination of Joe Natale as RCI’s CEO,” the three family members said in an emailed statement. “This is simply another instance in which Edward has placed his desire for unchecked control over RCI ahead of basic good governance and responsible corporate stewardship.”
Further Upheaval
The move likely means further upheaval in the executive ranks at Canada’s largest wireless provider. Some of Natale’s 11-person senior executive team are expected to follow him out the door: Dave Fuller, the head of the wireless division, has already said in court filings that he doesn’t wish to work for a CEO other than Natale.
The company was started in 1960 by Ted Rogers, who arranged his affairs so that control would pass to his family when he died. But his four children have fought, privately and publicly, and it’s been a revolving door at the top. Staffieri will be the company’s fifth CEO since the founder passed away in 2008.
“We now wait to see if Tony Staffieri turns his interim status into a more permanent role as the next CEO of Rogers or whether a completely new regime will be called upon to preside over the company’s next critical chapter,” National Bank Financial analyst Adam Shine said in a note.
Rogers brought in Natale, a longtime executive at rival Telus Corp., in 2017 to improve service and help close the gap in wireless customer retention, where Rogers has long been a worse performer than Telus.
But growth in wireless service revenue has been weak and Covid-19 travel curbs hurt the company’s large roaming business. Its media division is barely profitable and carries the weight of an expensive rights contract with the National Hockey League -- signed long before Natale’s arrival.
Edward Rogers made an attempt to replace Natale with Staffieri in mid-September. But Staffieri prematurely revealed the plot to Natale when he accidentally picked up a phone call from the CEO. For 21 minutes, Natale listened quietly as Staffieri spoke with a former colleague about a plan to shuffle most of the company’s top managers, according to court documents.
Edward Rogers then took his plan to the board but hit a wall of opposition from his mother, sisters and five independent board members, who voted instead to fire Staffieri on Sept. 29.
That escalated a bitter family power struggle that spilled into public view. Edward Rogers took the company to the Supreme Court of British Columbia, arguing he had the power to fire and replace the five independent directors who had foiled his wishes.
Briefly, the board stripped him of the chairman’s title. But Edward still holds authority as chairman of a family trust that owns about 97% of the voting shares of Rogers Communications. When the court ruled on Nov. 5 that he has the right to use those votes to unilaterally replace directors, Natale’s days seemed numbered -- though at first the board expressed its support for him.
Rogers director Robert Gemmell said in a statement late Tuesday that the board tried to figure out a way for Natale to stay through the closing of the Shaw deal but a “mutually agreeable arrangement could not be reached.”
Staffieri has an advantage in the race to become permanent CEO, said Richard Leblanc, a professor at Canada’s York University who studies and teaches corporate governance.
“The issue here is that the Rogers board is dysfunctional and family members continue to be at each other’s throats,” LeBlanc said on BNN Bloomberg Television. “That will no doubt affect the talent pipeline of external candidates that are willing to come forward because a dysfunctional board is kryptonite to a prospective external CEO.”
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