Edward Rogers voted out as chair of Rogers Communications following heated boardroom battle

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Rogers Communications Inc.’s board of directors voted Thursday to remove Edward Rogers from the presidency after a boardroom battle over the company’s leadership.

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Rogers said John A. Macdonald, who has been an independent director since 2012, will take on the role of interim chairman, while Edward, the son of company founder Ted Rogers, remains on the board.

Earlier in the day, CEO Joe Natale said he received “strong and clear support” from the board of directors as the telecommunications and media company announced plans to examine its corporate governance practices.

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His remarks came after a heated boardroom fight at the family-controlled company spread to the public and pitted Edward against his sisters and mother.

Edward Rogers reportedly tried to replace Natale with the company’s now-former chief financial officer, Tony Staffieri, but faced opposition from other board directors, including other members of the Rogers family. Since then he has publicly criticized the company’s performance, saying it could do better.

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According to a source with knowledge of the events, Natale first became aware of plans to remove her as CEO when Stafieri inadvertently butt-dialed her while discussing the matter. The Globe and Mail first reported that development on Thursday. (Rogers spokesman Andrew Garras declined to comment.)

Rogers’ board of directors met on Wednesday, and Natale said Thursday morning that she “feels supported” by the board and that the meeting included “very strong, collaborative and thoughtful discussions with all board members.”

He said that he does not expect the controversy to lead to Shaw Communications Inc. in a deal worth $20 billion ($26 billion including debt), which still requires regulatory and government approval.

“I feel as comfortable with the Shaw transaction as I have in the past, in terms of our ability to approve it and the synergy that stands behind it,” Natale said. to bring.

Like many legacy companies in Canada that remain in the hands of the founding families, the Rogers family controls the business through a trust that holds more than 97 percent of the voting shares, while the majority of the investors hold non-voting stock. it happens.

It is now run by a team of professional managers led by Natale, but the family remains an outside influence on the company.

Glen Rowe, Professor of General Management and Strategy, said, “It’s a good stock structure, as long as everyone in the family gets along and what they’re doing in the family is good for the shareholders who are not part of the voting bloc. ” Western University’s Ivey Business School. “But it can get really bad when shareholders get into disputes and then argue that no one is going to win.”

“At least they’re admitting there’s a problem and they’re trying to do something about it,” Rowe said, referring to the company’s plans for corporate governance and a new board committee review.

Rogers said Thursday that its profit or net income for the three months ended September 30 was $490 million, down 4 percent from $512 million in the same quarter last year. Overall revenue was flat at $3.67 billion.

Profit was 94 cents per diluted share, up from $1.01 per diluted share a year earlier. On an adjusted basis, Rogers said it earned $1.03 per diluted share, down from an adjusted profit of $1.08 per diluted share this time last year. Analysts had expected an average adjusted profit of $1.02 per share, according to financial market data firm Refinitiv.

The company said profits were dragged down primarily by its sports-broadcast-heavy media business, where revenue declined compared to last year, when the NHL and NBA made changes to schedules related to the pandemic in the third quarter. Due to which he completed his season. Those seasons traditionally end in the second quarter.

Game-day revenue for the Toronto Blue Jays increased as COVID-19 restrictions were eased and fans were allowed to attend games at the Rogers Center.

In the telecommunications sector, Rogers added 175,000 new wireless customers on contracts, the most in 13 years, fueled by the reopening of many parts of the economy across Canada.

A TD Securities Inc. client note called the results positive, saying that growth in new wireless customers and low churn was a “huge beat”.

With a report from the Canadian Press

CD
Christine Dobie is a Toronto-based business reporter for Star. Follow him on Twitter: @christinedobby
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