Independent directors at Rogers Communications Inc. are pushing back against attempts by chair Edward Rogers to overhaul the telecom and media giant’s leadership, and the company’s family trust will hold an emergency meeting to consider limiting Mr. Rogers’s ability to exercise voting control.
The boardroom rift in the middle of the $26-billion takeover of Shaw Communications Inc. erupted after Mr. Rogers attempted to replace Rogers chief executive officer Joe Natale with chief financial officer Tony Staffieri and oust other members of the company’s leadership team. It pits Mr. Rogers against his mother, Loretta Rogers, and sisters Martha Rogers and deputy chair Melinda Rogers-Hixon. The majority of the Rogers family and the company’s board opposed Mr. Rogers’s plan, and Mr. Staffieri left the company.
Several independent Rogers board members, including lead director John MacDonald, presented their case to curtail the chair’s powers at a meeting of Rogers family members and advisers late Tuesday, according a source close to the board. The Globe and Mail is not identifying the person because they are not authorized to speak publicly about it.
An emergency meeting of the family trust that has voting control over Rogers has been called for Thursday morning, after Tuesday’s meeting to discuss the conflict over Rogers leadership ended in an impasse, the source said. Members of the advisory committee that oversees the Rogers Control Trust are planning to discuss whether to impose any conditions on Mr. Rogers’s ability to vote the proxies associated with the Class A voting shares that are owned by the trust, the source said.
Mr. Rogers is scheduled to address the group on the possibility of resolving the impasse through negotiations, according to the source. Rogers Communications is also slated to release its third-quarter results on Thursday morning.
Mr. Rogers did not respond to a request for comment. Andrew Garas, a spokesperson for Rogers, declined to comment.
The Rogers family controls the telecom company, founded by the late Ted Rogers, through a dual share structure. The family holds 97.5 per cent of the company’s class A voting shares mostly through the Rogers Control Trust, while most investors own class B non-voting Rogers stock.
Edward Rogers is chair of the trust, in addition to being chair of the company’s board, and is responsible for liaising with other family members and voting the proxies on the election of company directors, among other duties. As vice-chair of the trust, Ms. Rogers-Hixon assists him in that role.
The Globe reported on Monday that Mr. Rogers made a formal request for a list of the company’s shareholders and has had discussions with potential candidates to replace board members. Such a request for a list of shareholders typically precedes an attempt to make changes to a company’s board of directors. The shareholder list has been provided to Mr. Rogers, according to two sources.
Loretta Rogers, Ted Rogers’s 82-year-old widow and a member of the advisory committee and the company’s board, said last week that she supports Mr. Natale.
Ms. Rogers said in an e-mailed statement that her role is to represent Ted’s wishes and build on his legacy. She added that she is very confident about the future of Rogers under Mr. Natale and his leadership team.
Earlier this week, Mr. Rogers said in a statement that his primary focus is on the company’s long-term performance. “On this point, industry stalwarts, controlling and minority shareholders, employees, analysts and market observers agree: there is room for improvement,” Mr. Rogers said. “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 Rogers Communications first. It’s disappointing the focus of others has strayed from what is best for the business,” he added.
The Rogers trust’s 10-person advisory committee is made up of six Rogers family members and four long-time executives and family friends, including Toronto Mayor John Tory, who two sources said chaired Tuesday’s meeting. Decisions of the committee generally require approval by two-thirds of its members.
When asked whether it is appropriate, and the best use of time, for the mayor to chair a meeting that could decide the future of the country’s largest wireless carrier, Mr. Tory said he attended the three-hour meeting after putting in a 12-hour workday.
“If I had a hobby, if I had some other kind of activity that I did, frankly, if I’d wanted to spend time with my family, I don’t think after a 12-hour day anybody would deny me that opportunity. I choose to carry out a serious fiduciary obligation that I promised the late [Ted] Rogers that I would do, to try and help his family and his company,” Mr. Tory said, noting that if a city matter had come up during that time that required his attention, he would have prioritized it.
“I don’t think there are too many people that call into question my devotion to my job,” he added.
Mr. Tory declined to comment on whether he supports Edward Rogers’s push to oust Mr. Natale and other Rogers executives, saying, “these are private matters.”
With a report from Oliver Moore
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