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What does the corporate drama mean for one of Canada’s biggest telecom companies and the family – Loretta Rogers, Edward Rogers, Martha Rogers and Melinda Rogers-Hixon – that runs it? Here’s what you need to know

The Rogers headquarters, in Toronto, on Oct. 22.Cole Burston/Getty Images


Overview

The first sign of fighting at the highest levels of power at Rogers Communications Inc. appeared in late September. That’s when it was announced that chief financial officer Tony Staffieri was leaving. Soon afterward, The Globe reported that his departure was connected to an attempt he made to oust Rogers chief executive officer Joe Natale with the help of chair of the board, Edward Rogers.

In the weeks since, there has been a lot of fallout as the rift in the company – and within the Rogers family itself – has deepened.

What does the corporate drama mean for one of Canada’s biggest telecoms and the family that runs it? Here’s what you need to know.



The butt-dial

Rogers Communications CEO Joe Natale speaks to shareholders during the Rogers annual general meeting, in Toronto, on April 20, 2018.Nathan Denette/The Canadian Press

An inadvertent phone call exposed the plan that has plunged one of the country’s largest telecom and media empires into chaos and ignited the most spectacular boardroom and family dramas in Canadian corporate history.

On Sept. 17, Rogers CEO Joe Natale accidentally overheard CFO Tony Staffieri discussing plans to unseat Mr. Natale and other executives with the support of company chair Edward Rogers. Alexandra Posadzki reports:

On a Friday in mid-September, Joe Natale had cellphones on his mind. He was preoccupied with one phone call in particular, an accidental one he was never meant to be on. On the other end of the line was Tony Staffieri, the company’s long-time chief financial officer and a close C-suite colleague of Mr. Natale’s. Mr. Staffieri was speaking with David Miller, who until fairly recently, had been the chief legal officer at Rogers. The two men, who sounded like they were on a patio, were talking about how Mr. Staffieri was going to lead the company once Mr. Natale was out of the way. This was news to Mr. Natale, of course, who was in the midst of the most significant transaction in the company’s 60-year history, a $26-billion merger with Calgary-based Shaw Communications Inc.”

Tensions between Mr. Natale and Mr. Staffieri had been brewing for years, according to people familiar with the matter. Mr. Staffieri, who joined Rogers in 2012 and developed a close relationship with the company’s chairman, had ambitions to be chief executive officer, and frequently butted heads with Mr. Natale regarding strategic direction, sources say.

After learning of the plan, which included removing nine other senior executives, Mr. Natale informed an independent director, triggering an emergency weekend board meeting. The majority of the board and Rogers family backed Mr. Natale and his management team. Mr. Staffieri left the company three days later on Sept. 29 – and Mr. Natale still holds the top job.

The Globe and Mail reports on the news of the company’s power struggle:

In the weeks leading up to Mr. Staffieri’s departure, Mr. Natale had begun speaking with external candidates to line up a CFO to oversee the integration, according to the source. Meanwhile, Edward Rogers was attempting to remove Mr. Natale from the top job and make Mr. Staffieri CEO, according to three sources familiar with the matter. One of the sources said Mr. Rogers was also planning to remove other members of the executive team – some of whom are deeply loyal to Mr. Natale.

On November 16, The Globe and Mail reported that Joe Natale was removed as chief executive of Rogers by the company’s board led by chair Edward Rogers. The company’s former chief financial officer, Tony Staffieri, will be interim CEO – tasked with closing the $26-billion takeover of Shaw Communications and paying down the deal’s roughly $20-billion debt load.



The Rogers boardroom

Loretta Rogers, left, sits with Martha Rogers, centre left, and Edward Rogers during the announcement of a $130-million donation by the family to establish the Ted Rogers Centre for Heart Research in Toronto.Chris Young/The Globe and Mail

The attempted management shakeup triggered a boardroom rift that split the family, with Edward Rogers on one side, and his mother, Loretta Rogers, and sisters Martha Rogers and deputy chair Melinda Rogers-Hixon on the other.

During an emergency board meeting on Sept. 26, the majority of the company’s directors and the Rogers family backed Mr. Natale and his management team. Alexandra Posadzki and Andrew Willis report on the battle from inside the Rogers board room:

“While I’m deeply disappointed by the recent public airing of board discussions, I am very confident and excited about the future of Rogers under Joe Natale’s stewardship, and that of his leadership team… As Ted always said, the best is yet to come,” Loretta Rogers, the company’s longest-standing director and the widow of its late founder, Ted Rogers, said in a statement to The Globe.

On Oct. 20, the Rogers family and its closest advisers gathered in a meeting led by Toronto Mayor John Tory to discuss the power struggle. The meeting was held ahead of the release of the company’s third-quarter results. Several independent Rogers board members, including lead director John MacDonald, presented their case to curtail the chair’s powers.

Key decisions at Rogers, such as the composition of the board, are ultimately made by two entities – the family trust and an advisory committee. The Rogers Control Trust, and other family holding companies it controls, together own 97.5 per cent of the company’s voting class A shares, according to the company’s 2021 management information circular. (The Rogers family also owns about 10 per cent of the outstanding class B non-voting shares.)

As the trust’s chair, Edward Rogers is responsible for liaising with other family members and voting the proxies on the election of company directors, among other duties. The vice-chair of the trust, Ms. Rogers-Hixon, assists him in that role.

Overseeing the trust is an advisory committee comprising 10 people, six of them Rogers family members. Edward’s sisters Martha and Lisa Rogers, as well as Loretta’s nephew David Robinson, sit on the committee with Loretta, Edward and Melinda. The non-family members are Alan Horn, who served as the company’s chief financial officer and as interim CEO; Thomas Hull, a childhood friend of Ted’s and the founder of insurance brokerage The Hull Group; Mr. Tory, who ran Rogers’s cable operations under Ted; and Ted’s long-time adviser Phil Lind.

THE ADVISORY COMMITTEE TO

THE ROGERS CONTROL TRUST

Rogers family members

Non-family members of the committee

Loretta Rogers

Wife and confidant of Ted Rogers for more than four decades, grew up in the Bahamas and Bermuda and is an accomplished painter with a fine arts degree from the University of Miami. Her family financed Ted Rogers’s initial venture into radio and cable.

Melinda Rogers-Hixon

She earned an MBA and worked in a variety of executive roles, including running Rogers’s venture capital arm in Silicon Valley for seven years. She is deputy chair of the Rogers board and vice-chair of the family trust.

Martha Rogers

The youngest of the founder’s four children and earned a doctorate in naturopathic medicine. She has been a Rogers board member for 13 years.

Edward Rogers

The only son of Ted Rogers, worked for three years at U.S. cable giant Comcast prior to joining Rogers and eventually running the cable division for six years. He was chair of Rogers Communications' board of directors, but he was removed from that role yesterday. He is chair of the Rogers Control Trust.

Lisa Rogers

Oldest of Ted and Loretta Rogers’s four children and worked for the company’s first internet cable venture in the 1990s.

David Robinson

Loretta Rogers’s nephew, and worked at Rogers before becoming chief commercial officer at fintech company Clik2pay.

Thomas Hull

Founded insurance brokerage The Hull Group in 1954 and was one of Ted Rogers’s closest friends from childhood – the two attended Upper Canada College together.

Alan Horn

He was Rogers chief financial officer for a decade, under Ted Rogers, and remains a trusted family adviser. The former accountant became interim CEO in 2008, after Ted Rogers died, and again in 2016.

Philip Lind

He was Ted Rogers’s right hand man for four decades, running divisions of the company and taking part in every major decision. When the founder died in 2008, Mr. Lind joined Edward Rogers, Mr. Horn and Mr. Tory as pallbearers at the funeral.

John Tory

Mayor of Toronto, ran Rogers’s cable operations for eight years under Ted Rogers and was one of the company’s lawyers early in his career. Mr. Tory’s late father, a lawyer, was also a trusted family adviser.

THE GLOBE AND MAIL

THE ADVISORY COMMITTEE TO

THE ROGERS CONTROL TRUST

Rogers family members

Non-family members of the committee

Loretta Rogers

Wife and confidant of Ted Rogers for more than four decades, grew up in the Bahamas and Bermuda and is an accomplished painter with a fine arts degree from the University of Miami. Her family financed Ted Rogers’s initial venture into radio and cable.

Melinda Rogers-Hixon

She earned an MBA and worked in a variety of executive roles, including running Rogers’s venture capital arm in Silicon Valley for seven years. She is deputy chair of the Rogers board and vice-chair of the family trust.

Martha Rogers

The youngest of the founder’s four children and earned a doctorate in naturopathic medicine. She has been a Rogers board member for 13 years.

Edward Rogers

The only son of Ted Rogers, worked for three years at U.S. cable giant Comcast prior to joining Rogers and eventually running the cable division for six years. He was chair of Rogers Communications' board of directors, but he was removed from that role yesterday. He is chair of the Rogers Control Trust.

Lisa Rogers

Oldest of Ted and Loretta Rogers’s four children and worked for the company’s first internet cable venture in the 1990s.

David Robinson

Loretta Rogers’s nephew, and worked at Rogers before becoming chief commercial officer at fintech company Clik2pay.

Thomas Hull

Founded insurance brokerage The Hull Group in 1954 and was one of Ted Rogers’s closest friends from childhood – the two attended Upper Canada College together.

Alan Horn

He was Rogers chief financial officer for a decade, under Ted Rogers, and remains a trusted family adviser. The former accountant became interim CEO in 2008, after Ted Rogers died, and again in 2016.

Philip Lind

He was Ted Rogers’s right hand man for four decades, running divisions of the company and taking part in every major decision. When the founder died in 2008, Mr. Lind joined Edward Rogers, Mr. Horn and Mr. Tory as pallbearers at the funeral.

John Tory

Mayor of Toronto, ran Rogers’s cable operations for eight years under Ted Rogers and was one of the company’s lawyers early in his career. Mr. Tory’s late father, a lawyer, was also a trusted family adviser.

THE GLOBE AND MAIL

THE ADVISORY COMMITTEE TO THE ROGERS CONTROL TRUST

Rogers family members

Non-family members of the committee

Melinda Rogers-Hixon

Loretta Rogers

Edward Rogers

Wife and confidant of Ted Rogers for more than four decades, grew up in the Bahamas and Bermuda and is an accomplished painter with a fine arts degree from the University of Miami. Her family financed Ted Rogers’s initial venture into radio and cable.

The only son of Ted Rogers, worked for three years at U.S. cable giant Comcast prior to joining Rogers and eventually running the cable division for six years. He was chair of Rogers Communications' board of directors, but he was removed from that role yesterday. He is chair of the Rogers Control Trust.

She earned an MBA and worked in a variety of executive roles, including running Rogers’s venture capital arm in Silicon Valley for seven years. She is deputy chair of the Rogers board and vice-chair of the family trust.

Martha Rogers

David Robinson

Lisa Rogers

Oldest of Ted and Loretta Rogers’s four children and worked for the company’s first internet cable venture in the 1990s.

The youngest of the founder’s four children and earned a doctorate in naturopathic medicine. She has been a Rogers board member for 13 years.

Loretta Rogers’s nephew, and worked at Rogers before becoming chief commercial officer at fintech company Clik2pay.

John Tory

Alan Horn

Philip Lind

Phil Lind was Ted Rogers right hand man for four decades, running divisions of the company and taking part in every major decision. When the founder died in 2008, Mr. Lind joined Edward Rogers, Mr. Horn and Mr. Tory as pallbearers at the funeral.

He was Rogers chief financial officer for a decade, under Ted Rogers, and remains a trusted family adviser. The former accountant became interim CEO in 2008, after Ted Rogers died, and again in 2016.

Mayor of Toronto, ran Rogers’s cable operations for eight years under Ted Rogers and was one of the company’s lawyers early in his career. Mr. Tory’s late father, a lawyer, was also a trusted family adviser.

Thomas Hull

Founded insurance brokerage The Hull Group in 1954 and was one of Ted Rogers’s closest friends from childhood – the two attended Upper Canada College together.

THE GLOBE AND MAIL



The aftermath

Loretta Rogers, centre, leaves the TD Centre with Martha after a meeting at Torys LLP, in Toronto, on Oct. 21.Christopher Katsarov/The Globe and Mail

In a meeting on Oct. 21, the board voted to replace Edward Rogers as chair with John MacDonald.

Hours after the company’s board voted, Mr. Rogers announced his intention to replace five independent directors, including Mr. MacDonald, with his own slate of candidates, through a written resolution.

Mr. Rogers issued a news release announcing his plan to remove John Clappison, David Peterson, Bonnie Brooks, Ellis Jacob and Mr. MacDonald from the board. The press release said he would replace those directors, who opposed the attempted overhaul of the company’s management, with Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr.

In an opinion piece, Andrew Willis writes that Edward Rogers needs to learn that timing is everything and reflects on how his actions could have jeopardized the Shaw takeover:

As we all know, Rogers is on the cusp of an extraordinary achievement… If approved, the once-in-a-generation transaction will make Rogers the national platform that Ted Rogers always dreamed it would be. By pushing plans to replace Mr. Natale with former chief financial officer Tony Staffieri, Edward Rogers is putting the Shaw transaction at risk.

Less than a week later, Mr. Rogers was reappointed chair at a Sunday board meeting that was called invalid by three family members and the five company directors who Mr. Rogers says he replaced.



The $26-billion Shaw takeover

Shaw Communications Inc. says it remains committed to its deal to be bought by Rogers Communications Inc. as it reported its fourth-quarter profit rose more than 40 per cent compared with a year ago.Adrian Wyld/The Canadian Press

The power struggle comes at a crucial time for Canada’s largest wireless carrier, which is spending billions to build 5G wireless networks and has struck a deal to acquire Shaw Communications Inc. for $26-billion, including debt.

The company’s proposed acquisition of Shaw requires approval from three regulatory bodies – the Competition Bureau, the Canadian Radio-television and Telecommunications Commission (CRTC) and the Ministry of Innovation, Science and Economic Development. The deal is expected to face intense regulatory scrutiny, as it would eliminate the fourth-largest wireless carrier.

The deal, which Rogers expects to close in the first half of 2022, comes after a failed bid for Cogeco Inc. and Cogeco Communications Inc. last year. In September, 2020, Rogers paired up with Altice USA Inc. to launch a hostile takeover bid for the Quebec cable companies that was repeatedly rebuffed by their controlling shareholder, the Audet family, despite being sweetened to $11.1-billion.

Shaw Communications says it remains committed to the takeover and that the boardroom rift at Rogers is a “family and board matter.”

“On behalf of my family, the Shaw Board of Directors, and our management team, I want to reiterate our continued commitment to work with Rogers Communications Inc. to close the transaction that was announced on March 15, 2021,” said chief executive Brad Shaw in a statement provided to The Globe and Mail.

The five-day CRTC hearing kicked off on Nov. 22 in Gatineau, Quebec. Edward Rogers and Brad Shaw told Canada’s telecom regulator that the takeover will give the combined telecoms the scale they need to compete effectively against global streaming giants such as Netflix, Amazon Prime and Disney+, which pose a threat the Canadian broadcasting system, and to deliver 5G wireless services.

Meanwhile, rival Telus Corp. told the CRTC that the takeover would “greatly reduce” competition and choice for consumers of broadcasting services.

Edward Rogers, right, chairman of the board of directors of Rogers Communications, and Brad Shaw, CEO of Shaw Communications, appear before the CRTC hearing Nov. 22, 2021 in Gatineau.Fred Chartrand/The Canadian Press



The B.C. Supreme Court case

A B.C. Supreme Court judge has ruled that Edward Rogers can replace five of the independent directors of Rogers Communications Inc. without holding a shareholder meeting, meaning Mr. Rogers is once again chair of the telecom and media giant’s board of directors.

The two sides squared off in court over who sits on the company’s board, after Mr. Rogers’s move to replace the five independent directors who had opposed him was declared invalid by the company.

Lawyers for Edward Rogers were at loggerheads with Rogers Communications Inc. over the legality of replacing independent directors without holding a shareholder meeting. Mr. Rogers said the law in British Columbia, where Rogers is incorporated, allowed this change to be made through a written resolution – an assertion the other directors challenge.

Lawyers for Rogers Communications argued that making the kind of changes Mr. Rogers proposes required a shareholder meeting – even though the class B shares held by minority shareholders don’t come with voting power.

The case drew hundreds of pages of court filings containing conflicting versions of events leading up to the boardroom brawl, opposing views on the leadership of Mr. Natale and varying interpretations of the wishes of the company’s late founder, Ted Rogers.

On Nov. 7, Rogers Communications said it won’t appeal the ruling. The announcement means the decision by B.C. Supreme Court Justice Shelley Fitzpatrick will go unchallenged, ending weeks of uncertainty over control of the telecom and media giant.


More reading:


Compiled by Abigale Subdhan

Based on reporting from Alexandra Posadzki, Andrew Willis, Susan Krashinsky Robertson, Brent Jang and David Berman


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