There is more management change under way at Telus Corp., with chief financial officer John Gossling set to depart by the end of the month and make room on the executive team for another veteran of the company.
The Vancouver-based telecommunications provider said Monday that Doug French, a 20-year Telus employee who has worked in a number of senior roles over the years – most recently as corporate controller – is taking over as CFO immediately.
Mr. Gossling is "leaving Telus to seek other opportunities," the company said. Josh Blair, chief corporate officer, declined to elaborate on that statement "out of respect for John's personal decision."
But in an interview on Monday, Mr. Blair said Mr. French's appointment was a long time in the making. Mr. Blair said Telus has been "effectively grooming him [to take on the CFO role] for pretty much a decade now."
"If you look at all of [CEO] Darren [Entwistle's] direct reports now, they have been with the company for a good period of time before they've become executives," he said. "With Doug having 20 years of strong experience with us, 30 years in total, he's definitely one of the most experienced CFOs in telecom."
Telus has made its focus on customer service a key part of its business strategy for close to a decade, and its "customers first" mantra permeates its corporate culture.
Analysts said Monday they expect Mr. French will draw on that lengthy experience with the company and bring a consistent approach to the new role.
Barclays Capital Markets analyst Phillip Huang noted that in the absence of more information on why Mr. Gossling is leaving now, investors could "initially react with speculation," but said Mr. French's background with Telus should "help mitigate any concerns regarding transition."
Canaccord Genuity's Aravinda Galappatthige also highlighted Mr. French's extensive experience but cautioned, "While it appears that the decision to leave was Gossling's, this may still cause some investor unease as this is the second major change in Telus management in recent months."
Mr. Gossling's departure as CFO follows the return of Mr. Entwistle to the role of chief executive officer in August after Joe Natale spent just over a year in that job. The CEO shuffle saw Telus pay the two men a total of $24.1-million in 2015, including a $6.2-million "transition payment" to Mr. Natale and a "contract renegotiation grant" to Mr. Entwistle.
Telus said the reason for that change was because Mr. Natale was reluctant to relocate from Toronto to the company's Vancouver headquarters or another city in Western Canada. Mr. Gossling, who has previously held senior roles at Rogers Communications Inc. and was CFO at CTVglobemedia, moved to Victoria from Toronto last fall, after about three years with Telus.
Mr. Blair said there would be no major strategic changes under the new CFO and that there was "absolutely not" any internal disagreement over the company's approach to capital allocation that prompted Mr. Gossling's departure.
The company's debt leverage has increased as it is intent on returning capital to shareholders – less than two weeks ago, it announced plans to target dividend growth of 7 to 10 per cent from 2017 to 2019 and up to $250-million in annual share buybacks over the next three years – but has still been making costly investments in spectrum licences and infrastructure upgrades, including building out fibre broadband directly to customers' homes.
Mr. Blair said the new CFO has worked closely with the executive team over the years to cut costs across many business areas but still find ways to make the type of substantial investments required to keep up with changing technology and customer demands. "Those two things are really what the CFO of the future at Telus needs to be and Doug has them both in spades," he said.
Mr. Entwistle echoed that sentiment in an e-mail he sent Monday to several investors regarding the CFO change.
"Importantly, Doug has worked with me closely over the years to effectively drive substantive cost efficiency programs across all areas of the company whilst ensuring the Telus team maintains the appropriate governance and discipline with respect to our generational capex investments that are designed to deliver long-term economic growth for investors," he said.
Mr. Entwistle also thanked the outgoing CFO for his contributions, noting that he and the board of directors, "wish [Mr. Gossling] the very best."
For his part, Mr. Gossling said in a statement, "I am confident in Doug's ability to support Telus' continued financial strength as CFO, including sustaining the company's strong balance sheet, and congratulate him on this well-earned appointment."