Civil war is raging inside the boardroom of one of Canada’s largest companies.
The turmoil within Rogers Communications Inc., founded by the late Ted Rogers, spilled into the public last week as Rogers’ only son, Edward, sought control of the company after being ousted as chair of the board by his mother and sisters.
Now, two factions within the company’s senior ranks are fighting for dominance over the company’s future. Here’s what it means for the company and the characters involved.
What started this rift?
The conflict at Rogers erupted in September after Edward attempted to oust Joe Natale, president and CEO of the company, and replace him with former chief financial officer Tony Staffieri.
Edward is the chair of the Rogers Control Trust, which is the family trust that controls the company, and was previously the chair of Rogers’ board of directors.
Natale and the board learned of Edward’s plan to oust Natale and other executives when Staffieri accidentally dialed the CEO’s phone number while discussing it. The board voted to keep Natale as CEO after these revelations, prompting Staffieri to leave the company several days later.
Last week, the board of directors voted to remove Edward from his position as chair. Three of the votes cast against Edward came from his mother, Loretta, and his sisters, Melinda and Martha.
What’s happening now?
The dispute has culminated in a stalemate over who sits on the board.
Hours after the company’s board voted to remove him as chair, Edward — still at the helm of the family trust, which controls the majority of the company’s Class A shares — announced that he would replace five independent directors, including newly elected board chair John MacDonald, with his own candidates.
On Sunday, Edward’s version of the board convened to oust directors John Clappison, Bonnie Brooks, David Peterson (who is also vice-chair of Torstar, publisher of the Toronto Star), Ellis Jacob and MacDonald. Edward said he would replace those directors with Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr.
Rogers’ board of directors has deemed these decisions invalid, arguing that Edward has no legal basis for changing the makeup of the board when the board has already stripped him of his position and when Edward has not convened a shareholders meeting.
Shortly after Edward announced his plan to take back the company, Martha Rogers — his younger sister — released a string of tweets calling for her brother to step down as chair of the family trust.
She threatened to “spend every penny” defending the company and to release information about Edward. “Know I won’t bring anything up without full receipts, I got them from the last 20+ years — who’s vulnerable now?” she wrote.
So who actually controls Rogers?
This will likely be left to the courts to decide.
While the board voted to oust Edward from his position as chair, he still controls the family trust, which holds 97.5 per cent of Class A voting shares. This means Edward could use the majority voting block to oust directors during a shareholders meeting.
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The company and Edward’s other sister, Melinda Rogers-Hixon, have both released statements challenging the legality of replacing the directors without convening a shareholders meeting.
For the moment, Rogers’ board is operating as the company’s rightful governance body.
But that could change. Edward says he plans to initiate proceedings at the supreme court in British Columbia, where Rogers is incorporated, to “confirm and implement” his board’s legitimacy.
Who’s on what side?
The Shakespearean drama between family members has split the Rogers clan and their respective allies into two warring factions.
Edward Rogers, accompanied by those he wants to appoint to the company board, is feuding with his mother, Loretta, and sisters Melinda and Martha.
Loretta and her daughters are backed by Natale and the board members Edward tried to oust. According to the Globe and Mail, Toronto Mayor John Tory also supported a motion to restrict Edwards’ ability to exercise voting control over the company.
Edward is supported by his own team of directors, whom he appointed to his version of the board on Sunday.
Martha Rogers, in one of her tweets, referenced members of the advisory committee to the Rogers’ family trust — Alan Horn, Philip Lind, David Robinson, Toby Hull and Mayor Tory — as part of Edward’s “old boys club Trump cabal.”
Wait, our mayor is involved in this?
Yes. Mayor Tory has a long and storied relationship with Rogers. Tory ran Rogers’ cable operations for eight years under Ted Rogers, and worked as one of the company’s top lawyers before entering politics.
Mayor Tory’s late father, John A. Tory, was a close friend of Ted Rogers and served on the board of directors until 1979.
The mayor now holds a position on the advisory committee to the Rogers’ family trust.
What does this mean for the company?
The feud comes at an especially delicate time for Rogers as it navigates a $26-billion takeover of Shaw Communications Inc., the telecommunications company it moved to acquire in March.
On Monday, following a weekend of wanton chaos within the senior ranks, Rogers shares tumbled by as much as six per cent.
Securities analysts at Canada’s largest banks have downgraded the stock, though some say the company’s volatility may be temporary.
Jacob Lorinc is a Toronto-based reporter covering business for the Star. Reach him via email: [email protected]
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