The chair of the family trust that controls Rogers Communications Inc. (TSX: RCI.B) invoked the name of his late father – company founder Ted Rogers – in his fight to retain control of the company’s board of directors, court documents show.
According to an affidavit filed by Edward Rogers today in B.C. Supreme Court, the late Ted Rogers structured the company in a specific manner so that “one key decision maker” would be able to make decisive changes - including to Rogers Communications’ board.
That power to make change, said Edward Rogers in his affidavit, is exactly what he is using to dismiss five Rogers Communications directors – a legal avenue for him to do so for a company that is incorporated in B.C. under the province’s Business Corporations Act.
“Before his death, my father frequently told me he believed in the importance of consultation and discussion, but emphasized the need to have one final decision maker,” Edward Rogers’ affidavit read. “This is reflected in the Control Trust structure he created.
“The Trust has an Advisory Committee that meets periodically to... provide advice and guidance to the Control Trust Chair,” he added. “However, the Chair has the ultimate authority to act on behalf of the Trust.”
That is at the crux of Edward Rogers’ petition, in which the trust’s chair is seeking the court to enforce his dismissal of five Rogers Communication company board members – John Clappison, David Peterson, Bonnie Brooks, Ellis Jacob and John A. MacDonald – following their move to oust Edward Rogers from the position of chair at that same board last week.
The ouster kicked off a series of countermoves, where Edward Rogers announced over the weekend the naming of five new directors to Rogers Communications’ board – Michael Cooper, Jack Cockwell, Jan Innes, Ivan Fecan and John Kerr – and the dismissal of the five directors who have challenged Edward Rogers’ attempt to remove Joe Natale from the company’s CEO post.
The new board then held a meeting on Sunday that, according to Edward Rogers, reappointed him as chair of Rogers Communications’ board.
Rogers Communications’ board, however, has resisted to Edward Rogers’ moves. As of Tuesday end-of-day, the five directors Edward Rogers ordered to be removed from the company’s board remain listed on the Rogers Communications website – while the profiles of the new members are nowhere to be found.
The company’s board members list on its website also did not include any of the five newly named directors, and several board members – including Edward Rogers’ mother, Loretta Rogers, and two sisters (Melinda Rogers-Hixon and Martha Rogers) – are openly dismissing Edward Rogers’ authority to remove Rogers Communication board members.
Martha Rogers has been the most vocal, calling out her brother on social media as conducting a “coup.”
“Enjoy your pretend ‘board meeting,’ Ed,” tweeted Martha Rogers ahead of the Sunday meeting that supposedly reappointed Edward Rogers as the company’s board chair. “Here’s your problem: It’s not legal, so I’m going to fight like hell for the 24,000 employees, 10M+ customers & sports fans.”
The massive rift at the top of the company’s controlling family stems from Edward Rogers’ wish to part ways with current Rogers president and CEO Natale, a wish that – according to Edward Rogers’ affidavit – was enforced by Rogers Communications’ March announcement it is acquiring Shaw Communications Inc. for $26 billion.
Although Edward Rogers said he had concerns over Natale’s performance as CEO over the last two years (with complaints about lagging behind Bell Canada and Telus, as well as missing budgets and causing stock prices to drop), the trust chair noted it was the deal with Shaw that drove him to decide on Natale’s removal.
“After careful consideration over this past summer, I had formed the view by September that Mr. Natale’s performance was not going to improve, and I had serious concerns about his ability to lead [Rogers Communications] following the company’s integration of Shaw Communications in the spring of 2022,” Edward Rogers said in his affidavit. “The Shaw deal is the largest single transaction in [the company’s] history... The transaction is critical to [Rogers Communications’] future.”
In the affidavit, Edward Rogers said that he has talked to Rogers Communications’ directors since September with his plan to dismiss Natale and replace him with CFO Tony Staffieri. In a surprise revelation, Edward Rogers said many – including Loretta and Martha Rogers – initially supported his position on ousting Natale.
Once Natale heard about the possibility of being removed, the CEO refused to continue working with Staffieri, Edward Rogers said, necessitating the board to speed up proceedings. At a Sept. 22 meeting, the Rogers Communications board voted 10-1 in accepting Natale’s resignation and to enter compensation talks with Staffieri.
But Edward Rogers contend that on a Sept. 26 meeting, MacDonald informed him “several directors had an alternative approach” and switched course sharply, with Martha Rogers reading out a new plan that kept Natale at his post and terminated Staffieri immediately. The company board then approved the measures at a Sept. 29 meeting that Edward Rogers did not attend, he said.
These rift led to an Oct. 21 meeting where, according to the affidavit, Edward Rogers expressed his concerns. Soon afterwards, he said the group of directors opposing his position met without him to vote him out as Rogers Communications’ board chair.
Lawyers representing the opposing side – including the rest of the Rogers family and the five directors removed by Edward Rogers – will have 21 days to respond to the petition, according to documents.
A court date has been set for Monday, Nov. 1, at B.C. Supreme Court.