TORONTO β Edward Rogers is out as board chair of Rogers Communications Inc., a move that comes as the latest development in a boardroom drama that has prompted the departure of a senior executive and the launch of an executive oversight committee.
In a statement Thursday afternoon, the company said John A. MacDonald will take over as chairman of the Rogers board of directors.Β
βThis has been a challenging time for the Corporation and I want to reaffirm on behalf of the majority of the Board our support for and total confidence in the management team and CEO of Rogers Communications,β said MacDonald in the statement.
Edward Rogers, who has served on the Rogers board since 2012, will remain on the board as a company director, the statement said.
Rogers Communications has been embroiled in an executive power struggle which developed after Edward Rogers tried to put former chief financial officer Tony Staffieri into the role of CEO and replace other members of the leadership team, according to media reports. Staffieri left the company effective Sept. 29, with Paulina Molnar named interim CFO.Β
Thursday, the board announced it has formed an executive oversight committee "to establish clear protocols for interactions between the chair and members of management" and said it would undertake a comprehensive corporate governance review.Β
"The board believes that these initiatives will further strengthen the companyβs corporate governance practices," it says in the management discussion and analysis document released along with the company's third-quarter financial results.Β
Joe Natale, president and chief executive of Rogers, publicly addressed the feud for the first time during the telecom company's quarterly earnings call Thursday morning.
His comments overshadowed the results, which analysts generally characterized as positive, and come as Rogers works to complete its purchase of Shaw Communications Inc.
Natale said he continues to have "strong unequivocal support" from the family-controlled firm's board of directors.Β
The statement comes after media reports describing an attempted ousting of Natale by board chair Edward Rogers. The attempt was blocked by other members of the board, including Rogers' sisters and mother, multiple reports say.
"I feel supported and rest assured that the entire executive team is focused on two things," Natale said during the conference call with analysts. "One, running the business to keep driving performance, and two, landing the Shaw transaction and the synergies and integration efforts that stand behind it."
Rogers reported a profit of $490 million, down from $512 million in the same quarter last year, as its revenue held steady for the quarter ended Sept. 30.
The cable TV and wireless company said the profit amounted to 94 cents per diluted share, down from $1.01 per diluted share a year ago.Β
On an adjusted basis, Rogers says it earned $1.03 per diluted share, down from an adjusted profit of $1.08 per diluted share a year ago. Analysts on average had expected an adjusted profit of $1.02 per share, according to financial markets data firm Refinitiv.
A TD Securities Inc. client note called the results positive, saying the increase in new wireless subscribers and low churn was a "huge beat."
Rogers added 175,000 postpaid wireless subscribers, the highest third-quarter increase in 13 years. It also posted the lowest-ever third-quarter postpaid churn, which refers to the number of customers leaving.
"While messy boardroom and family discussions continue to play out in the media, the (third-quarter) results from Rogers show meaningful signs of improvement on many key metrics," the TD Securities note said.Β
"Service revenue growth also exceeded our above consensus expectations, and we note that the two-year growth ... improved meaningfully."
Rogers revenue for the quarter totalled $3.67 billion, identical to the same quarter last year, as higher service revenue in its wireless and cable businesses were offset by lower media and wireless equipment revenue.
The Shaw deal was announced earlier this year in a transaction valued at about $26 billion, including the assumption of $6 billion in debt. The acquisition is awaiting regulatory approval.
This report by The Canadian Press was first published Oct. 21, 2021.
Companies in this story: (TSX:RCI.B, TSX:SJR.B)
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