One day, Joe Natale was CEO of Rogers. Later that night, he was dating. Two days later, he was CEO again.
Rogers Communications Inc. even had a press release drafted announcing his departure, one that promised a “smooth transition” while he passed the reins to CFO Tony Staffieri on October 1, but it was never released.
Edward Rogers’ plan to package Natale was derailed, Star has learned, in part because several independent directors were angry that Edward had approached Natale without consulting the board first and began to strike a deal that would cause him to leave the company. company. .
Edward first raised his concerns about Natale’s performance at a full board meeting on September 22, saying that he had started talking to Natale about a possible resignation and wanted Staffieri to take over. The board agreed to meet again two days later, when they voted 10 to 1 to accept Natale’s retirement and approve a generous exit package.
But two sources with knowledge of the events said some directors were upset that Edward presented the board with Natale’s retirement and Staffieri’s promotion to CEO as practically a closed deal and felt that proper governance procedures had not been followed.
(The Star does not identify the sources because they were not authorized to speak publicly on this matter.)
That led to several independent directors on the board, along with Edward’s mother and two sisters, changing their minds over the weekend. At a subsequent board meeting just two days later, they backtracked and voted to rescind plans related to Natale’s retirement.
Edward, who was chairman of the board, said in a court docket that he followed proper procedure and that the changes were necessary to improve the company’s performance. He argues that it is the actions of the independent directors that have been inappropriate and led to the legal petition he launched this week in the British Columbia Supreme Court to legitimize a newly constituted board.
In public statements Wednesday, Rogers Communications directors Alan Horn, Philip Lind and Robert Gemmell supported Edward’s actions.
Edward said at the court filing that he hoped to initiate a formal leadership review and had spoken with several directors individually, but that his plans were delayed when Natale was mistakenly flagged in mid-September on a call in which he heard Staffieri speak. about plans to replace it.
He revealed his concerns that the CEO was not performing well and his hope to negotiate a retirement package with Natale to the full board at a board meeting on Wednesday. By the time a follow-up board meeting took place two days later, on September 24, Natale had agreed with Horn on the terms of his departure.
During that meeting on Friday, several independent directors spoke out against Edward’s actions, including Bonnie Brooks and David Peterson, who was the only board member to vote against accepting Natale’s resignation. Sources said some of the directors reluctantly voted in favor because they wanted to approve a fair compensation package for Natale, who had already agreed to leave.
(Peterson is also a vice president of Torstar Corp., the company that owns the Toronto Star.)
The next day, a series of phone calls were made between the independent directors (Peterson, Brooks, John MacDonald, and Ellis Jacob) and Loretta Rogers, Martha Rogers, and Melinda Rogers-Hixon. Melinda even went to see Peterson at his farm on the outskirts of town to discuss the situation, the sources said.
Earlier in the week, Edward’s mother, Loretta, had read a statement to the board supporting the promotion of Staffieri to CEO. But now he says his support was based on incomplete and inaccurate information provided to him by Edward and Horn.
“As soon as I was able to converse with independents and develop a more complete and unbiased perspective on the issue, I changed course,” he said Tuesday.
Sources said Rogers’ independent directors and women also spoke with Natale, who said he would stay with the company if he had the support of the board and if Staffieri was fired.
Meanwhile, Edward Rogers had been negotiating all weekend with Staffieri, working out the terms of his compensation package as CEO.
When the board reconvened Sunday night, Edward began presenting the details of Staffieri’s compensation package, but was interrupted by MacDonald, who said several other directors had come up with a different proposal.
Martha Rogers then began to read a new set of resolutions, which included revoking the board’s approval of Natale’s retirement, firing Staffieri, conducting a corporate governance review, and convening a new board committee to manage Edward Rogers’ interactions with company executives.
Edward said in the court file that he, along with his allies Horn, Philip Lind and Robert Gemmell, expressed shock at this turn of events, saying: “None of us had been consulted or notified about this new resolution, the substance of which contradicted the board’s discussions and resolutions in past meetings. ”
On Wednesday, the board met again and confirmed the weekend’s decisions to backtrack on Natale’s retirement and fire Staffieri. Edward and his allies Lind and Horn were not present for the vote.
Within approximately 48 hours, Natale had regained his control over the CEO job.
But the weekend set in motion events that would lead Edward to lose confidence in the five independent directors (former Rogers director John Clappison had returned to the board in the midst of this and aligned himself with the group of four. ) and replaced them with nominees of his own.
He did so by written resolution and using his authority as chairman of the family trust that controls the voting shares of Rogers Communications. His opponents say he should have called a shareholders’ meeting.
In his court filing, Edward said he believed the situation “had become untenable” and that the independent directors were “operating without transparency” and “ignoring the views of the majority shareholder.”
“As chairman of the Rogers Control Trust, it is my duty to ensure that the company is properly governed on behalf of all stakeholders,” Edward Rogers said in a statement Tuesday. “I take that responsibility very seriously.”
The matter will be heard by a judge in Vancouver on Monday.