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How an inadvertent phone call exposed the plan that has plunged the telecom giant into chaos

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Traffic drives past the Rogers corporate head office in Toronto on Oct. 25.Evan Buhler/The Canadian Press


On a Friday in mid-September, several days before many Canadians would cast their ballots in a federal election, Joe Natale had cellphones on his mind.

It’s fair to say the 57-year-old chief executive officer of Rogers Communications Inc. almost always has cellphones on his mind. The company he runs provides more than 10 million people with wireless service, which means roughly one out of every four Canadians uses a device powered by Rogers, and the telecom’s wireless network facilitates millions of calls per day.

But on this day, Sept. 17, Mr. Natale was preoccupied with just one phone call in particular, an accidental one he was never meant to be on.

At the time, Mr. Natale was cooking dinner with his wife. On the other end of the line was Tony Staffieri, the company’s long-time chief financial officer and a close C-suite colleague of Mr. Natale’s. Mr. Staffieri was speaking with David Miller, whose voice would have been familiar to Mr. Natale; Mr. Miller had, until fairly recently, been the chief legal officer at Rogers.

The two men, who sounded like they were on a patio, were talking about how Mr. Staffieri was going to lead the company once Mr. Natale was out of the way. This was news to Mr. Natale, of course, who was in the midst of the most significant transaction in the company’s 60-year history, a $26-billion merger with Calgary-based Shaw Communications Inc. The deal, if approved by regulators, would transform Rogers into the truly national carrier its founder wanted it to be.

But the plot to oust him did not stop there, Mr. Natale learned as he listened, surreptitiously, to the call. Other senior members of the company’s leadership team – nine of 11, to be precise – would be purged as well, either forced out with Mr. Natale or trailing him.

That inadvertent phone call exposed a plan that has plunged one of the country’s largest telecom and media empires into chaos, and ignited the most spectacular boardroom and family drama in Canadian corporate history – one that that has riven the founding Rogers clan and cast the $30-billlion publicly traded company as the prize in a bizarre, calamitous duel between two factions that both claim to have control. Son against mother, sisters against brother, an old guard rallying to vanquish the new.

The most recent twist has found the two sides headed to court over who sits on the company’s board, after a move by chair Edward Rogers to replace five independent directors who had opposed him was declared invalid by the company.

To piece together what happened over an extraordinary 10 days, The Globe and Mail spoke with four sources familiar with the matter and its fallout, and consulted documents Mr. Rogers filed in court this week. The Globe and Mail is not identifying the sources because they were not authorized to discuss the matter publicly.

The result details a sequence of audacious actions that began with preparations for Mr. Natale’s departure immediately after the plot was revealed, but ended with Mr. Natale holding onto the top job and the exit of his rival and would-be successor – who may yet return to take the throne if Mr. Rogers has his way.


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Joe Natale, right, attends the company's 2019 AGM in Toronto with Edward Rogers, left, when they were the CEO and board chair, respectively.Chris Young/The Canadian Press

On Sept. 18, the day after he overheard Mr. Staffieri’s conversation, Mr. Natale took the matter to the company’s independent directors. That evening, during a phone call with Mr. Rogers, he told the chair he wanted to fire Mr. Staffieri.

But Mr. Rogers told Mr. Natale he saw no basis for firing the CFO, according to court documents. The two men agreed to meet the next day to discuss the situation.

John MacDonald, the company’s lead independent director, also attended the Sept. 19 meeting at the company’s Toronto headquarters. At one point, Mr. Rogers took Mr. MacDonald aside privately in a nearby room and informed him that he was going to fire Mr. Natale, according to a source. When the two returned to the meeting with Mr. Natale, Mr. MacDonald was ashen-faced, the source said.

For several minutes, Mr. Natale outlined his reasons for wanting to terminate Mr. Staffieri, which included the breach of trust relating to the plan to take over the CEO job.

That’s when Mr. Rogers revealed to Mr. Natale that it was he, Edward, and not Mr. Staffieri, who had devised the plan to oust the CEO.

In Mr. Rogers’s telling of events, he and Mr. MacDonald had already discussed the matter on Sept. 15. “Mr. MacDonald told me that he did not have the same level of concern with Mr. Natale that I did, but that he supported a review process,” Mr. Rogers said in a court filing. (Mr. MacDonald said in a statement on Tuesday that it’s “utterly false” that the company’s board had “pervasive and serious performance concerns” about Mr. Natale.)

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John MacDonald.Rogers

Mr. Rogers, in a bid to minimize the disruption from Mr. Natale’s imminent exit, said he was prepared to work with Mr. Natale on a resignation package and consulting agreement to assist with the leadership transition and the acquisition of Shaw. The terms of Mr. Natale’s resignation were hammered out over the following days.

In a court document filed in the B.C. Supreme Court, Mr. Rogers said he had grown increasingly concerned in the past two years over Mr. Natale’s performance.

The company had lagged its peers, BCE Inc. and Telus Corp., on certain key metrics, had missed its budget in the previous two years, and its stock price had stagnated. He also said he had “serious concerns” about Mr. Natale’s ability to lead the company after the integration of Shaw.

Mr. Rogers said he had discussed his concerns at length with a handful of directors – long-time family friends Alan Horn and Philip Lind, independent director Robert Gemmell, his mother, Loretta Rogers, and his sister Martha Rogers.

Mr. Rogers had also discussed his concerns about Mr. Natale’s performance with former Quebecor Inc. head Robert Dépatie, a company director who was to become president of the cable division under Mr. Rogers’s plan.

Mr. Rogers said he hadn’t broached the topic with his sister, deputy chair Melinda Rogers-Hixon, until Sept. 15 because he was concerned that she would relay the information to Mr. Natale. “As a result of Mr. Natale learning about the ongoing discussions regarding his role, we were forced to accelerate the timeline and bring the matter before the full board of RCI as quickly as possible,” Mr. Rogers said in the legal filings.

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Melinda Rogers-Hixon and her lawyer, Walied Soliman.Christopher Katsarov/The Globe and Mail

The plan seemed to be going smoothly at first, despite the accelerated timeline. At a board meeting on Wednesday, Sept. 22, Loretta Rogers read a statement that she later said her son had written for her.

“To start, this proposal has my full support – Joe retiring, the election of Tony Staffieri to CEO and the hiring of Robert Dépatie as president of cable,” Loretta Rogers said. “Joe is a good man. We all like him. He has been here four-and-a-half years and he has had his chance. I am hopeful Edward and John MacDonald can still come to terms with Joe, but however that turns out we must move forward.”

She went on to say Mr. Staffieri would be a strong CEO. “He is all about results and execution and that is what we need as we have a tough five years ahead of us with integrating Shaw and achieving the objectives of that deal.”

At a meeting on Sept. 24, the board approved Mr. Natale’s resignation. Only one director, former Ontario premier David Peterson, voted against the resolution, according to court documents. Mr. Peterson was livid, viewed the move as a unilateral decision and threatened to resign from the board, according to sources.

Although the board deferred a resolution to appoint Mr. Staffieri as CEO to a later meeting, a press release was drafted to announce the change. The release praised Mr. Staffieri’s “incredible work ethic” and described him as “one of the company’s and telecom industry’s most highly regarded leaders.”

Mr. Natale, meanwhile, had started telling his senior executive team that he would be leaving the company and laying the groundwork for Mr. Staffieri to take over. “I spoke to Mr. Natale that weekend and he seemed pleased with the arrangements,” Mr. Rogers said.

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Martha Rogers.Christopher Katsarov/The Globe and Mail

By Saturday, Sept. 25, things had started to change. Martha Rogers had become increasingly concerned after learning that the independent directors had a different set of facts on Mr. Natale’s performance than what was presented to the family. She showed up at her sister’s door that morning, and Ms. Rogers-Hixon later visited Mr. Peterson at his Caledon farm. Conversations took place that day between Ms. Rogers-Hixon, Martha Rogers and the independent directors, who raised issues with Mr. Rogers’s behaviour over several years, according to a source.

By the end of the day, Mr. Natale had changed his mind and agreed to stay on as CEO.

The next day, when Mr. Rogers kicked off the board meeting to discuss Mr. Staffieri’s compensation, he was interrupted by Mr. MacDonald, who said he and several of the other directors had come up with a better plan. He then turned the floor over to Martha Rogers, who read out a resolution to rescind approval of Mr. Natale’s resignation, enhance the terms of his employment, immediately terminate Mr. Staffieri and undertake a corporate governance review. The resolution would also establish a new executive oversight committee to restrict Mr. Rogers’s interactions with management and appoint John Clappison to the board.

Mr. Rogers, Mr. Gemmel, Mr. Horn and Mr. Lind expressed shock. “None of us had been consulted or given notice of this new resolution,” Mr. Rogers said in court documents. Mr. MacDonald was asked several times why he and the others had changed their minds in the span of 48 hours, but said only that he thought this resolution was better, according to Mr. Rogers’s account.

Loretta Rogers said in a statement earlier this week that she reversed course after discovering that her son and Mr. Horn, the company’s former chief financial officer, had misled her about Mr. Natale’s performance.

A vote on the resolution was deferred to the next board meeting.

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Loretta and Martha Rogers.Christopher Katsarov/The Globe and Mail

The next day, on Sept. 27, Mr. Horn, Ms. Rogers-Hixon and Mr. Rogers travelled to Loretta’s cottage, where she was staying with Martha. Mr. Rogers proposed a compromise that would see Mr. Natale and Mr. Staffieri continue working together through the closing of the merger. Ms. Rogers-Hixon said there might be a path forward, according to Mr. Rogers.

But the next day, Mr. MacDonald sent Mr. Rogers an e-mail dismissing the idea. “Edward, we have reviewed the proposal you suggested to me yesterday and have rejected it,” he wrote.

Mr. Rogers said that by that point, several of the independent directors – Mr. MacDonald, Mr. Peterson, Bonnie Brooks and Ellis Jacob – had aligned as a group and retained their own lawyer.

Mr. Rogers tried to delay the next board meeting, which was scheduled for Sept. 29, to Oct. 1, but the majority of the board disagreed.

On Sept. 29, in the third-floor boardroom of the company’s Toronto headquarters, the resolution to rescind Mr. Natale’s resignation, terminate Mr. Staffieri and put in place the other measures was passed. Mr. Gemmel was the only director present who voted against it.

Mr. Rogers, Mr. Horn and Mr. Lind were not at the board meeting – they had attended a gathering of several members of the 10-person advisory committee that oversees the Rogers family trust, which controls the telecom through its ownership of 97.5 per cent of the voting class A shares. (Edward’s mother and sisters, although members of the advisory committee, skipped the control trust meeting in favour of the board meeting.)

A press release announcing Mr. Staffieri’s departure went out that evening, sending shock waves through telecom and financial circles. Analysts found the release unusual because it gave no reason for Mr. Staffieri’s departure, and no transition period.

“On behalf of the Rogers team, I thank Tony for the many contributions he made to our company including ensuring the integrity of our financial reporting over the nearly 10 years he served as our CFO,” Mr. Natale said in the release. “We wish him well in his future endeavours and look forward to building on the strong foundation he helped lay for us.”

With a report from Andrew Willis



Inside Rogers: More from The Decibel

Telecom reporter Alexandra Posadzki spoke on The Globe and Mail’s news podcast to explain the complicated saga at Rogers. Subscribe for more episodes.


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