Former Prime Minister Brian Mulroney will be named chairman of the board at Quebecor’s annual meeting next month, the company disclosed in a corporate filing on Wednesday, May 29, 2014.Fred Lum/The Globe and Mail
Former Prime Minister Brian Mulroney is poised to assume greater responsibility at telecom and media giant Quebecor Inc. as the company draws a further line between itself and its controlling shareholder, Pierre Karl Péladeau.
Mr. Péladeau, who was elected to the Quebec legislature in April, is considered a top candidate to take over the leadership of the Parti Québécois, which lost power in the election. His political ambitions have been seen as hindering Quebecor's efforts to expand its cellular business outside Quebec. Mr. Mulroney, an ardent federalist – along with a new vice-chair and a new CEO who have federalist leanings – is viewed as someone who can smooth the way in Ottawa, which regulates the cellphone industry.
The company disclosed in a corporate filing on Wednesday that Mr. Mulroney, 75, will be named chairman of the board at Quebecor's annual meeting next month. The filing also revealed Quebecor paid outgoing chief executive Robert Dépatie $7.8-million after he decided to resign for undisclosed health reasons in April.
Mr. Péladeau stepped down as chairman in March, when he announced plans to enter politics. At the time, he said he would place his financial interests in the company in a blind trust if elected. However, questions have remained about his influence inside the company. He gave up the CEO post last year and was replaced by Mr. Dépatie. A source close to the company said Mr. Péladeau remained actively involved in the operations despite no longer holding an executive position. This "blurred the lines of authority" within Quebecor and contributed to Mr. Dépatie's recent departure.
Mr. Mulroney, who is now vice-chairman of the board, is seeking to prevent any similar meddling by Mr. Péladeau and plans to take on a more direct role, the source said. Mr. Péladeau – through the manager of his blind trust – would be consulted only on transactions that directly affect his ownership stake, such as a major acquisition or sale.
Quebec businessman Pierre Laurin is set to replace Mr. Mulroney as vice-chairman at the annual meeting on June 19. New CEO Pierre Dion – who ran Quebecor's broadcast business TVA Group for almost a decade – takes full control of the top executive job on Friday (Mr. Dépatie had agreed to stay on during a transition period until May 30).
The new roles of Mr. Mulroney, Mr. Laurin and Mr. Dion could help ease Quebecor's relations with the federal government, which has an active interest in encouraging a viable fourth wireless carrier to compete with national incumbents Rogers Communications Inc., BCE Inc., and Telus Corp. Quebecor's Videotron division recently got licences for cellular airwaves in Ontario, British Columbia and Alberta, and it has been mulling an expansion outside Quebec if it deems the "right conditions" are in place.
In an interview on Wednesday, current company chair Françoise Bertrand said she felt it was time to step down. "The events of this spring led to a lot of changes, and I didn't feel as comfortable." Asked if a disagreement had led to her departure, she refused to comment. "I leave with my head held high. I leave with no rancour and without regrets."
In its corporate filing, Quebecor said it paid Mr. Dépatie $7.8-million to recognize his "outstanding contribution to the success of the corporation." Spokesman Martin Tremblay added that the fact that he retired for health reasons was also a factor in the payment agreement.
Mr. Dépatie, who is in his mid-50s, was granted 1.2 million stock options last year when he was promoted to CEO and the company said those have been cancelled due to his departure. He also has non-compete obligations to the corporation for an undisclosed period. His total compensation for 2013 was valued at $14.8-million, but that included $8.8-million attributed to the options.
Richard Leblanc, associate professor of law at York University in Toronto, an expert on corporate governance and ethics, said the payment to Mr. Dépatie is "anomalous" because compensation is designed to create an incentive for key executives to stay, not reward them for leaving voluntarily.
"What it appears is they're allowing him to resign for health reasons and they're making him whole – and that's not the point of compensation, the point of compensation is retention," he said. "If you leave, you leave, and you're not going to get paid."
Mr. Péladeau won a seat in the Quebec National Assembly in the riding of St. Jérôme, outside Montreal. However, the PQ was defeated, a fate some attributed to Mr. Péladeau reopening the debate on sovereignty.
Mr. Mulroney was a long-time mentor to Mr. Péladeau, and was said to have been disappointed when he announced he was running for the PQ.