Money invested into Rogers by hardworking Canadians is being controlled irresponsibly: Ryan Bushell
Rogers Communications Inc. will have trouble recruiting top executives if it gets rid of Chief Executive Officer Joe Natale, according to the president of Newhaven Asset Management Inc.
If Edward Rogers manages to retake control of the board and make good on his threat to fire Natale, “How are they going to attract talent to that company? That’s something Edward Rogers should be really thinking about right now,” Newhaven’s president, Ryan Bushell, said Tuesday on BNN Bloomberg television. Bushell’s Toronto-based firm has some client accounts that hold Rogers shares.
Rogers has had frequent turnover in its upper ranks since the death of founder Ted Rogers in 2008. Natale is the fourth person to be CEO since then, including one interim boss.
Natale’s future has been in question since September, when Edward Rogers tried to force him out, citing concerns about share performance and the integration work needed on the company’s US$16 billion takeover of Shaw Communications Inc.
A majority of the board blocked the move, however, setting off a public battle for control of the board that has gone all the way to the Supreme Court of British Columbia. A judge will rule Friday on whether Edward Rogers has the right to unilaterally replace the independent directors who opposed him.
In his filings to the B.C. court, Edward Rogers included an internal presentation on why he believed Natale should go. The presentation highlighted several metrics, including share-price performance and customer service, where Rogers trails wireless rivals BCE Inc. and Telus Corp.
‘COMPETING AND WINNING’
Edward Rogers said he’s not worried about the ability to recruit new executives.
“Upgrading talent doesn’t scare off future prospects -- it attracts them. We are confident that Rogers will continue to draw the very best,” he said in an emailed statement to Bloomberg. “The company has a long history of competing and winning against its competitors and will continue to do so.”
Rogers Communications is controlled by a Rogers family trust that has about 97% of the voting shares. Almost none the shares held by outside investors have voting rights. Edward Rogers’s mother and sisters oppose his plan to drop Natale and voted Oct. 21 to remove him as chairman.
“This is sort of the worst-case scenario for one of those structures,” Bushell said. “You have a small block of shares that controls a much larger company and a bunch of money invested by hard-working Canadians that is for their retirement -- and really is being controlled right now in a way that is, in my view, irresponsible.”
“When they hired Joe Natale, I really thought they had the right person for the job,” Bushell added. “He’s an incredibly strong executive.”
One senior executive has already hinted that if Natale goes, he’ll go too. Dave Fuller, head of the company’s wireless business, said in a court filing Friday: “He is the only reason I joined RCI, and I do not wish to work for any other CEO.”