Independent directors at Rogers offered to step down from telecom’s board, but decided resigning would have been disruptive to the company and its acquisition of Shaw Communications.CARLOS OSORIO/Reuters
John MacDonald, who was elected to replace Edward Rogers as chair of the board of Rogers Communications Inc. last week, says he and other independent directors offered to step down several times in recent weeks over their concerns with Mr. Rogers’s conduct and his “disregard of good governance practices.”
However, Mr. MacDonald and the other directors ultimately decided that such a move would be highly disruptive to the company and could jeopardize its $26-billion acquisition of Shaw Communications Inc., he said in a court filing Friday.
“We believed in good faith that we would better serve the interests of the company by defending good governance protocols and remaining on the board until a shareholders’ meeting is convened or our terms come to a proper end,” Mr. MacDonald said in an affidavit filed with the B.C. Supreme Court.
The court will hold a hearing on Monday to consider a dispute over control of the Toronto-based telecom giant.
Edward, the son of company founder Ted Rogers, is asking the court to sanction his move to replace five directors with his own candidates for the board seats. Mr. Rogers’s attempt to reconstitute the board is part of a power struggle within the upper ranks of the company and within the Rogers family itself.
Mr. Rogers attempted to oust several executives, including replacing CEO Joe Natale with the company’s then-chief financial officer, Tony Staffieri, but met resistance from some board members and from his mother, Loretta, and sisters Martha and Melinda.
A spokesperson for Mr. Rogers declined to comment.
The conflict boiled over last week when the board met to replace Mr. Rogers as chair – though he remains the chair of the family trust that controls the telecom company. Mr. Rogers subsequently held another meeting, which his mother and two sisters called “invalid,” at which he was reinstated as chair of the company’s board.
Mr. Rogers said his concerns about Mr. Natale stemmed from the company’s lagging performance relative to competitors, its “stagnated” share price and budget targets that had been missed in the past two years.
Mr. Rogers contends that his position as chair of the Rogers Control Trust, which controls 97.5 per cent of the company’s voting shares, gives him the authority to reconstitute the board through a written resolution.
But in another court filing on Friday, Loretta Rogers countered that a memorandum of her late husband’s wishes specified that the chair of the family trust must face “the ‘public gauntlet’ of a shareholders’ meeting” in order to do so.
In his own court filings, Edward Rogers said that while his father stressed “the importance of consultation and discussion,” Ted Rogers also provided “ultimate authority” to the chair to act on the trust’s behalf. Mr. Rogers also said he consulted with members of his family and certain board members about his concerns regarding Mr. Natale’s performance, and his plan to replace him as CEO.
In the filing on Friday, Mr. MacDonald said he does not agree with “many” of the statements in Mr. Rogers’s affidavit, and said that Mr. Rogers was “acting on his own initiative” in firing Mr. Natale and attempting to remove five members of the company’s board without holding a shareholder meeting. He also said that the attempt to oust Mr. Natale happened “without input from, or the approval or knowledge of, the board.”
In his own court filings, Edward Rogers says that while his father stressed ‘the importance of consultation and discussion,’ Ted Rogers also provided ‘ultimate authority’ to the chair to act on the trust’s behalf.Nathan Denette/The Canadian Press
Mr. MacDonald said the first time that Mr. Rogers told him that he had lost confidence in Mr. Natale was during a call on Sept. 15. During the call, Mr. Rogers also said that he had full confidence in Mr. Staffieri and that he planned to make other management changes, Mr. MacDonald said.
“Up until that time, there had been no discussion at the board or, to my knowledge, any of the board’s committees regarding the replacement of Mr. Natale with Mr. Staffieri,” Mr. MacDonald said in his affidavit.
“The board, which oversaw the establishment of the chief executive officer’s performance objectives and the assessment of his performance against those objectives, was of the view that Mr. Natale had met the requisite performance criteria and exceeded his goals,” Mr. MacDonald said.
A number of independent directors were prepared to resign over Mr. Rogers’s conduct, Mr. MacDonald said. At a board meeting on Sept. 22, several of them “spoke out forcefully and at length” against Mr. Rogers for sidestepping the board when deciding to oust Mr. Natale, he added.
“To be clear: at no time did I, or other members of the director group, approve the termination of Mr. Natale’s employment. That had already been done by Edward,” Mr. MacDonald said. “We also understood that Mr. Staffieri had in effect already been anointed by Edward without any search committee or process being undertaken,” he added.
Mr. MacDonald said the situation was “symptomatic of a pattern of behaviour” by Mr. Rogers, who had also bypassed the board when he terminated a previous CEO, Guy Laurence, in 2016.
John Clappison, the previous lead independent director, resigned in January, 2021 over Mr. Rogers’s “repeated efforts to override board-approved policies and practices,” Mr. MacDonald said. (Mr. Clappison was recently reappointed to the board.)
Mr. Rogers also “constantly interfered in the chief executive officer’s decisions to hire or fire company executives,” Mr. MacDonald added. “Put simply, Edward tried to operate as an executive chairman when the board had specifically provided in the position’s job description that that was not the role.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
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