Rogers CEO exits: Where has Succession-like family feud left RCI stock?

Highlights 

• Rogers Communications Inc (TSX: RCI.B) announced on Tuesday, November 16, that Joe Natale is being replaced as the chief executive officer.
• This change in leadership comes less than two weeks after a British Columbia court stepped in to settle the Rogers’ family dispute.
• Rogers’ stock price has been fluctuating since the family feud grabbed headlines around September.

Some have been comparing it to satirical TV series Succession, while others have been drawing parallels to the more barbaric, Game of Thrones. But as binge-worthy as it may be for some, the family feud at Rogers Communications Inc (TSX: RCI.B) is very much real, and quite a worrisome turn of events for its shareholders.

Less than two weeks after a British Columbia court stepped in to settle the dispute, the Canadian telecom giant announced on Tuesday, November 16, that Joe Natale is being replaced as the chief executive officer.

The release stated that the company’s board has designated Tony Staffieri as its interim president and CEO.

RCI chair Edward Rogers, in the release, thanked Mr Natale’s “contributions” and stressed that Mr Staffieri will be focusing on the company’s “return to stability” and the merger with Shaw Communications (TSX: SJR.B).

Also read: Rogers (RCI) stock plummets amid family drama: What investors must know

Is the Rogers’ family feud over?

Interestingly, the Rogers family drama kicked up a storm in the public eye with Mr Staffieri’s abrupt exit from his post as the company’s chief financial officer in September this year.

The crack in the family first appeared as Edward Rogers, son of RCI’s late founder Ted Rogers, clashed against the rest of his family over the enterprise’s management staff.

While matriarch Loretta Rogers and daughters Martha and Melinda extended their support to Mr Natale and the existing board, Mr Rogers pitched for a change in the leadership. The rift even saw the scion being expelled from his post as RCI’s chair by the board for a while.

However, using his power as the head of the Rogers Control Trust, which is said to control about 98 per cent of RCI’s voting shares, Mr Rogers announced the removal of five RCI board directors.

The power struggle escalated to a point where there were to sets of Rogers Communications boards reaching out to the shareholders, each claiming their right to the throne.

After the son took his mother and sisters to court earlier in November, Justice Shelley Fitzpatrick ruled in favor of Mr Rogers.

But even as the matter was settled in court, Loretta, Martha and Melinda Rogers reportedly confirmed on Tuesday that they stand strong in their support for Mr Natale, labelling his exit as a “termination” and “misguided decision”.

The Rogers women have also accused Edward of putting “his desire for unchecked control” over the company’s overall well-being.

Also read: Can Cineplex (TSX:CGX) be a phoenix stock?

How has Rogers Communication (TSX:RCI.B) stock been performing?

Rogers’ stock price has been fluctuating since the family feud grabbed headlines around September.

On Tuesday, the telecom stock slipped by 0.23 per cent to close at C$ 60.45 apiece, noting a three-month decline of over five percent.

RCI.B scrip currently holds a year-to-date (YTD) growth of about two per cent and a flat one-year performance.

In October, as the family’s tug of war over the board’s control escalated, the communication giant saw its stock price take the sharpest fall since the 2020 COVID-19 pandemic market crash.

Bottomline

Even as Edward Rogers tightens his grip over the company, it is likely that the power struggle will last a little longer.

In that case, RCI stock could note some volatility, which may leave its shareholders concerned, especially those who have directly or indirectly parked their funds in the telecom juggernaut for their retirement years.

The company is also yet to decide on a permanent CEO to head its C$ 20-billion merger with Shaw Communications. These factors, coupled with the weight of the feud’s legal costs, could also have an impact of Rogers’ stock performance.

Some market experts, however, believe that an established enterprise like Rogers can weather a storm like this without too much damage.

Hence, it seems like the billion-dollar company’s shareholders will have to wait till the Rogers sort out their differences to get some more clarity.