Rogers countersues ex-CEO Joe Natale, demanding repayment of $15M in severance

TORONTO — Rogers Communications Inc. has launched a countersuit against former CEO Joe Natale, seeking to have him repay more than $15 million in severance to the company that fired him.

In a filing in Ontario Superior Court on Tuesday, the telecommunications giant claims Natale tried to "subvert corporate governance and his fiduciary duties for his personal gain."

"He must now answer for his conduct and the harm he caused to the company. And he must repay the significant severance he has already received beyond what he is entitled to under a with-cause termination," according to the statement of claim.

Rogers said it has no further obligations to the former CEO.

The statement of defence and counterclaim comes less than three weeks after Natale filed suit against Rogers for wrongful dismissal and breach of contract, while alleging chairman Edward Rogers carried out "malicious, high-handed, and oppressive conduct."

In court documents filed last month, Natale alleges that Edward and his wife Suzanne Rogers attempted to "tarnish his reputation" after his ouster in November 2021. He says these attempts included hiring actor Brian Cox of HBO’s "Succession" to create a "demeaning" video about him and allegedly distributing it to family members, friends and colleagues, before it was eventually reported on by media.

The clip included a message congratulating Edward Rogers on his “real-life Succession at Rogers Communications" and used an expletive to describe Natale's departure from the company.

The Aug. 17 statement of claim demands a combined $24 million for himself and his firm Natale Industries Inc. including $4 million from an unpaid bonus related to the closing of Rogers' acquisition of Shaw Communication Inc. in April.

None of the claims of either party has been tested in court.

A spokesman for Natale said he denies all of the allegations in the Rogers counterclaim, calling them "completely without merit."

"He is confident that the courts will see this tactic for what it is: a transparent attempt to avoid contractual liability and to further disparage Mr. Natale’s excellent reputation," an email from Bill Walker stated.

Natale's departure from the Toronto-based company was announced after a boardroom power struggle over the chairman's desire to replace him with then-chief financial officer Tony Staffieri, now Rogers' CEO.

Edward's initial attempt to oust Natale in favour of his No. 2 led instead to Staffieri's departure in September 2021, as well as a board vote that saw Edward removed from his seat at the head of the table.

Edward penned a shareholder resolution to oust the five directors who had defied him, without holding a board meeting. The company filed a legal challenge to his revamped board, sparking a court battle over who actually served on it.

A British Columbia Supreme Court judge ruled Edward Rogers' declaration legitimate and he was reinstated as chairman.

Staffieri replaced Natale as president and CEO in the aftermath of the ruling.

Initially, Natale had agreed to resign and negotiated a "generous retirement package," Rogers' statement of defence and countersuit claims, but shortly afterward "reneged on his agreement and began a campaign to entrench himself."

He then "pressed subordinates to execute a series of self-enriching amendments to his employment arrangements" without proper authorization from the board or human resources committee, according to the filing.

"They were premised on an unlawful quid pro quo: his subordinates approved these improvident arrangements at the same time that Natale unilaterally offered and approved generous amendments to their own employment agreements," the court document reads.

Those three executives — one in charge of human resources, another of legal and regulatory affairs — subsequently renounced the "entitlements," while Natale has not, it states.

While the HR committee did green-light one set of entitlements, the committee was not "properly constituted," the filing argues.

On top of $15 million-plus in severance repayment, the company is seeking punitive damages for what it calls Natale's "wanton, high-handed and outrageous disregard" for the interests of Rogers and its shareholders.

This report by The Canadian Press was first published Sept. 5, 2023.

Companies in this story: (TSX:RCI.B)

Christopher Reynolds, The Canadian Press