Rogers Communications Inc. paid its outgoing CEO Guy Laurence a total of $42.6-million for his three years with the company, according to a new financial filing.
The Toronto-based telecommunications and media company says it paid Mr. Laurence $13.5-million in "separation payments" last year. That included a lump-sum severance payment as well as the accelerated vesting of stock-option awards granted to attract the former chief executive of Vodafone UK Ltd. to Rogers in December, 2013.
In addition to regular salary and bonus compensation, Rogers has incurred one-time costs over the past four years for payments associated with the retirement of former CEO Nadir Mohamed, followed first by recruitment and now severance expenses for Mr. Laurence.
From 2013 to 2016, the company spent a combined $69.3-million on compensation for both CEOs, an average of $17.3-million a year.
Mr. Laurence's time at the company came to an abrupt end in October when he was terminated after clashing with the Rogers family, which has voting control of the company.
Now, Rogers is waiting for former Telus Corp. CEO Joe Natale to take the top job, but he will not join the company until July, when his non-compete agreement with Telus has ended. Filings to date do not reflect any payments or stock-option grants the company might make to Mr. Natale when he starts.
"What we see highlighted here is [that] the cost of turning over your chief executive is substantial to the shareholder," said Paul Gryglewicz, senior partner at Global Governance Advisors in Toronto. He added, however, that at just shy of three years, Mr. Laurence's tenure with the company is in line with the median range of about three or four years for many Canadian CEOs.
"For a TSX 60 company, this is very much the cost of chief executive talent today," Mr. Gryglewicz said.
Details of the payments to Mr. Laurence for his final year at the company are contained in Rogers' annual management information circular, filed with regulators late Friday.
The filing shows Rogers paid Mr. Laurence total compensation of $24.6-million in 2016, including $1-million for salary, $2.1-million in pension value and $5.8-million in cash severance payments.
However, the annual figure for last year includes a value of $7.6-million due to the accelerated vesting of stock options and shares granted as part of a sign-on bonus in 2013. The estimated value of the awards was included in his pay totals in Rogers' 2014 circular.
The 2016 total compensation number also includes the grant value of some stock options that have not yet vested. As part of his separation agreement, Mr. Laurence agreed to forfeit options worth a total of $7.3-million.
After subtracting that forfeited amount as well as the previously reported value of his sign-on options to avoid double counting, Rogers paid Mr. Laurence total compensation of $42.6-million for his time at the company.
Mr. Laurence still owns stock options that will vest over two years following his October departure from the company. He is entitled to keep any of those options that vest either before that "continuation period" of two years is up or before he takes a job with a "named competitor." (Rogers did not specify which companies that includes.)
Mr. Gryglewicz said it is a shareholder-friendly move to provide for a continuation period – rather than accelerating the vesting period and allowing him to exercise the options immediately – because it means that whatever value Mr. Laurence receives for his options will be tied to the performance of the company's shares, which is in part attributable to decisions he made when he was still at the company.
Rogers also committed to cover the cost of moving expenses, up to $100,000, should Mr. Laurence decide to return to Europe within two years.
The company also said in the filing that it has nominated Robert Dépatie, the former CEO of Quebecor Inc. and president of Groupe St-Hubert, as well as Robert Gemmell, the former CEO of Citigroup Markets Canada, as new directors of its board. Rogers will hold its annual general meeting of shareholders on April 19 in Toronto.
Want to interact with other informed Canadians and Globe journalists? Join our exclusive Globe and Mail subscribers Facebook group