Quebecor chief Pierre Peladeau stepping down to focus on strategy
Pierre Karl Peladeau, president and CEO of Quebecor, takes part into a discussion at the SportAccord conference in Quebec City on Wednesday, May 23, 2012. (The Canadian Press/Francis Vachon)
MONTREAL - The high profile and sometimes controversial CEO of Quebecor Inc. is stepping down to have more personal time, but Pierre Karl Peladeau will still have influence over his company's corporate strategy.
Peladeau, known by his nickname PKP in French and English, will remain as chairman of one of its main subsidiaries, Quebecor Media. That division includes newspapers hit by weak advertising and recent layoffs and will require some of his attention to improve it.
Peladeau said he will provide advice and leadership on strategic projects "vital" to the media and telecom company, but also cited family and philanthropy as reasons for stepping down.
"Because one cannot be a part-time CEO, I have decided to retire from this position and devote my life to other pursuits," he told a conference call after the company released its quarterly results Thursday.
His executive duties will be taken over by Robert Depatie, who has been president and CEO of Quebecor's cash-generating Videotron cable and Internet service since 2003.
Becoming more involved with philanthropic activities is something his late father would support, Peladeau said.
"My dad used to say when you receive so much in life, you must give back even more."
But Peladeau, 51, also will be vice-chairman of Quebecor Inc. (TSX:QBR.B), founded by his father Pierre Peladeau in the mid-1960s based on newspapers and printing.
Under the younger Peladeau's leadership, Quebecor grew its cable and television subscribers, acquired more newspapers, started home phone service and launched a wireless division to appeal to mobile phone users.
Its TVA network is the largest private broadcaster in Quebec. Peladeau also started Sun TV, a right-leaning all-news cable channel.
But Peladeau's 14-year tenure as head of one of Canada's largest media and telecom companies, wasn't without incident and controversy.
Peladeau sued a Radio-Canada vice-president for alleged defamatory remarks, in a case that was eventually settled out of court. He also threatened legal action against the Crown broadcaster because it didn't advertise in Quebecor's French-language newspapers.
There were years-long lockouts at major newspapers, Le Journal de Montreal and Le Journal de Quebec, which resulted in few employees going back to work.
The company's Quebecor World printing division ended up in bankruptcy and was bought by an American rival in 2009, although Quebecor still does flyer printing and distribution across Canada.
Peladeau acquired cable company Videotron Ltee in 2000 with the help of Quebec pension fund manager Caisse de depot et placement du Quebec, thwarting a bid by Toronto-based Rogers (TSX:RCI.B). Quebecor's cable TV and Internet services are dominant in the province.
He is known as being technologically progressive and has promoted the sharing of content on all platforms from Quebecor's assets such as television shows and magazines, known as convergence.
However, he also has been described as mercurial and doesn't appear to suffer fools gladly.
Peladeau said he does not plan "to sell any of my family's shares," and added he will spend more time with his wife, well-known TV host and producer Julie Snyder, and their three children.
"I want to be a good father to them."
Peladeau joined the company in 1985 as assistant to the president and became Quebecor president and CEO in April 1999.
CWA Canada, the union that represents workers at several Quebecor newspapers, said Peladeau leaves behind a "sorry legacy."
"Under Mr. Peladeau's watch, we have seen once proud local newspapers cut so badly that they no longer provide a quality product. That's bad for communities, bad for workers, and bad for democracy," said CWA Canada director Martin O'Hanlon.
"I'd love to believe that the change will bring a commitment to quality journalism, but with Mr. Peladeau still in charge of corporate strategy, I think that unlikely."
Quebecor forecasts that Sun TV will lose $19.5 million this year and continue to take losses in the tens of millions through to 2020 unless the federal regulator requires cable and satellite companies to carry it on their basic service.
McGill University associate professor Karl Moore said Peladeau doesn't have a "perfect record," but has taken the company beyond just newspapers, which is a challenging business in which to make money.
"PKP will be helping on the strategy side," said Moore, who teaches at McGill's Desautels Faculty of Management.
"He'll continue to think about where they are going to be in five to 10 years, how are they going to expand outside Quebec, do they go into the U.S. and go globally?"
The usual tenure for a CEO is eight to 10 years in a big company, Moore added.
"It's also a long, hard slog to be CEO for that many years. It's very demanding. It takes high energy levels."
On Thursday, along with the management changes, Quebecor announced that its overall revenue last year was $4.35 billion, up $145.2 million from the previous year. It said the main growth came from its telecom segment.
In the fourth quarter ended Dec. 31, Quebecor had $1.14 billion of revenue, down $5.6 million or half a per cent from a year earlier.
Quebecor's net income plunged to $9.2 million or 15 cents per share in the quarter, a decline from $85.4 million or $1.34 per share from a year earlier -- mostly due to non-cash items required under standard accounting.
Operating income was steady at $370.8 million -- a slight increase from $369.2 million. Increases at telecommunications and interactive communications offset declines in news media, broadcasting as well as leisure and entertainment.
Quebecor's adjusted income from continuing operations was $56 million in the quarter, up $1 million from a year earlier. For the full year, adjusted income was $196.1 million, up $4.6 million from a year earlier.
The change in leadership will take effect on May 8 when Quebecor holds its annual meeting in Montreal.
Shares in Quebecor were down about 4.5 per cent, or $2.09, to $43.98 in afternoon trading on the Toronto Stock Exchange.