But the abrupt change comes less than a week after Jim Shaw displayedunusual behaviour at lunch with investors that was put on by CIBC WorldMarkets at Vancouver restaurant Il Giardino on Friday. Mr. Shaw appearedto be inebriated and responded to investors’ questions with overlyharsh criticism, said two people who were at the lunch.
Other scheduled investor meetings – hosted by Bank of Montreal inMontreal on Monday evening and Tuesday morning and Toronto-Dominion Bankin Toronto later on Tuesday – were cancelled by Shaw over the weekend.
The sudden departure brings to an end a colourful, and mostlysuccessful, 12-year run as the head of Western Canada’s largest cablecompany. But it also raises questions about whether the transition tonew leadership should have occurred before now. The timing of successionhas always been in the hands of the Shaw family, which controls thecompany through multiple-voting shares.
Neither Brad Shaw nor Jim Shaw returned calls for comment. An assistantfor JR Shaw, the company's founder and executive chairman, said Mr. Shawwas unavailable.
Representatives from CIBC did not return calls or e-mails requestingcomment. However, in an e-mail to institutional clients, one of thepeople who organized the lunch for the bank said: “We had Jim Shaw,Peter Bissonnette [Shaw’s president] and [chief financial officer] SteveWilson marketing on Friday and it is fair to say the transition fromJim Shaw to Brad Shaw is coming at the right time. Jim’s behaviour wasextremely unprofessional, and for those that witnessed it firsthand, Ido apologize.”
In a statement on Wednesday evening, Jim Shaw said: “We are well underway in the integration of the Shaw Media assets and it became clear toBrad and I that it would be best for Brad to assume the role of CEOimmediately so that he can move forward with the necessary decisions.”
Several prominent investment firms in Vancouver were represented at thelunch. Three people who attended the lunch at the posh Italianrestaurant, where around 20 members of the city’s investment communitygathered around a long table in a private room, said it started as anawkward and embarrassing affair and got worse as it progressed.
Mr. Shaw has long been known for his brash and colourful remarks onanalyst calls and in interviews, but his behaviour on Friday went wellbeyond his regular comportment, according to people familiar withFriday’s events. These people commented that the tenor and severity ofthe insults this time around were shocking. None of Mr. Shaw's remarkswas met with laughter, said people who were at the lunch. In particular,some attendees were shocked that Mr. Shaw rudely silenced Mr.Bissonnette and Mr. Wilson when the two executives tried to answeranalysts’ questions.
Mr. Shaw also asked inappropriate questions of portfolio managers, suchas how much stock they owned and whether they held shares in TelusCorp., Shaw’s Western Canadian rival. When one investor criticizedShaw’s call centre service, Mr. Shaw threatened the questioner with “theback of his hand,” said person who was there.
Mr. Shaw belittled investors who did not hold a large amount of thecompany stock, calling one person who oversaw a fund with 300,000 Shawshares a “lightweight” and “pathetic,” said the person.
“The whole thing seemed in jest, in poor taste absolutely, but certainlynot malicious,” said another portfolio manager who attended the lunch.“I would just call it unprofessional and unfortunate. Because I thoughtthat Peter and Steve came across as quite engaging. Jim was just a bitof a distraction.”
Less than a month ago, when Brad Shaw’s promotion was announced, JimShaw denied that the changeover was related to his ability to continuesteering the Calgary-based cable company. “I hear there’s lots ofrumours out there we’re doing this because Jim is sick and that. We'renot doing that,” Jim Shaw told analysts on a conference call on Oct. 22.
Wednesday night, Shaw Communications said Jim Shaw would benon-executive vice-chairman; previously, he was supposed to be executivevice-chairman. He no longer appears on the company website listing thecompany’s executive officers.
“Jim Shaw is obviously a very passionate guy about his business and isvery colourful in the way that he deals with questions and issues whichcertain shareholders have brought forward in the past,” said MatthewZabloski, a portfolio manager with Delbrook Capital Advisors, who wasscheduled to be at the lunch but cancelled when it was delayed by 45minutes. “He's a passionate guy. And to be totally honest, that's notalways a bad thing.”
Previously, Mr. Shaw has been extremely critical of industry analystswho asked tough questions about the company, and of competitors in theindustry. Earlier this year, Mr. Shaw made a reference to a “camel” whendiscussing Egyptian-financed Wind Mobile on a conference call. Windchairman Anthony Lacavera called his comment a “racial slur.”
With a report from Boyd Erman