'PKP' steps aside as Quebecor CEO but will still guide corporate strategy

MONTREAL – The high profile and sometimes controversial CEO of Quebecor Inc. is stepping down to devote more time to family and philanthropy, but Pierre Karl Peladeau will still have influence over the media and telecom company’s corporate strategy.

Peladeau, known in French and English by his initials “PKP,” will remain as chairman of its main subsidiary, Quebecor Media. That division includes newspapers hit by weak advertising and recent layoffs and will require some of his attention.

Peladeau said he will provide advice and leadership on strategic projects “vital” to the 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 are taken over by Robert Depatie, who has been president and CEO of Quebecor’s Videotron cable and telecom 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.

Under the younger Peladeau’s leadership, Quebecor grew its cable and television subscribers, acquired more newspapers, provided home phone service and launched a wireless division to appeal to mobile phone users.

But his 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 lengthy lockouts at major newspapers, Le Journal de Montreal and Le Journal de Quebec, which resulted in fewer 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 printing.

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 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.

Quebecor Inc. currently owns about three-quarters of Quebecor Media, up from 54.7 per cent before it bought part of the Caisse de depot’s interest in October. The media business was formed as a joint venture between Quebecor and the Caisse when they teamed up to buy Videotron.

Peladeau noted that over the past 10 years, Videotron has grown its operating income to $1.2 billion — up from $275 million — as it expanded the range of services to include home phones and wireless communications.

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.

Francoise Bertrand remains chair of the parent company’s board of directors. Serge Gouin, who has been chairman of the Quebecor Media board since the company’s creation in 1999, will retire.

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