This is a big change for TiVo, whose stock price has declined nearly 34% over the last 12 months. The company says that CEO Tom Rogers will give up the top job at the end of January, but remain as the non-executive Chairman.
The board has formed a search committee to find a replacement. Rogers’ “accomplishments aren’t fully reflected in TiVo’s stock price,” says lead independent director Dan Moloney.
The company plans to take a one-time charge to cover “separation costs and expenses” for Rogers, who has led TiVo for about 11 years. But it adds that the change has nothing to do with its earnings for the fiscal third quarter, which ended in October. They will be released a week from today.
“TiVo is a great company today — and I have thoroughly enjoyed the challenge of turning it around and building it from its DVR roots into the leader in providing next-generation TV in the United States and around the world,” Rogers says. Before joining TiVo, Rogers was CEO of Primedia, and President of NBC Cable where he helped to create CNBC and MSNBC.
Rogers owned about 5% of TiVo’s voting shares as of January and his compensation package for the fiscal year that ended in early 2015 reached $11.4 million, according to TiVo’s most recent proxy.
The pay package included special awards tied to victories in patent infringement suits against companies including Verizon, Cisco, and Motorola that generated $740 million in settlements over a three year period. His target compensation for the current fiscal year could drop by $2.5 million without the one-time benefit.
TiVo continues to look for courtroom victories: In September it sued Samsung, charging its DVRs improperly use TiVo’s processes that enable viewers to watch one show while recording another.
But investors have wondered how TiVo can grow in the fast-changing TV ecosystem. Pay TV providers are consolidating, and the big powers either favor their own sophisticated set top boxes or want to get rid of boxes entirely.
Rogers promoted TiVo as a solution for people who want to bring together traditional TV and online video services including Netflix. It had about 6 million global customers at the end of July, up 26% from the same point in 2014.
But just 16% bought their DVRs directly from TiVo. Others received its boxes from a pay TV provider — mostly small and mid-sized companies looking to keep up with technologically advanced competitors.
TiVo is trying to revive its direct sales business, which is more profitable. The company recently introduced its Bolt DVR that enables users to skip past ads entirely, not just fast-forward through them.
Yet many customers who use TiVo instead of a cable-provided box find the encryption processes leave them unable to access video on demand and other interactive services.