The white envelope that arrived at the Toronto executive offices of TransCanada PipeLines Ltd. last April 25 bore no return address and contained a letter from an anonymous sender. But TCPL chairman Gordon Osier said that the contents of the letter surprised him. The two-page document accused the company’s dynamic 51year-old president, Radcliffe Latimer, of using company jets for personal travel and engaging in questionable expense-account spending. An intensive six-week company investigation by Toronto litigation lawyer Colin Campbell and the company’s auditors, Peat Marwick Ltd., found that there was no substance to the allegations. Still, Osier said the company’s board of directors concluded that Latimer’s corporate style was “radically different” from theirs, and last week they announced his resignation. Osier told Maclean’s: “TransCanada PipeLines is a federally regulated company. We have to be purer than Caesar’s wife.”
Osier refused to describe the contents of the letter, which the sender also mailed to Revenue Canada. He said only that the investigation revealed “philosophical differences” between Latimer and the board on his approach to his duties as president. Osier claimed that he was previously aware of “isolated instances” involving Latimer’s spending habits, but that he “was not aware of the totality” of them. The chairman also noted that soon after Latimer joined the company the new president authorized the purchase of a second executive jet without board approval. Added Osier: “Ask me a month from now how many jets we have.”
Many industry analysts expressed surprise at Latimer’s resignation and said that interest in another job may have led to his departure. Since joining TCPL in December, 1979, after leaving CN Rail, Latimer played a major role in increasing the company’s sales of natural gas to the United States and in its diversification into oil and gas exploration and development. Indeed, in 1984 TCPL, whose main business is the operation of anll,000-km natural gas pipeline between Alberta and Quebec, reported profits of $211 million, up from $87 million in 1979.
Last year Latimer earned a salary of $415,084, in addition to a rich package of benefits. According to management consultants, those benefits generally include the use of a company car, membership in at least two business clubs, generous expense accounts, life and health insurance policies and low-interest personal loans for purchasing a house or company stock. Indeed, when he resigned Latimer had accumulated $5.5 million in TCPL stock.
Many companies maintain that those enticements are necessary to attract and hold high-calibre executives. But they differ in their views on what constitutes abuse of executive privileges. Said Barney McGrogan, a partner with executive search consultants Woods Gordon in Calgary: “Some companies do allow [personal trips on corporate jets] from time to time.” For his part, Latimer said he would have “no comment now and no comment later” on his sudden departure. And Bay Street insiders were already speculating on his next high-profile assignment.
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