Succession talk looms for TD’S CEO, Jefferies analysts say
Succession planning is emerging as a key theme for Canada’s biggest lenders this year, particularly at Toronto-dominion Bank, according to a new report from Jefferies Financial Group Inc. analysts.
“Although we are not predicting a changing of the guard tomorrow, we believe CEO succession planning and the banks’ senior executive management team bench strength could be focal points for the market in the very near term,” analysts John Aiken, Joe Ng and Aria Samarzadeh wrote in a note to clients this week. “On top of the list, in our view, is TD Bank and its current CEO Bharat Masrani.”
Masrani, 67, has been in the role for about a decade — as have the chief executive officers at Royal Bank of Canada and Canadian Imperial Bank of Commerce — and is also the oldest among the leaders of country’s five biggest banks.
Toronto-dominion is dealing with a series of headaches south of the border after a United States Department of Justice probe into deficiencies related to its anti-money-laundering
practices contributed to the bank abandoning a planned acquisition of Memphis-based First Horizon Corp. last year. It could face a fine of between US$500 million and US$1 billion, according to analysts’ estimates.
“We believe Mr. Masrani could soon decide to call it a day and walk into the sunset for a well-deserved retirement,” the Jefferies analysts wrote, adding that this brings up the question of “bench-strength depth.”
The example of Bank of Nova Scotia recently tapping banking outsider — and former director — Scott Thomson as its new leader shows that “a lack of ready replacements for the CEO can create significant concern in the market,” the analysts said.
“TD has seen some notable turnover in its executive ranks in recent years and its choice in successors is not as wide as it once was.”