The heads of Canada’s two largest banks have held their jobs for more than a decade, but Gord Nixon and Ed Clark have nothing on Larry Pollock.
When Canadian Western Bank holds its annual meeting today, it will mark the end of Mr. Pollock’s remarkable 23-year tenure as chief executive officer of the aggressive Edmonton-based lender. As the longest-serving CEO in Canadian banking, he will hand the reins to his successor, long-time understudy and former chief operating officer Chris Fowler.
How remarkable is Mr. Pollock’s longevity? Well, at a time when Mr. Nixon at Royal Bank of Canada and Mr. Clark at Toronto-Dominion Bank are facing questions about when they will step aside, neither has served nearly as long as Mr. Pollock. In fact, add Mr. Nixon’s 111/2 years, and Mr. Clark’s 101/2 years as CEO and they still don’t add up to Mr. Pollock’s time in the job.
But as the iron man of the sector, Mr. Pollock, 66, believes that there is no magic number as to how long a bank boss should stay. “It’s as long as the CEO is effective, has the drive, and the fire in his belly, and still has an active imagination on the strategic side,” he said Wednesday. “Then you look at how that person executes. Can they execute?”
Mr. Pollock, who will remain as an adviser to the bank’s board for two years, leaves behind a distinct void in the Canadian banking sector. Known as a brash, plain-speaking CEO who always believed that he could grow a smaller Western bank just as fast, or faster, than his larger competitors on Bay Street, Mr. Pollock has never been shy about criticizing how larger banks operate.
Though Canada’s Big Six banks made more than $7.7-billion profits in the first quarter, Mr. Pollock is no fan of the numerous one-time items and adjustments many of the big banks report each quarter, which he argues clouds the growth picture, making things look more robust than the numbers actually are. “The market loves growth. You’ve seen that in all the results the banks have released,” Mr. Pollock said. “But you get so many of these one-time things, you can engineer earnings.”
He said he leaves a bank that has always found ways to grow quickly based on basic fundamentals, such as loan growth. With more than $17-billion in assets, Canadian Western has focused aggressively over the years on the mid-size commercial lending market in Western Canada, with many of its customers in the oil patch services industry, construction and the trucking business.
Mr. Pollock took over the bank when he was 43, when Canadian Western had a mere $400-million in assets. As a five-year-old bank, it was profitable but was struggling to grow. Since then, analysts credit Canadian Western for punching well above its weight, churning out years of double-digit growth even as the Big Six see those metrics declining. Mr. Pollock notes his bank dipped below double digits in 2009, notching 9-per-cent growth when the economic downturn forced several of his competitors to shrink.
As the incoming CEO, Mr. Fowler, 53, inherits the reins to Canada’s eighth-largest publicly traded bank, which is largely held by institutional investors. More than half of Canadian Western’s shares are owned by institutions. Mr. Fowler, who was given his first job in banking by Mr. Pollock in 1985, when the two worked for Continental Bank, which later became Lloyds Bank Canada, has been with Canadian Western since 1991.
“We do grow aggressively, but we are also very conservative and never bet the farm in how we conduct our business,” Mr. Fowler said. “We want to be creative, we want to be entrepreneurial, but we also want to understand what we are doing.”
While he will have a hard time occupying the corner office as long as his predecessor, he is not planning a short stint as CEO. “I would think for sure 10-plus years,” Mr. Fowler said jokingly. “It all comes down to business model and what your vision and direction is.”
Bank CEOs do tend to stay in their jobs longer than in other industries. The average tenure of the heads of Canada’s six largest banks is approaching nine years, which is longer than the global average of 6.6 years for all CEOs, according to a 2010 Booz and Co. survey of 2,500 of the world’s largest companies.