Canadian Imperial Bank of Commerce’s surprise search for a new chief executive officer has come to end, with the lender naming Victor Dodig as its new president and CEO.
Mr. Dodig, currently the bank’s wealth management head, will have relatively little time to prepare for the role as he takes over Sept. 15. By contrast, recent Canadian bank CEO transition periods have ranged from seven to 18 months.
CIBC, currently Canada’s fifth-largest bank, shocked shareholders in April by announcing plans for CEO Gerry McCaughey to retire, news that came out just one year into a new four-year CEO contract. At the time, the board said Mr. McCaughey could stay in his role for up to two years, but he is ultimately leaving just five months later.
From the outset, CIBC chair Charles Sirois said he and the board would cast their search net far and wide, and would ideally interview both internal and external candidates. Of the internal names, Mr. Dodig was up against retail and business banking head David Williamson, who oversees the group that generates roughly 70 per cent of CIBC’s bottom line. Sources say the two men get along, so horrors of past horse races do not apply, but their respective camps didn't want to be outshone.
Although Mr. Dodig is an internal appointment, he joined CIBC from UBS Global Asset Management (Canada), where he ran the Swiss bank’s Canadian wealth management arm. Mr. Dodig was hired by Mr. McCaughey when the outgoing CEO was first putting his stamp on the bank in 2005.
Mr. Dodig’s appointment comes as CIBC stresses the need to expand in wealth management, with the current management team seeking to raise profits from the unit to 15 per cent of the bank’s share, or more. In the last quarter, wealth management generated 12 per cent of CIBC’s bottom line.
In addition to his recent wealth management role, Mr. Dodig has experience on the retail banking side, having run CIBC’s retail distribution and sales team from 2007 to 2011.
Prior to joining UBS, Mr. Dodig was a manager director at Merrill Lynch – where Mr. McCaughey also used to work – and before that, he was a management consultant at McKinsey & Co.
“I feel privileged that the Board has asked me to lead CIBC into the next phase of its growth and development,” Mr. Dodig said in a statement.
The end of the CEO search also finishes the tsunami of speculation sparked by the April announcement, given that CIBC did not immediately name a new CEO. It is rare to see a Canadian bank decline to at least identify the new chief immediately, and the search process set off fears that there would be an internal battle or dogfight that would lead to the loser leaving the bank.
The first news that the bank was looking for a new head also came just a month after CIBC announced that Richard Nesbitt, the current chief operating officer, would retire. Some on Bay Street speculated that he was the next person in line to be chief, but his news of his retirement dramatically altered the playing field.