The mystery of what happened to Mark White, who had been one of the top three individuals in command at Canada’s banking and insurance regulator, has been solved.
Bank of Montreal chief financial officer Tom Flynn sent a note to the bank’s employees Wednesday announcing that Mr. White is joining BMO effective Nov. 1 as senior vice-president of capital management and optimization. The rumour since this summer had been that Mr. White was going to BMO , but all parties involved had remained mum.
Back in June, Julie Dickson, the head of the Office of the Superintendent of Financial Institutions, sent an e-mail to the country’s banks and insurers announcing that Mr. White had accepted a job at a regulated financial institution. (To prevent a conflict, Mr. White vacated his office at the end of June and Ms. Dickson said in her note that “all OSFI employees were instructed today that Mark should not be provided with any non-public information related to any of the financial institutions we regulate and supervise.”)
The reason for his departure, when there is no other obvious heir apparent at OSFI, is still conjecture. But it’s interesting to note that during a speech to the Economic Club in Toronto last month, Ms. Dickson made a plea for authorities to ensure that financial regulators around the world had enough resources to attract and keep good people.
“Supervisors would not tolerate banks operating businesses without the right people, and we cannot accept situations where supervisory agencies themselves do not have the resources they need to oversee such activities efficiently,” she said. “OSFI has fortunately been able to recruit talented resources over the years.”
According to a job posting that OSFI posted on recruiting websites in July, Mr. White’s replacement was being offered a salary between $235,800 and $294,600. “The successful candidate will possess varied and solid experience in the financial services industry and an in-depth understanding of the related business and environmental indicators,” the posting said. The candidate had to be prepared to oversee legislation, steer strategic direction, and be the Canadian representative on international regulatory groups such as the Basel Committee on Banking Supervision. Oh, and they must be “prepared to travel at their own expense” for the job interview.
At the end of its latest fiscal year this March, OSFI had 583 employees. The regulator’s total expenses last year were $108.1-million, and $81.1-million of that went to “human resources.” During Bank of Montreal’s last fiscal year, CEO Bill Downe was awarded total compensation of $9.54-million, including a $1-million salary.
OSFI is competing for talent with the more than 450 banks and insurers and 1,300-plus private pension plans that it is tasked with overseeing - financial bodies that collectively manage trillions of dollar in assets.
Salaries at OSFI have been rising, and Mr. White's compensation at BMO is not known. Regardless, some critics argue that the regulator should be paying more in order to attract Bay Street’s brightest. OSFI is competing for talent with the more than 450 banks and insurers and 1,300-plus private pension plans that it oversees.
The Canadian system is set up so that the majority of OSFI’s funding comes from the financial institutions that it regulates. The amount that each bank, insurer or pension plan pays is essentially determined by how much work they create for the regulator - bigger institutions, and those that land in hot water, pay more. Maybe a fee for poaching an employee from the regulator is in order - Mr. White, who worked at RBC Capital Markets before going to OSFI, is not the first key person that OSFI has lost to a bank.
Mr. White’s job at the regulator has been filled by Mark Zelmer - someone who is highly qualified, but comes from government. Mr. Zelmer came to the regulator from the Bank of Canada.
The central bank’s top job pays between $417,900 and $491,600. The No. 2 person at the central bank earns $292,600 to $344,200. The top job at Royal Bank of Canada, the country’s biggest bank, paid direct compensation of $11-million last year.