CIBC shakes up leadership to bolster eventual CEO succession, growth strategy

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Canadian Imperial Bank of Commerce CM-T has launched a major leadership shakeup, aimed at developing key senior executives and bolstering the lender’s growth strategy as chief executive officer Victor Dodig and the board set the stage for eventual succession at the country’s fifth-largest bank.

The shuffle in the senior ranks of the bank references the three executives widely considered to be candidates for the role of CEO. Chief financial officer Hratch Panossian is moving to a role in the Canadian banking division, capital markets head Harry Culham’s role is expanded to include new mandates, and Shawn Beber will continue in his current role as head of the U.S. division.

“I look at it as just a natural evolution,” Mr. Dodig said in an interview. “This is a team sport. This is about the baton. Sometimes you hold it on your own for a while, but you hand it over. Sometimes it’s about giving the torch to the next generation. That’s what this is all about.”

Succession at some of Canada’s largest lenders has been thrust into the spotlight as long-time CEOs grapple with the economic downturn and the high interest rates squeezing consumer and business wallets, and regulators crack down on anti-money laundering weaknesses and other threats to the banking system. Questions on the effectiveness of succession planning have swirled since Bank of Nova Scotia stunned Bay Street by taking the rare route of tapping a board member for its CEO seat.

Mr. Dodig has been in the top job at CIBC for nearly a decade, which is the typical tenure for a Canadian bank CEO. But he has no plans to retire any time soon.

“Having started as a teller here, the bank’s particularly dear to me, so I want to do everything to make sure that the bank continues to perform, and we have that deep talent pool so when the board decides what they want to decide, they can make that decision with great comfort,” Mr. Dodig said.

“The job’s not done yet – from my perspective, there’s still more to do. I want to work with the leadership team to make that happen, to reach what I think we can truly reach, because we’re knocking on the door of number one on some of the most important metrics, and I think we can do that together.”

Mr. Panossian rose through the ranks quickly since joining CIBC in 2011, covering roles in finance, treasury, enterprise strategy and corporate development. Prior to joining the bank, he worked in various positions in the financial services and technology sectors. But he has yet to run a major profit-generating line of business.

He will take on the role of senior executive vice-president and head of personal and business banking, reporting directly to both Mr. Dodig and Jon Hountalas, group head of Canadian banking — the lender’s largest revenue-generating machine.

Mr. Hountalas, previously the bank’s head of commercial banking and wealth management, added personal and business banking to his responsibilities in February, 2023, when executive Laura Dottori-Attanasio left the bank to become CEO of Element Fleet Management Corp. The change slotted most of CIBC’s Canadian operations under a single leader.

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As head of capital markets and direct financial services, Mr. Culham takes on an expanded role, adding enterprise strategy and corporate development to his portfolio. These teams previously reported to the CFO.

Since joining CIBC in 2008, Mr. Culham has held roles across capital markets, and recently added the bank’s direct financial services division, as well as overseeing CIBC’s operations in the Caribbean and CIBC Mellon. He has spent most of his career in profit-making businesses, and the change adds oversight of key corporate functions to his résumé.

Mr. Beber, who recently took on his role in 2022, will remain in his position as head of the U.S. region, which has undergone a significant shift since the regional banking crisis in March and slumping valuations in commercial real estate have dragged on earnings across the banking sector. He has overseen both corporate functions and profit-driving businesses at the bank, having previously spent two years as chief risk officer, and has also worked as general counsel.

CIBC treasurer Robert Sedran will assume the role of CFO, joining the bank’s top leadership committee. He has spent more than two decades in financial services, previously leading enterprise strategy and corporate development. Mr. Sedran also covered Canadian bank stocks as an analyst and led equity research.

The bank also made several changes in the ranks of executive and senior vice presidents. The leadership changes take effect on April 1.

Mr. Dodig pitched CIBC as “a bank that’s on the rise” during a presentation to investors in June 2022. The bank increased its target for adjusted return on equity – an industry metric that measures profitability – to 16 per cent. In the first quarter ended January 31, CIBC booked a 13.8 per cent adjusted return on equity, and said that it added 700,000 new clients over the past year.

Under Mr. Dodig’s tenure, the bank has focused on making its retail division more consumer-friendly and growing its U.S. commercial banking and wealth management business. To attract larger portions of its customers’ wallets, CIBC has brought its personal, commercial and wealth teams closer together to boost cross-selling opportunities and referrals between businesses. It has also expanded its lending to early-stage technology companies and developed its no-fee online banking services.

Mr. Dodig said that he is focused on building the bank’s return on equity and achieving its growth targets.

“I think there’s a lot more to do in terms of the financial metrics,” Mr. Dodig said in an interview. “How do we continue to deliver and show the investor base that the investments that we’ve made – which have been significant and on a relative basis more than the others because of our size – and show them that our strategy is working at a new level?”

In the bank’s 2023 proxy circular released Friday, CIBC said that the board had conducted a “comprehensive review and refresh of the experiences and attributes required for future CEO candidates.” The revision of the future CEO’s job qualifications was aimed at making the profile more “forward looking.”

CIBC’s next CEO will need to be savvy in tech and digital platforms, prepared to navigate a stricter regulatory environment, and develop a culture that appeals to customers and employees of a younger, up-and-coming generation, Mr. Dodig said.

“The rise of technology and the intensity of regulation – those have been two of the biggest. Big tech is becoming more formidable. Some of them have encroached in the banking space,” Mr. Dodig said. “And the regulatory temperatures increased globally.”