Mark Machin already had one foot out the door of Canada Pension Plan Investment Board when he was forced, under pressure, to resign as chief executive officer last week after receiving a COVID-19 vaccination in the United Arab Emirates.
Before jumping to the front of the vaccine queue, the 54-year-old Mr. Machin had told CPPIB’s board of directors last fall that he planned to leave the country’s largest pension fund in 2021 after five years at the helm, according to sources familiar with his plans.
The succession plan was accelerated once it was reported that Mr. Machin got vaccinated in Dubai. He had permission for some travel, according to sources, and the former CEO told colleagues in an e-mail that he “strictly followed” all travel protocols, but the board did not know he had received his shot.
The Globe and Mail is not naming the sources because they are not authorized to speak for CPPIB and Mr. Machin. CPPIB declined to comment and Mr. Machin did not return a request for comment on the fund’s succession plans and his departure.
The $476-billion manager of most Canadians’ retirement savings planned to announce Mr. Machin’s departure in late May or early June, to coincide with the release of CPPIB’s year-end results. The fund also intended to signal that his successor would be John Graham, a senior managing director responsible for running the CPPIB’s $42-billion portfolio of credit-based investments.
Mr. Graham was widely seen as a top contender in the fund’s succession plan, and he had spent time in Asia as part of a grooming process, according to five sources at CPPIB and close to Mr. Machin.
Mr. Machin planned to leave Canada with his partner to start the next stage of his career, according to former colleagues and friends. The former CPPIB boss split from his wife, entrepreneur Melissa Mowbray-d’Arbela, more than a year ago. She and the couple’s two daughters are based in Hong Kong. While trained as a medical doctor, Mr. Machin spent nearly two decades at Goldman Sachs in Asia prior to joining CPPIB in Hong Kong in 2012.
Timing on succession went out the window when the CPPIB board, led by former McGill University principal Heather Munroe-Blum, discovered last Thursday that Mr. Machin was vaccinated in the UAE in February. While CPPIB’s board was aware of some travel, directors were unaware that Mr. Machin received a vaccination at a time when the vast majority of Canadians are waiting for their shots.
Within hours, the board met virtually with Mr. Machin, who was in Dubai, and he resigned. Mr. Machin and his partner are in the UAE for what the former CEO described as “deeply personal” reasons. In the e-mail to colleagues last Thursday, prior to his resignation, Mr. Machin said: “This trip was intended to be very private and I am disappointed it has become the focus of public attention and expected criticism.”
“I regret any criticism of this extraordinary organization that might come with that,” Mr. Machin said. “I look forward to discussing with you all.” The former CEO never got a chance to have those town hall talks.
In his first note to staff as the new CEO on Friday morning, Mr. Graham wrote, “being part of CPP Investments is about serving a purpose greater than yourself.”
While the board had the option to name Mr. Graham interim CEO, to help distance his appointment from the vaccine issues, time was also of the essence – and a quick, firm decision arguably helped the board avoid a political quagmire.
Last Thursday, prior to the resignation announcement early Friday, a spokesperson for federal Finance Minister Chrystia Freeland said: “While the CPPIB is an independent organization, this is very troubling. The federal government has been clear with Canadians that now is not the time to travel abroad.” Ms. Freeland then called Ms. Munroe-Blum on Friday.
In a public statement announcing Mr. Machin’s departure, Ms. Munroe-Blum stressed the board appreciates that good governance is necessary to keep CPPIB’s operations at arm’s-length from the government. “Leadership is, therefore, fundamental to meeting our objectives on behalf of Canadians and we take that responsibility of leadership very seriously,” she wrote.
Mr. Machin has not commented on how he and his partner obtained vaccines in the UAE – they reportedly received a dose manufactured by Pfizer Inc. and BioNTech, which Dubai makes available free to its own residents.
The former CPPIB and Goldman Sachs executive has strong ties to business leaders in the region and friends said those connections translated into access. In January, a 60-member UAE-sponsored Tour de France cycling team was vaccinated in Abu Dhabi. A spokesperson for CPPIB previously said the fund had no influence in Mr. Machin’s procurement of a vaccine.
Canada’s vaccine rollout trails most Western countries, with approximately 4 per cent of the population receiving at least one dose. The UAE, with a population of 10 million, is among the world’s leaders at getting shots in arms and expects to have half its citizens vaccinated by the end of March.
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