On Lou Eccleston’s watch, TMX sold stakes in a number of businesses to focus on running securities exchanges.CARLO ALLEGRI/Reuters
The last time TMX Group Ltd. went looking for a new chief executive officer, six years ago, Canada’s dominant stock-exchange operator searched for seven months before landing a relatively unknown outsider in Lou Eccleston.
This time, the search for Mr. Eccleston’s replacement after his unforeseen retirement on Friday is expected to result in a shorter process that focuses on internal candidates for the top job at the owner of the Toronto Stock Exchange.
The TMX board of directors was already working on succession plans for its 61-year-old CEO, as Mr. Eccleston’s contract was to expire this December. Chair Charles Winograd said in a news release on Friday that the board “is in a position to immediately be in the market to launch a search that will include both internal and external candidates.”
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Front runners include a trio of TMX executives who took on enhanced roles over the past two years, according to sources at the company and connected to its board. These sources were granted anonymity because they are not authorized to speak for the TMX. The insiders predicted a new CEO will be named within three to six months.
Internal candidates are said to include Montreal Exchange head Luc Fortin, who was named global head of trading for TMX in 2018. TMX chief financial officer John McKenzie, who was named interim CEO on Friday, is also in the running. The 19-year TMX veteran previously ran Canadian Depository for Securities, the national equity and fixed-income clearing house. Sources said Jay Rajarathinam, TMX chief technology officer, is also considered a candidate, after being given responsibility last February for the CDS, which is owned by TMX.
Winning the top job would mean a significant raise. Mr. Eccleston’s compensation totalled $4.6-million last year, while the three internal contenders were each paid between $1.1-million and $1.5-million.
There is also expected to be significant interest in the job from former TMX executives and leaders of rival exchanges. The sector is consolidating and TMX, which is effectively controlled by the country’s largest financial institutions, is considered a high-profile, stable place to work. One potential candidate is said to be Kevan Cowan, who left TMX in 2015 and is now CEO at the Capital Markets Authority Implementation Organization, the national-securities regulator.
On Mr. Eccleston’s watch, TMX sold stakes in a number of businesses to focus on running securities exchanges. Its stock has turned in strong performance recently, with the price of TMX shares rising 59.5 per cent in 2019. “We do not see any major disruptions or risks with a leadership transition at this point and would not anticipate any major strategic shifts,” said analyst Phil Hardie at Scotia Capital Inc.
In a report Friday, he said the TMX used its most recent investor day to “showcase leaders across its business lines, demonstrating its bench strength.”
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Andrew Willis