TMX Group Ltd. has named John McKenzie as its new chief executive, opting for an internal candidate and company veteran to replace former CEO Lou Eccleston as the head of Canada’s most important financial markets group.
Mr. McKenzie had been serving as interim CEO after Mr. Eccleston’s abrupt departure in January in the wake of an internal investigation into allegations of sexual harassment.
After a seven-month search, TMX Group, which runs the Toronto Stock Exchange, the Montreal Exchange and the TSX Venture Exchange, among other marketplaces, chose a leader with long-term ties to the organization. The decision is a vote for continuity, analysts say, with Mr. McKenzie having been an important architect of the company’s corporate strategy in recent years.
Mr. McKenzie has been with TMX Group and its predecessor for two decades, spending the past four years as chief financial officer. Other previous roles include include president, CFO and chief operating officer of the Canadian Depository for Securities Ltd., the TMX subsidiary that clears and settles trades. In 2018, Mr. McKenzie took on oversight of TMX’s trust and capital formation businesses.
Mr. McKenzie has also managed a number of major transactions, including TSX Group’s 2008 combination with the Montreal Exchange and 2012 takeover by the Maple Group, according to his company biography. The company declined to make Mr. McKenzie available for an interview.
“As we narrowed our focus on a short list of talented internal and external candidates, it became clear to the board that John’s impressive combination of business savvy, leadership acumen and vision make him the best fit for TMX and the right choice to lead the company,” TMX Group chairman Charles Winograd said in a statement.
As CEO, Mr. McKenzie will play a key role in Canadian capital markets. TMX Group runs the country’s most important platforms for trading and clearing stocks, bonds and derivatives, as well as an international energy trading platform and data business.
His permanent appointment was welcomed by analysts who see him as a steady hand in a time of market upheaval. The choice is “likely to support continued momentum, as we do not expect to see any major disruptions or risks in any major strategic shifts for the company that may have come from an external candidate,” Scotiabank analyst Phil Hardie wrote in a note to clients.
The choice stands in contrast with TMX Group’s last CEO pick in 2014, when the company opted for Mr. Eccleston, an American executive who was relatively unknown in Canadian financial circles at the time. Mr. Eccleston’s history prior to working at TMX Group came back to haunt him last November, when Business Insider published allegations of sexual harassment dating back to his time as an executive at Bloomberg LP in the 1990s.
After the publication of the story, which focused on then-U.S. presidential candidate Michael Bloomberg, TMX Group’s board of directors hired Toronto employment lawyer Janice Rubin to look into the allegations.
After an “expedited but thorough” investigation, Ms. Rubin’s team “found no evidence that Mr. Eccleston engaged in sexual harassment or sexual misconduct while employed at TMX,” the company said in January. Nonetheless, Mr. Eccleston stepped down in mid-January, a year before his contract was set to expire, saying in a statement that his early retirement was “in the best interests of TMX Group, including its employees and stakeholders.”
In January, The Globe and Mail published additional allegations from TMX employees who claimed Mr. Eccleston had bullied colleagues and fostered a toxic work environment. During Ms. Rubin’s investigation, approximately 20 people came forward and reported instances of bullying and toxic behaviour by Mr. Eccleston, two current employees and one former employee told The Globe.
Asked about the allegations, the company said in a statement at the time that it is “committed to creating a collegial culture and treating people with dignity and respect and encourages anyone at TMX with any sort of concerns to voice them. We take all such concerns seriously.”
Since taking the reins as interim CEO, Mr. McKenzie has led the company through a period of extreme turbulence, as the COVID-19 pandemic led to a stock market crash followed by a rapid recovery. The company’s capital formation revenue has withered during the pandemic as hard-hit publicly traded companies shied away from raising additional equity. This was offset by increased revenue from a massive spike in equity and fixed income trading volumes on TMX exchanges.
Overall, the company has performed well throughout the period, analysts say, and its stock price, up 21 per cent this year, has outperformed other Canadian financial services companies.
“Not many companies are delivering that level of [earnings per share] growth with the defensiveness TMX possesses,” National Bank Financial analyst Jaeme Gloyn noted in a June report.
In a note on Monday, Mr. Gloyn said that Mr. McKenzie’s appointment “concludes a somewhat drawn out process (partially due to COVID impacts), and more importantly … reaffirms the continued execution of a strategy that has delivered an impressive track record since 2015.”
Frank DiLiso, TMX Group’s vice-president, corporate finance and administration, will take over from Mr. McKenzie as interim CFO until a permanent successor is appointed.
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