The search for a new boss to lead Caisse de dépôt et placement du Québec through what promises to be a challenging five years ended up pretty much where it began with the appointment last week of Charles Émond to take over from Michael Sabia.
From the moment Mr. Émond joined the Caisse in early 2019 as the provincial pension fund manager’s de facto second-in-command, the former Bank of Nova Scotia senior executive was seen as the favourite to succeed to Mr. Sabia when his term expired in 2021.
Speculation shifted, however, after Mr. Sabia’s political bosses began vetting potential candidates for the top Caisse job last summer, almost 20 months before Mr. Sabia’s scheduled departure. Rumours circulated that Coalition Avenir Québec Premier François Legault was already preparing to replace Mr. Sabia, who had been appointed by Liberal Jean Charest in 2009, with an external candidate in sync with his interventionist leanings.
By October, media reports suggested the government already had a shortlist of potential replacements, with former Energir Inc. chief executive officer Sophie Brochu and National Bank of Canada CEO Louis Vachon emerging as leading candidates.
Mr. Sabia suddenly announced his departure in November, forcing Mr. Legault and the Caisse board, led by chairman Robert Tessier, to speed up the process. They had to return to the drawing board after Ms. Brochu and Mr. Vachon both denied an interest in the job.
What followed was a frantic search for a new Caisse boss who could hit the ground running once Mr. Sabia moved to his new gig at the University of Toronto’s Munk School of Global Affairs on Feb. 1. Despite considering several external candidates, including former PSP Investments chief André Bourbonnais, the tight timeline favoured a choice from within.
In mid-January, Mr. Legault met with Mr. Émond, Mr. Bourbonnais and Macky Tall, the head of the Caisse’s infrastructure unit, CDPQ Infra. Montreal’s La Presse subsequently reported that the Caisse selection committee had recommended Mr. Tall for the job. Mr. Legault, however, overruled the recommendation and named Mr. Émond instead.
The 47-year-old Mr. Émond’s more extensive financial markets experience sets him apart from Mr. Tall, a 16-year Caisse veteran who oversees construction of the pension fund’s $6.3-billion Montreal light rapid transit project, known as the Réseau express métropolitain (REM). Mr. Sabia had hoped to stay long enough to cut the ribbon on the REM, but construction delays have made it increasingly unlikely that the 67-kilometre LRT will open on schedule in 2021. Moving Mr. Tall would have led to further delays.
That could still happen if Mr. Tall decides to leave the Caisse, having been passed over for the top job. The appointment of a new Caisse CEO has traditionally led to an overhaul of top management at the pension fund manager.
A native of Mali, Mr. Tall would have been the first member of a visible minority to head a major Quebec Crown corporation at a time when Mr. Legault’s government has been accused of stoking anti-immigrant sentiment with a ban on the wearing of religious symbols by certain public-sector employees and a reduction in the annual number of newcomers the province accepts.
However, the fluently bilingual Mr. Émond’s communication skills helped tip the balance. The Caisse job is one of the most high-profile public positions in the province, involving extensive media exposure. Mr. Émond is also far better known in Canadian financial circles, having spent several years climbing the ranks at Scotiabank’s Toronto head office.
Since returning to Montreal, Mr. Émond has maintained an active presence on the city’s charity-ball circuit with his wife, Renée-Claude Boivin. He sits on the board of the Montreal Symphony Orchestra, and last year headed up fundraising in the financial sector for Centraide, the Quebec wing of the United Way. He has the profile of a community leader.
His first order of business as CEO could involve an overhaul of the Caisse’s private equity operations after the sudden departure of the unit’s global head, Stéphane Etroy, in November. The London-based Mr. Etroy was the Caisse’s highest-paid executive in 2018, earning $4.4-million. Since Mr. Etroy’s departure, Mr. Émond has performed double duty as head of domestic and global private equity operations at the Caisse.
The most delicate aspect of Mr. Émond’s new gig could be negotiating the shoals of Quebec politics. While in opposition, Mr. Legault was critical of Mr. Sabia’s decision in 2016 to surrender the Caisse’s stake in Quebec hardware giant Rona Inc. to U.S.-based Lowe’s Cos. Inc. In office, he has vowed to strike a more defensive pose to protect Quebec head offices.
Mr. Émond owes his promotion to Mr. Legault. The latter will not be shy about reminding him of that.