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Power Corp. of Canada POW-T didn’t take Jake Lawrence away from Bank of Nova Scotia BNS-T to simply be the conglomerate’s new chief financial officer.

The hiring Wednesday of Scotia’s head of investment banking – and a contender last year for the top job – is instead part of Power’s strategy to secure its next chief executive officer, as it takes a generational approach to leadership and its investments.

The Desmarais family-controlled financial services company recruited Mr. Lawrence, who is in his late 40s, as a potential successor to its 64-year-old CEO, Jeff Orr, according to two sources involved in the hiring process. The Globe and Mail agreed not to name the sources because they are not permitted to speak for the company.

Two things stand out about Mr. Lawrence’s appointment. First, it signals the future CEO of a Montreal-based company with global reach likely won’t have the last name Desmarais. Contenders for Mr. Orr’s job also include James O’Sullivan, hired in 2020 as CEO of Power-controlled IGM Financial Inc. after running the wealth management arm of Scotia, the sources say.

Second, adding an executive with Mr. Lawrence’s deal-making chops shows the children and grandchildren of empire builder Paul Desmarais, who died in 2013, have ambitions to keep expanding a business that already has $2.7-trillion of assets under administration.

Power’s empire includes insurers Great-West Lifeco GWO-T, Canada Life and Irish Life; asset managers IGM Financial, Mackenzie Investments and Wealthsimple; and alternative asset platforms Sagard – a private equity fund run by Paul Desmarais III – and Power Sustainable, run by Olivier Desmarais, also a third-generation member of the controlling family.

The challenge facing Power’s CEO is one familiar to the head of any large family: how to dole out affection, discipline and cash among offspring, and ensure everyone gets along.

Mr. Orr, Mr. Lawrence and Mr. O’Sullivan proved they can keep the kids in line during their careers at banks.

Mr. Orr ran the investment dealer arm of Bank of Montreal before agreeing to join Power in 2001 as head of Winnipeg-based IGM Financial. He won the top job at Power in 2020, taking over from co-CEO and brothers Andre Desmarais and Paul Desmarais Jr.

The three former bankers are dealmakers, well suited to running a company that grows through acquisitions.

The trio have also proven their chops at breaking down silos within a financial services company. As leaders, they’ve woven headstrong professionals across various divisions into one cohesive team. They’ve also figured out how to allocate capital between competing business.

Mr. Orr’s achievements as CEO include cleaning up what was a complex corporate structure, in part by merging some of the conglomerate’s businesses.

“Power completed numerous transactions that simplified its structure and surfaced value and we think there is likely more to come,” Geoff Kwan, analyst at RBC Capital Markets, said in a report.

The asset management and life insurance sectors are both consolidating around their largest players. Power has the heft and ambition to keep building when others are selling. As CFO, Mr. Lawrence will likely finance massive takeovers.

“We believe today’s announcement is not overly surprising and that Mr. Lawrence brings significant relevant experience to his role as CFO of Power Corp. and Power Financial,” Mr. Kwan said.

Mr. Lawrence is taking a significant cut in compensation to join Power, as Mr. Orr did a generation back. At Scotiabank, Mr. Lawrence made $9.5-million in 2022, and the bank will disclose 2023 compensation next month. The former CFO at Power, Greg Tretiak, earned $5.3-million in 2022. Mr. Tretiak left Power last September for health reasons.

However, being CEO at Power translates into both financial rewards – Mr. Orr earned $13.2-million last year, and holds a $53-million stake in the company – and entry into very rare air. Perks that come with working for the Desmarais family – access to some of Quebec’s finest salmon streams and golf courses – are priceless.

Along with being a financial services market leader in Canada, Power is one of a handful of domestic companies with significant holdings in Europe and Asia. When Mr. Lawrence arrives at the Montreal head office next month and stops staring at one of the country’s most impressive private art collections, he’ll have the opportunity to build one of the world’s largest financial companies.

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