How TD's money-laundering crisis is making its succession dilemma ‘messy and complicated’
In an earlier era, Toronto-Dominion Bank’s 67-year-old chief executive, Bharat Masrani, would already have stepped aside.
A couple years past the traditional retirement age and almost a decade into his tenure — a threshold that has informally been considered a term limit for Canadian bank CEOs — Masrani instead finds himself in the middle of a major crisis that has made speculation about his fate the buzz of Bay Street.
Succession talk had been in the air even before TD disclosed last August that its anti-money-laundering controls were being probed by authorities in the United States, including the U.S. Department of Justice. The bank is now facing fines that analysts say could top US$2-billion due to the lapses, which according to media reports led to hundreds of millions of dollars in drug money being laundered through TD’s U.S. operations. Additional sanctions or restrictions could be a headwind on growth for years.
The bank’s ultimately fruitless pursuit of U.S. regional bank First Horizon Corp. and a number of senior-level departures appear to have kept Masrani in place through the turmoil of the past few years, and some observers expect the board to keep him in the CEO job until negotiations with multiple U.S. regulatory bodies and the Department of Justice conclude.
But others are predicting changes at the top will come sooner rather than later as expectations for stiff monetary penalties and potentially growth-stalling regulatory orders rise, forcing TD into a decision at a time when its senior ranks have already been depleted.
“Succession at TD (is) kind of like those mushy avocados sitting on my windowsill…. The right time to eat them was quite some time ago,” said Brian Madden, chief investment officer at
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