Royal Bank of Canada Chief Executive Officer Gordon Nixon, who has been in the top spot at Canada’s largest bank since 2001, plans to stay for the “near term,” and said bank CEO tenures are starting to be extended.
“From an overall market perspective, CEO tenure is getting longer as opposed to shorter,” Nixon told reporters in Toronto today. Compared with CEOs in the U.S. that lasted four years to five years in the early 2000s, “the trend is towards longer,” he said.
Nixon, 55, is the longest-reigning CEO among Canada’s six largest banks. He’s said for the last few years that turning 55 is “a good opportunity for me to not only look retrospectively and forward in time and tenure, but also an opportunity for the board of directors to have that option as well because you don’t want a CEO to overextend their welcome.”
Nixon said he hasn’t “heard any footsteps” from Royal Bank’s board about ending his tenure.
“Gord is unusual in the sense that he came into the job at a very young age,” Chairman David O’Brien told reporters. “The board is cognizant of the issue and over the next period of time, which could be several years, clearly things will change.”
Nixon added that it’s a “very interesting time” for the financial services industry because of restructuring and acquisition opportunities going on.
“I’m a great believer in that there’s also sort of a right time and a good time in terms of succession planning and where an organization is in an industry and a cycle and I’m going to try darn hard to pick that time,” Nixon said. “So it’s not going be in the near term; we’ll just have to see.”
Royal Bank also told investors at its annual meeting that the country’s low interest rates may persist for “an extended period,” perhaps the next year and a half to two years. Royal said borrowers have shifted to fixed-rate from variable rate mortgages, though the Canadian housing market has more risks than before.
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