Great-West Lifeco Inc., Winnipeg's largest corporation, announced significant senior management changes, including naming home-grown product Paul Mahon as its new president and CEO.
Mahon, 50, was named to the top position at the Winnipeg company's annual meeting in Winnipeg Thursday. The company also announced that chairman of the board and former CEO, Raymond McFeetors, was stepping down to be replaced by Jeffrey Orr, a director since 2002 and CEO of Power Financial Corp., Great-West Life's parent company.
McFeetors and former CEO Allen Loney will remain on the board.
Unlike his predecessor, Mahon takes the reins of the international financial services company when it is in its strongest financial shape ever. When Loney assumed his role in 2008, it was just as the enormity of the credit crisis was taking root.
"We are in a better economic situation today than in 2008, no doubt about it," Mahon said in an interview Thursday. "Allen (Loney) carried out the role during the most difficult financial crisis Canada has faced for a long time and I have been there beside him. I have seen him provide the company with a strong and stable footing... Allen has brought us into a growth trajectory. We are in great shape."
Speaking at his last annual meeting and analyst conference call as CEO, Loney was clearly pleased that the company is in better shape now.
"The only slight complaint I have," Loney joked, "is that no one warned me that my term as CEO would exactly coincide with the worst financial climate since the 1930s. But the company has weathered the storms and we are back in growth mode."
On Thursday, GWL posted strong first quarter results with revenues increasing across the board and a 15 per cent increase in earnings to $517 million, bettering analysts' forecasts according to a Reuters report.
As of March 31, 2013, the Winnipeg-based financial services holding company had $582 billion in consolidated assets under administration, up $36 billion from December 31, 2012.
Total sales grew by 23 per cent with double-digit increases in Canada, the U.S. and Europe. Its Boston-based Putnam Investments saw sales grow by 28 per cent in the first quarter compared to the same period last year with net outflows of $314 million compared to $2 billion last year.
Total company premiums and deposits were $16.6 billion, up 15 per cent from the first quarter of 2012, reflecting continued strong sales in each of its operating segments.
The company's shares closed up 36 cents to $27.63, two cents shy of its 52-week high.
"Lifeco has weathered the brutal financial conditions of the last five years, I think its fair to say, better than nearly all our competitors," Loney said. "We have emerged stronger financially than ever. We are clearly back in growth mode as evidenced by our strong organic growth in the first quarter results and also as evidenced by our recent acquisition of Irish Life."
On Thursday, Manulife Financial Corp., the largest insurance company in the country, reported a 56 per cent drop in profit in the first quarter.
In February, GWL announced the $1.75-billion purchase of Irish Life, a company that operates across a broad spectrum with strong market share in Ireland, not unlike Great-West Life's presence in the Canadian market.
That deal was quickly financed with the issuance of about $1.25 billion in new equity and debt including the company's first Euro bond offering that was very well received.
That acquisition is expected to add $215 million immediately to the company's bottom line. The deal is expected to close in July.
Mahon, a 27-year veteran with the company, has served as president and chief operation officer of the Canadian operations.
A product of St. Paul's High School and the University of Manitoba, he joined the company right after graduation and worked in marketing with the advisors for two years before joining the head office and has held increasingly senior jobs ever since.
Most of his career has been in the Winnipeg head office, except for a few years in London, Ont., after Great-West Life's acquisition of London Life.
"At the beginning of my career I couldn't have imagined this," Mahon said as well-wishers congratulated him at a reception after the AGM. "But I would say I have seen the outstanding leadership of people like Ray McFeetors and Allen Loney and you can only be inspired by the work they have done and the impact they have had on the company and I want to contribute in the same way."
He said it would be presumptuous of him to talk about putting his own stamp on the company so soon after assuming the corner office.
The company has $600 million in cash and although it hasn't even started digesting the Irish Life acquisition, Mahon said it is always on the lookout for purchases.
"We are always looking to grow from an organic perspective, which means being more competitive with our products and services in any market, winning more clients one at a time and we are always looking for opportunities for acquisitions whenever it makes sense where we can bolster and strengthen the company," Mahon said.
Dave Johnston succeeds Mahon as president and CEO of the Canadian operations of Great-West Life, London Life and Canada Life.