Mark Machin resigns as CEO of Canada Pension After Vaccine Trip

Photographer: Simon Dawson / Bloomberg

Mark Machin stepped down as head of Canada Pension Plan Investment Board after he went to the United Arab Emirates and received a Covid-19 vaccine, challenging the government’s guidance from Justin Trudeau to avoid international travel.

Machin resigned as CEO after discussions with the board on Thursday night, the $ 476 billion ($ 377 billion) pension fund said in a Friday morning statement. John Graham, the fund’s global head of credit investments, has been appointed to replace him as CEO.

Canada’s largest pension fund went into crisis on Thursday night, when the Wall Street Journal reported Machin’s trip to Dubai. He was reprimanded by the finance minister’s office, Chrystia Freeland, who rarely comments on CPPIB issues to protect the fund’s political independence.

While leaving the country is not illegal, Trudeau and his ministers have repeatedly warned residents not to do so and have imposed strict rules to discourage international travel.

It is unclear how Machin, a former Goldman Sachs executive in his 50s, could have arranged to receive the vaccine developed by Pfizer Inc. and BioNTech SE in Dubai, where it is officially available only for people over 60, as well as for people with chronic illnesses or disabilities and frontline workers.

Impatient for vaccines

Machin’s resignation saves Trudeau from a political headache. CPPIB’s top executives report to a board appointed by the government, but the directors are businessmen, including Nutrien Ltd.’s CEO, Chuck Magro, and Royal Bank of Canada President Kathleen Taylor, not political figures.

The government’s policy is to avoid interfering in CPPIB matters. But under the circumstances, Freeland may have had little choice but to speak. Canadians are becoming impatient with the pace of vaccine release, which has been the slowest among the Group of Seven countries except Japan. There is not much public tolerance in Canada for employees caught fleeing the vaccine line or taking trips. discretionary abroad.

“It is not so much that he made a trip to the United Arab Emirates, but that he used his influence as CEO of one of the largest sovereign pension funds in the world to get vaccinated,” said former Finance Minister Joe Oliver in an interview to BNN Bloomberg Television.

“He must act in a way that reflects Canadian values ​​and respects Canadian laws, and using his influence to get vaccinated, he crossed the line and I think the council acted quickly,” said Oliver.

‘Worrying situation’

In selecting Graham to replace Machin, the board chose a low-profile CPPIB veteran who joined the fund in 2008 after a stint at Xerox. He worked on the total management of his portfolio and private investment groups before taking over a team responsible for credit investments.

CPPIB has increasingly invested in private assets – including infrastructure, real estate, private equity and credit – in the belief that they are the best bet in the long run.

”When you look at his resume, you see credit, private markets – that’s a significant part of the future as to where this retirement savings investment process needs to go in order to succeed and generate real net rates of return that they are tall enough, ”said Keith Ambachtsheer, a pension consultant who provided strategic governance, finance and investment advice to Canadian pension funds, including CPPIB.

Freeland spoke with CPPIB President Heather Munroe-Blum on Friday morning “and made it clear that Canadians trust the CPPIB and expect it to be considered to be of a high standard,” said Katherine Cuplinskas, spokesperson. voice of the finance minister.

“Although CPPIB is an independent organization, we are very disappointed with this worrying situation and we support the swift action taken by the Board of Directors,” said Cuplinskas.

The finance department was unaware of Machin’s trip, she said, referring more questions to CPPIB. Munroe-Blum declined to comment via the fund’s press office.