This is not how Donald Guloien wanted to end his run at Manulife Financial Corp.
Like any leader, the chief executive officer at Canada's largest insurer took the top job with a desire to move his company forward. And after eight years at the helm and 36 years at Manulife, Mr. Guloien has a growth strategy in place focused on expanding in China.
But the job of building the business is being handed over to Mr. Guloien's successor, Roy Gori. The 48-year-old is currently head of Asian operations and will take the reins in October, just two years after joining Manulife from Citigroup. The way they measure time in the staid insurance world, that's an executive change playing out at light speed.
Related: Manulife CEO Donald Guloien to retire at end of September
Mr. Guloien's legacy is destined to be a Manulife stock price that went sideways on his watch, underperforming the index and domestic rivals Sun Life Financial Inc. and Great-West Lifeco Inc. by a wide margin. Of late, external factors such as moves in interest rates had a larger impact on Manulife price than the company's financial performance. But no one can be happy with a share price that was about $22 when he took the corner office and is now $23.69, all these years later.
Rather than steering a path towards growth, the CEO's tenure was largely spent keeping the ship afloat. The fallout from the global financial crisis forced Mr. Guloien to devote much of his energy to shoring up the balance sheet and stanching the bleeding from Manulife's exposure to investment products linked to stock market performance, a legacy of the company's blockbuster acquisition of U.S. insurer John Hancock Financial Services Inc. in 2003.
Manulife went into the crisis without fully hedging its massive portfolio, which translated into financial stress for the company. Then the insurer put hedges in place that limited its upside exposure to the subsequent market rally.
In the wake of the crisis, a number of attractive Asian insurance franchises went up for sale. Mr. Guloien didn't have the capital needed to snap up one of these jewels. Regrets, he's got to have a few.
At the age of 60, Mr. Guloien explained in a note to colleagues on Thursday that he has been considering his role since Mr. Gori was named Manulife's president in March. Mr. Guloien wrote: "My conclusion is best summed up with a metaphor: When you are in an Olympic relay race, and you can see that the next person running for your team is Usain Bolt, you do not hesitate … you immediately pass the baton."
"Roy is a very capable leader who passionately cares about customers, innovation and growth; and he is blessed with great energy, instinct and people skills," he added. "He is ready to take the company to the next stages of success."
Mr. Gori takes that baton with deep experience in Asian markets. He ran Citi's wealth managment and insurance operations in the region before joining Manulife's team in Hong Kong two years ago. The native of Australia is the first non-Canadian CEO of an insurer that counts the country's first Prime Minister as its founding president (Sir John A. Macdonald assumed that role at Manulife in 1887).
Insiders at Manulife said the Mr. Gori is expected to start his tenure as CEO with a modernization drive on technology, along with a cold-eyed review of the company's legacy businesses. Internally, there are expectations that Mr. Gori will steal a page from rival insurers such as Sun Life and sell divisions with declining profit margins, redeploying that cash into acquisitions that build on Manulife's most profitable insurance and wealth management businesses.
Mr. Guloien was forced to play defence for most of his time as Manulife's CEO. His successor is expected to go on offence, attempting to build a global business and boost that flagging stock price.
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Andrew Willis