C-suite retreat seen as real risk for B.C.’s economy

Growing number of companies in the province hiring foreign executives to lead from afar

With Hootsuite’s latest hiring of a new chief financial officer, 80% of the Vancouver tech company’s C-suite now lives in the U.S. | Chung Chow

At least seven notable Vancouver firms spent much of the summer on a hiring spree, landing top-level executives with global experience cultivated from sojourns anywhere from Shanghai to London, England.

Ranging from presidents to chief financial officers, the C-suite additions were wins for the West Coast companies that will allow the execs to lead remotely from their homes in the U.S.

For the city, though, the high-profile hirings served as another reminder of Vancouver’s struggle to attract top talent and sizable head offices – a trend one expert says exposes the economy to substantial risk as remote work becomes the norm.

“People have a bit of trepidation when they come into the market,” said Greg D’Avignon, CEO of the Business Council of British Columbia (BCBC).

The BCBC contributed $1.2 million in 2015 to the HQ Vancouver initiative, which sought to attract Asian companies to move their North American offices to the province. D’Avignon chaired the board of the project.

“If [businesses] recruit somebody, say from Germany or from the U.S. or from Europe or South Asia, and it doesn’t work out, there aren’t a lot of other companies to turn to, unlike the case of Seattle,” D’Avignon said, noting that top talent just down the I-5 could bounce between head offices like Microsoft Corp. (Nasdaq:MSFT), Amazon.com Inc. (Nasdaq:AMZN), Starbucks Corp. (Nasdaq:SBUX) or Boeing Co. (NYSE:BA).

Last month, Hootsuite Inc. CEO Tom Keiser, who has lived in San Francisco since joining the tech company in July 2020, hired Boston-based Tiziana Figliolia to take over as chief financial officer following a 19-month vacancy in the post.

One month before that the Vancouver company tapped American Maggie Lower to serve as chief marketing officer. She is based in Chicago.

With chief technology officer Ryan Donovan in Seattle, the only member of Hootsuite’s C-suite based in Vancouver is chief people officer Tara Ataya. That leaves 80% of top-level leadership in the U.S.

The same week as Figliolia’s hiring, startup Appnovation Technologies Inc. recruited Jenny Piggot, who lives in London, England, as chief people officer.

Days later, ElectraMeccanica Vehicles Corp. (Nasdaq:SOLO) promoted Detroit-based chief operating officer Kevin Pavlov to CEO of the Vancouver manufacturer of electric vehicles. He replaced another American, Paul Rivera, who had taken over from former Green Party of BC candidate Jerry Kroll as CEO back in 2019.

The month ended with online education platform Thinkific Labs Inc., which had raised $22 million almost exactly a year earlier, going to Seattle to hire Hootsuite alum Henk Campher as the company’s first chief marketing officer.

And last month, Vancouver investment firm PenderFund Capital Management Ltd. tapped Boston-based Carlo Desierto as its new president, while Burnaby quantum computing stalwart D-Wave Systems Inc. hired Colorado-based John Markovich as chief financial officer.

Meanwhile, Vancouver biotech firm AbCellera Biologics Inc. (Nasdaq:ABCL) hired Neil Berkley as chief business officer back in July.

Going back further, Burnaby’s Ritchie Bros. Auctioneers (TSX:RBA) recruited Philadelphia-based Ann Fandozzi early last year as CEO of the auction giant specializing in heavy equipment. Most of the top execs hired since then reside in the U.S., where nine out of 11 people from the company’s C-suite now also live.

The hiring of a U.S.-based CEO has already resulted in the loss of at least one of Vancouver’s major corporate headquarters recently.

Vision Critical Communications Inc. went to Chicago in late 2019 to hire Ross Wainwright to take over the Vancouver-based data analytics firm. The company immediately moved its headquarters to Toronto and soon thereafter rebranded as Alida Inc.

Residency requirements for senior executives – or lack thereof – might also play a part in government support for programs helping B.C. businesses.

BIV revealed in 2019 that local startup Moj.io Inc., the first company to tap an investment from the $100 million BC Tech Fund, had seen its entire C-suite migrate to Silicon Valley after securing provincial taxpayer dollars.

Meanwhile, the Vancouver-based Digital Technology Supercluster was backed by a $153 million funding commitment from the federal government in fall 2018 with the aim of stoking business collaborations between a broad range of private and public organizations over five years. Members include Vancouver-based companies like Telus Corp. (TSX:T) as well as global giants like Microsoft and Boeing.

Chief operating officer Bill Tam said membership is open to organizations incorporated anywhere in Canada, but they must show that they will contribute to the country’s economy.

“Although we don’t specifically focus on C-Suite residency, we do look at the composition of the consortium, project team and the skills/capabilities that are being brought to a project,” he said in a statement.

“An important part of our evaluation is how the project and consortium will contribute benefits to Canada. This includes considerations for Canadian-made technology innovations, Canadian-based intellectual property, new investment in Canada, jobs for Canadians, skills/training for Canadians and ecosystem benefits to Canada as a result of the project.”

D’Avignon noted that B.C. is home to about 500,000 companies, while all but 1.8% have fewer than 50 workers.

He said relatively high income taxes, speculation taxes on homes and a low Canadian dollar that makes it easier for U.S. companies to gobble up made-in-B.C. intellectual property, have all worked to limit the number of large head offices here as well as the number of foreign executives willing to move here.

“It creates a real risk for B.C.,” D’Avignon said.

“If you’ve got a team that’s working remotely, why do I need to be in a jurisdiction that has high taxes?”