Morneau Shepell

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Morneau Shepell is a human resources services and technology company headquartered in Toronto, Ontario, Canada. Established in 1966, Morneau Shepell serves approximately 20,000 clients in North America. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI), with market capitalization of $1 billion.

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History

In 1966, Frank Morneau founded W. F. Morneau & Associates, an actuarial and benefit consulting firm. The firm expanded to open its first U.S. office in 1987 and it launched its administrative outsourcing practice in 1996.

W.F. Morneau & Associates merged with Sobeco in 1997 to establish Morneau Sobeco, led by Bill Morneau as president and chief executive officer. Morneau Shepell, as it is known today, was formed in May 2008 through Morneau Sobeco's acquisition of Shepell-fgi - Canada's largest provider of employee health management and workplace training and education services - from Clairvest Group Inc. for $321.9 million.

In the years since, Morneau Shepell has made a number of acquisitions, including SBC Systems Company Inc. (U.S. provider of employee benefits administration systems) in January 2012, Mercer Canada's pension and benefits outsourcing business in November 2012, Ceridian's U.S. health and welfare benefits administration business in August 2015, Montreal-based Solareh (national health and wellness services provider that offers employee assistance programs) in December 2016 and Montreal-based Longpré (employee assistance and wellness program provider) in January 2017.

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Ethics controversy

Bill Morneau, the current finance minister of Canada, resigned from his position as executive chair of Morneau Shepell in October 2015. Since his resignation, Mr. Morneau has been subject to intense scrutiny regarding his holdings in the company, including his use of a blind trust. There have been allegations that Morneau Shepell stands to benefit if the proposed small business taxation legislation is passed. Critics wrongly state that Morneau Shepell would benefit if the proposed changes prompt more people to use individual pension plans. Current revenues from IPPs and RCAs, which Morneau Shepell stopped marketing in 2012, are less than one 25^th of one per cent.

Mr. Morneau has also been criticized for holding shares in Morneau Shepell outside a blind trust, and thus being in a conflict of interest situation with respect to the pension plan changes. In response, Mr. Morneau said that he acted on the recommendation by the Conflict of Interest and Ethics Commissioner Mary Dawson, who stated that shares could remain behind a conflict-of-interest screen overseen by the minister's chief of staff, and that a blind trust was not necessary. The Conflict of Interest Act states "that any such assets, irrespective of their value, must be divested by either the establishment of a blind trust or by way of sale at arm's length." Mr. Morneau responded to the controversy by stating that he sold his remaining shares in Morneau Shepell and donated all of the money he's profited as a result of an increase in the value of share to charity.

It was reported that Mr. Morneau and his father sold Morneau Shepell shares before the tax change announcement in December 2015. Media reports state that Mr. Morneau sold 680,000 shares for proceeds of $10.1 million before December 7, 2015. Subsequently Mr. Morneau is said to have sold an additional 320,000 shares on December 17, 2015, for a profit of $4.5 million, which he donated to charity. It was later reported that Mr. Morneau's father sold 100,000 shares in Morneau Shepell on November 23, 2015 and 100,000 shares in Morneau Shepell on December 3, 2015.

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Leadership

In March 2017, Morneau Shepell announced Alan Torrie's retirement from the company and Stephen Liptrap as his successor to the position of president and chief executive officer, effective May 5, 2017.