The flight simulator assembly plant is seen at the CAE facility in Montreal on Jan. 14. Mr. Bromberg will be the first American to lead CAE as CEO in its 78-year history.Ryan Remiorz/The Canadian Press
CAE Inc. CAE-T has named Northrop Grumman Corp. NOC-N executive Matthew Bromberg as its next chief executive officer, pinning its faith in a new leadership team that will also see airline industry veteran Calin Rovinescu expand his role at the pilot training company.
Mr. Bromberg, a former soldier who served as a submarine commander in the U.S. Navy, will be the first American to lead CAE as CEO in its 78-year history. He’ll take over Aug. 13 after the departure of retiring CEO Marc Parent, Montreal-based CAE said in a statement Monday.
Former Air Canada chief executive Calin Rovinescu, named CAE chair in February, will become executive chairman and energy industry executive Sophie Brochu will serve as lead independent director, the company said.
“I really wanted to zero in on someone who had experience in one or the other of aerospace and defence and with Matthew here, we have someone who has had strong exposure and experience to both,” Mr. Rovinescu said in an interview. There’s also “a cultural fit here” with a new CEO who understand that CAE is a global business built from Montreal, he said.
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Mr. Bromberg, who currently leads Northrop Grumman’s global operations as vice-president, has spent two-thirds of his career in commercial aviation but also has a strong military background. Both will be key as airlines deal with heightened geopolitical tension and economic uncertainty while national governments increase their defence spending in the years ahead, Mr. Rovinescu said.
The announcement follows a board shakeup in February that saw four new directors added, including Peter Lee of U.S. investment firm Browning West. Browning is best known in Canada as the firm that led a successful campaign to re-instate the ousted co-founder and CEO of Gildan Activewear Inc., Glenn Chamandy.
Browning West disclosed in December that it had amassed a 4.3-per-cent economic interest in CAE and asked for a formal role in the succession planning, saying the company had the potential to grow profit and free cash flow beyond expectations despite its underperformance over the past five years. An agreement was subsequently struck that gave Mr. Lee a board seat and made him co-chair of the CEO selection committee.
CAE’s new senior leadership team should be able to double the company’s earnings power on a per-share basis over the next three to four years, Browning West chief investment officer Usman Nabi said in an e-mailed statement. “We intend to remain an engaged, constructive and long-term shareholder,” he said.
Before Northrop Grumman, one of the world’s biggest aerospace and defence technology companies, Mr. Bromberg held senior leadership positions at Raytheon Technologies (now RTX Corp.) for some 20 years. Earlier in his career, he worked as an investment banker with Goldman Sachs.
The incoming CEO “ticks the key experience boxes” necessary to lead CAE, National Bank analyst Cameron Doerksen said in a research note Monday. “We believe CAE has a meaningful opportunity to streamline its operations to improve capital efficiency and free cash flow, and we expect this will be a key focus,” the analyst said.
Asked about the choice to hire an American to lead CAE, one of Canada’s largest defence contractors, at a hypersensitive time for Canada-U.S. relations, Mr. Rovinescu said the company is overseen by a board with a majority of Canadian directors, which will ensure its Canadian heritage. The airline industry veteran said one reason he is taking the executive chairman role is to reinforce the fact CAE is a Canadian corporation and will remain so.
Mr. Bromberg “fully respects Canada’s sovereignty” and is honoured to join a company that remains a trusted defence partner for Canada, the U.S. and global allies, Mr. Rovinescu said. He said Mr. Bromberg, 55, will move to Montreal and is committed to learning French.