By Nina Trentmann
Finance chiefs are changing jobs again after a slowdown in exits
and recruitment in the spring, as the pandemic is forcing them to
rethink their business models and adding to an already high
Three big public companies this week said their CFO would exit.
General Motors Co.'s Dhivya Suryadevara is joining Stripe Inc.,
while Kelly Kramer, the finance chief of Cisco Systems Inc., plans
to retire. Avis Budget Group Inc. on Thursday said finance chief
John F. North III would exit the company to pursue other
The number of CFO departures at companies in the S&P 500 and
Fortune 500 has crept up in recent weeks following a slowdown in
the spring. Eighty finance chiefs left their positions through Aug.
1, compared with 84 at this point last year, according to the
Crist|Kolder Volatility Report, which tracks recruitment trends in
In total last year, 129 CFOs in the S&P 500 and Fortune 500
left their job, buoyed by a strong stock market that made equity
compensation more attractive.
Now, the frequency of board meetings, investor calls and town
hall sessions has increased since the coronavirus pandemic in March
forced millions of employees to start working from home and
businesses to revisit their operating strategies.
Finance chiefs -- usually the second in command -- have led the
charge, raising billions of dollars in fresh funds, cutting costs
and renegotiating loan covenants, while having to close their
companies' books and motivate their employees remotely.
"CFOs are beginning to see the road ahead for what it is -- long
and uncertain -- and what it will require: flexibility, emotional
intelligence and resilience," said Beau Lambert, a senior client
partner in the financial officer practice at Korn Ferry. "The size
of the task, both practically and emotionally, is large."
Recruiters expect more executive moves in the coming months as
the pandemic and economic downturn continue. In some cases, the
crisis has highlighted that the incumbent might not be the right
fit for the challenge ahead.
Some finance executives are changing their minds after a period
in the spring when many CFOs said they wouldn't leave their
companies, said Shawn Woessner, co-head of the financial officers
practice at Odgers Berndtson, an executive search firm. Paul
Jacobson, finance chief for Delta Air Lines Inc., for example,
called off his retirement in April.
"A lot of CFO movement was stymied because of the economic
uncertainty" at the end of the first quarter and the beginning of
the second, Mr. Woessner said. "But with the market nearly back to
February highs, there is seemingly a greater willingness to look
Executives now are realizing it could take a long time --
perhaps until next summer, or even 2022 -- for their businesses to
recover and that the new normal for many companies will be
different from the environment they operated in before the
That means painful adjustments and restructurings, particularly
in industries that were already in transformation mode before
Covid-19, such as the auto sector or the retail space. Some
businesses might not survive at all.
"This was a very difficult decision," GM's Ms. Suryadevara said
in a post on LinkedIn earlier this week discussing her departure.
The Detroit-based car maker is undergoing deep changes as it looks
to transform its business while fending off competition from
electric-vehicle maker Tesla Inc. and others. "I will be cheering
for the team from the sidelines and I have full confidence that
this team will lead GM into the future," she wrote.
Cisco's Ms. Kramer spent nearly nine years at the network
equipment maker. The company Wednesday said it is planning to
restructure and cut jobs as customer priorities have shifted during
the pandemic. It estimates $900 million before taxes in related
Avis also has been hurt by the pandemic. The Parsippany,
N.J.-based car-rental company is targeting more than $2.5 billion
in cost reductions for the year. It's competitor, Hertz Global
Holdings Inc., filed for bankruptcy protection in May.
"CFOs are rewriting their budgets basically every day; there is
no cadence in this environment," said Peter Crist, chairman of
Crist|Kolder Associates. "They are on all day, every day."
Also, private-equity or venture-backed companies have cash to
splash, and often extend offers that public firms can't match,
recruiters said. Among public companies, technology companies often
have higher share values, making their stock awards more attractive
than those in other sectors. Stripe didn't disclose Ms.
Suryadevara's compensation package, and said it doesn't have any
plans to go public.
Finance chiefs' remuneration, however, hasn't expanded as much
as their remit. CFO compensation hovers at about 35% of what chief
executives at companies in the S&P 500 earn, according to
MyLogIQ, a data provider that analyzed executive pay packages for
the past five years. CFO compensation has crept up, to about $5.1
million in 2019 from $4.3 million in 2015 on average, but CEO pay
has as well, MyLogIQ said.
Mark Maurer and Kristin Broughton contributed to this
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
August 14, 2020 05:44 ET (09:44 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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