GM Faces Some Tough Choices as It Searches for a New Finance Chief
August 11 2020 - 6:44PM
Dow Jones News
By Nina Trentmann
General Motors Co. faces a variety of challenges as it looks to
recruit a new chief financial officer following the unexpected
departure of incumbent Dhivya Suryadevara.
Chief Executive Mary Barra and GM's board of directors have to
decide whether they want an internal successor -- with deep
automotive and company knowledge -- or an outside candidate,
potentially from the technology sector, recruiters and analysts
said.
GM in recent years has shifted its focus toward electric and
autonomous vehicles and pledged to spend billions of dollars to
expand these businesses. But, it is facing competition from the
likes of Tesla Inc. as well as other U.S. car makers such as Ford
Motor Co. The company is also under pressure to reduce costs and
streamline processes as new vehicle sales lag due to the
coronavirus pandemic and the economic downturn.
The Detroit, Mich.-based auto maker on Tuesday named John
Stapleton, the finance chief of its North America business, as
acting CFO while it is looking for a permanent replacement for Ms.
Suryadevara. She leaves after about two years in the role following
a 15-year career at GM to become the CFO of payments company Stripe
Inc.
GM said it is considering internal and external candidates but
declined to provide additional insights into its CFO search. Mr.
Stapleton, who joined GM in 1990, took on his current role in
January 2014, the company said.
GM could follow the example set by Ford, which last year hired
Tim Stone, a former Snap Inc. and Amazon.com Inc. executive, as its
CFO, said Cathy Logue, head of the chief financial officers'
practice at recruiter Stanton Chase.
"The automotive industry is going through so much change right
now," Ms. Logue said. "I would expect them to opt for someone from
a disruptive industry," she said, adding that that person would
have to have CFO experience.
The GM search comes as more businesses look to bring in external
talent. Nearly 40% of CFOs at S&P 500 and Fortune 500 companies
in 2019 were recruited from outside, up from about 30% in 2018,
according to the Crist|Kolder Volatility Report, which tracks
recruitment trends in corporate leadership.
GM could also consider hiring another female executive or a
person of color, Ms. Logue said, pointing to growing expectations
from the public toward more representative leadership teams at
companies. Ms. Suryadevara was GM's first female CFO when she took
on the job in September 2018.
However, becoming GM's next CFO might not appeal to all
candidates given the size of the task ahead.
The company is still reeling from the effects of two-months-long
factory closures in North America -- it booked a $758 million net
loss for the second quarter -- and will take time to return to its
pre-pandemic financial strength. Apart from vehicles, GM is
producing 30,000 ventilators to fulfill a contract with the U.S.
Department of Health and Human Services by the end of August, a
company spokesman said.
GM's share price, which closed about 2% higher Tuesday at
$28.52, is still trading lower than in 2010 when the company
returned to the public markets. "General Motors cannot compete with
technology companies in terms of stock awards," said David Whiston,
an equity analyst at Morningstar Research Services LLC.
Acting CFO Mr. Stapleton could use his tenure to audition for
the top job if he wants it, Mr. Whiston said. Opting for him or
another internal candidate would mean hiring someone who is
familiar with the complexities of GM's business as well as its
corporate culture, he said.
Both Ms. Barra and departing CFO Ms. Suryadevara rose through
the ranks from within the organization. "There is plenty of good
talent within GM, " Mr. Whiston said. "But going for that might be
seen as just another candidate from inside," he said.
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
August 11, 2020 18:29 ET (22:29 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
General Motors (NYSE:GM)
Historical Stock Chart
From Aug 2024 to Sep 2024
General Motors (NYSE:GM)
Historical Stock Chart
From Sep 2023 to Sep 2024