The decline is often a period of increased CFO turnover, as this is when companies begin the search to bring in new finance executives early next year, recruiters said. This time, however, recruiters are witnessing higher-than-normal churn among finance officers, which they expect to continue till the end of the year.
For example, in September, companies in the S&P 500 saw the highest number of monthly departures since the beginning of the year, accounting for nearly 20% of 71 CFOs with third-quarter exits, according to Russell Reynolds Associates, an executive search firm. Is. , This compared to 8% in September 2021 and 11% in the same month in 2020, said Russell Reynolds.
As the third-quarter earnings season progresses, economists and executives see a high probability of a slowdown in the months ahead. This is prompting some executives to take a step now before changes in the labor market, recruiters said. He said it is also prompting some companies to prepare for a possible slowdown by looking for CFOs with experience in cost-cutting or restructuring tasks.
Joel von Ranson, who leads global functional practices at recruitment firm Spencer Stuart, which includes the Financial Officers Group, said companies are looking for CFOs with experience in cost management and balance-sheet refinancing as they focus on direction. Struggling for visibility. Economy. He expects these skills, which took on greater importance in the third quarter, to remain a top priority for businesses as they hire new finance leaders.
Retailer Nordstrom Inc., oil-field-services company Baker Hughes Co. and digital financial-services company Alley Financial Inc. were among the companies that recently said their CFOs would be leaving.
Detroit-based Alley Financial said last Tuesday that CFO Jennifer LaClaire was leaving immediately, just a day before it posted its third straight quarter of declining profits, which missed analysts’ estimates for adjusted earnings per share and revenue. Was.
According to a filing with regulators, Ms LaClaire and company agreed to terminate her employment after nearly five years in the role. Steve Flores, a partner at the law firm Winston & Strone LLP, said terminating an executive allows companies to pay the individual a severance package, in contrast to when an executive resigns or is fired.
Ms. LaClair will remain with the company as a Senior Operations Advisor until early March, and will continue to receive a base salary of $750,000 until then. It remains eligible for its 2022 discretionary cash and equity-based incentive-compensation awards. Chief executive Jeffrey Brown said on a recent call with analysts that Ms LaClaire was looking forward to pursuing her next chapter.
Ally Financial declined to comment on their plans. Ms LaClaire did not immediately respond to a request for comment.
“We’ve seen where the pressure is to perform,” said Alice Bodine, partner at recruitment firm Hedrick & Struggles International Inc. And if we don’t have the right leadership team to guide the company, we’re certainly seeing new leadership coming in to guide the business and company in key leadership roles.”
Meanwhile, Nordstrom said last Monday that finance chief Anne Bramman would be leaving in December after more than five years in the role. The Seattle-based retailer has been battling pressures such as weakening consumer spending among buyers at Nordstrom Rack discount chains and higher inventory levels in recent quarters. In August, Nordstrom lowered its annual outlook, saying it expects adjusted earnings per share of between $2.30 and $2.60, well below the $3.20 to $3.50 range.
Nordstrom said Ms Braman decided to leave to pursue the next phase of her career. The company, which has not yet reported third-quarter results, confirmed its financial outlook with a CFO change announcement. Ms Brahman declined to comment.
Last Wednesday, Baker Hughes announced that CFO Brian Worrell is set to step down as the Houston-based company cuts $150 million in costs and increases profits through a restructuring announced last month. Mr Worrell will assume the role of strategic advisor on November 2 and will leave Baker Hughes in the second quarter of next year. Gold producer Newmont Corp.’s CFO Nancy Busey is set to replace her next month.
A company spokesperson said the transition was not a reflection of the company’s finances or earnings performance, instead it was driven by the CFO succession process and the need for the right finance leader for the company’s transformation. Mr. Worrell did not immediately respond to a request for comment.
Overall, CFO turnover in the first three quarters of the year accounted for 14%, according to Russell Reynolds, compared to 16% during the same period in 2021 and 12% in 2020. Recruiters said the slight slowdown comes after a surge in recruitment last year, which during the early days of the pandemic prompted companies to ask their CFOs to stay and help manage the impact of the health crisis.
Meanwhile, CFOs in the early part of the year were more cautious about change due to uncertainties, said Spencer Stuart’s Mr Vaughan Ranson. “This has led to some demand for change, which we are seeing in flux,” he said.
In addition to departing for another role, CFOs are increasingly retiring. According to Russell Reynolds, through the third quarter of this year, retirement—meaning executives are either leaving the workforce altogether or moving exclusively to board roles—account for 52% of CFO departures at companies in the S&P 500. are responsible for. The executive search firm said this compares with 45% during the same period last year and 47% in 2020 and has the highest retirement rate in the past three years during the same three-quarter period.
Russell’s co-chief Jenna Fischer said some CFOs came out of the pandemic looking for their next job, whether it was to join the board, become chief executive officer, serve as a private-equity operating partner or angel. To be an investor. Reynolds practices Global Financial Officer. He said the trend continues, with the slowing economy forcing finance chiefs to think about their next steps.
“Once the CFO got through the first critical tranche of the pandemic, there were a lot of people who just said, ‘You know, I hit my number, this job isn’t fun anymore,'” Ms. Fisher said. “And it continues.”
This story has been published without modification to the text from a wire agency feed