NEW YORK. August 17, 2023 (Reuters) — Chief financial officers are stepping into an increasingly rapidly revolving door. Finance chiefs at companies from Alphabet to Walgreens Boots Alliance are changing roles, moving employers, or quitting at a faster rate than usual this year. Though explanations vary, higher turnover looks here to stay.
Tesla boss Elon Musk last week thanked his “Master of Coin” Zachary Kirkhorn, who is giving up the financial reins he has held since 2019, for his 13 “often difficult years” of service at the electric carmaker. Nestle’s finance chief Francois-Xavier Roger announced in May he was leaving the Swiss consumer giant to pursue new challenges. His replacement is Anna Manz, who moved on from the same position at the London Stock Exchange Group after less than three years.
In the first half of this year, 103 of the top 1,000 companies ranked by Fortune lost their CFO, according to executive search firm Heidrick & Struggles. In the same period a year earlier, the figure was just 79. If the trend persists, one in five companies on the list will replace their CFO this year – the highest proportion in over a decade.
Economic gyrations may be partly to blame. CFOs are grappling with rising inflation and interest rates – in some cases, for the first time in their careers. That’s putting pressure on the bottom line. For companies in the S&P 500 Index, second-quarter earnings blending actual results and analysts’ estimates are down 3.8% year-over-year, according to Refinitiv I/B/E/S. Other duties, from wrangling with uppity investors to shaping strategy, add to the workload.
Some CFOs are climbing the corporate ladder. Alphabet CFO Ruth Porat, who previously held the same position at Morgan Stanley, recently moved up to be the technology giant’s president and chief investment officer. Former Comcast CFO Mike Cavanagh stepped up to president last year and now leads NBCUniversal.
Others are turning their backs on spreadsheets. Of the executives counted in Heidrick & Struggles’ turnover tally almost one in three are retiring. These include FedEx’s Mike Lenz, Unilever’s Graeme Pitkethly and Walt Disney’s Christine McCarthy, a 23-year veteran of the media company, who left in July to spend time with her family. Walgreens’ James Kehoe is moving to the tech industry.
Faster rotation seems here to stay. The average tenure for CFOs in the first half of 2023 was 4.9 years, according to search firm Crist Kolder Associates, down from 5.3 years a decade ago. Over the same period, chief executive officers increased the time they spend in the corner office. High CFO turnover looks far from transitory.
