CFO Turnover Accelerates

CFO turnover reached new heights early this year, in sharp contrast to relatively stable rates for most of 2007. Resignations and retirements were up 15% in January and February from a year earlier, according to data compiled by Liberum Research. Some 110 CFOs resigned or retired in the first two months of this year, up from a total of 95 in 2007. “The pressures that have come to bear on CFOs are tremendous,” notes Susan Rucker, COO of executive services firm Tatum LLC. “Many times, those pressures result in CFOs being so dissatisfied with their jobs that they leave, or [in] CEOs being so dissatisfied with CFOs’ jobs that they force them to leave.”

Of course, CFOs have been under increasing stress since Sarbanes-Oxley required them to certify the accuracy of all financial statements. “When you’re managing a staff of 100 and have operations in 30 countries around the world, the pressures are enormous,” notes Allen Geller, managing director at Raines International in New York. “It’s not just a question of knowing all the pieces; it’s a question of knowing how they all fit together.” Lately, that task has become even more daunting as the downside risks from such trends as the subprime credit crunch, rising commodity prices, a slowing economy and harsher penalties connected to the options backdating scandal have raised the stakes for most senior finance executives.

In February, for example, Sovereign Bancorp said it “terminated” employment of its CFO of three years, Mark McCollom, and replaced him with Kirk Walters from Chittenden Corp., after Sovereign posted a $1.6 billion quarterly loss and cancelled its dividend. Meanwhile, Regions Financial Corp., which reported it was being being questioned by the Securities and Exchange Commission and a $38.5 million charge in the fourth quarter, named Wachovia Corp.’s Irene Esteves to the top finance spot after the hasty resignation of Al Yothers, who wanted to “focus on his family and on ministry opportunities,” according to a press release. At building products maker BlueLinx Holdings, Doug Goforth from Armor Holdings Inc. was named CFO and treasurer, following the abrupt resignation of Lynn Wentworth after a dramatic fourth-quarter loss. And the list goes on and on.

Not all resigning CFOs leave under duress, however. A number of baby boomers are looking to retire after making bundles from sky-high salaries and options over the years. Others are continuing the move to private equity firms, notes Geller, where the compensation is enormous and the stress is less. With fewer transparency requirements and no SOX certification mandates, private equity positions appeal to many financial executives. Sometimes the move is in the other direction when the challenge is appealing: cellular phone maker Motorola Inc. recently named former private equity executive Paul Liska as its new CFO, replacing acting CFO Tom Meredith. Consultants says Liska’s background as a partner in private equity firms will provide a fresh perspective on Motorola’s deteriorating balance sheet.

Article found in Careers, Corporate Finance

Is the Worst of 404 and Other Regs Over? Yes, Say Leading Technology CFOs

A majority of CFOs (53%) at leading technology companies expect costs related to Sarbanes-Oxley compliance to stabilize this year, and they acknowledge that the once loathed Section 404 controls requirements have actually led to improved financial reporting processes (65%), according to BDO Seidman’s 2008 Technology Outlook Survey. Just over a third (35%) said 404 curtailed innovation. “Although technology companies were hesitant to adopt Section 404 of Sarbanes-Oxley, the majority have realized improved processes due to their compliance efforts and do not believe 404 has adversely impacted their level of risk-taking,” said Hank Galligan, a partner in BDO Seidman’s technology practice.

Moreover, the January survey of CFOs at companies with revenues ranging from more than $100 million to $15 billion also found that most finance executives (almost 73%) didn’t think that increased regulations (such as 409A and FAS 132R) “significantly” hurt the ability of their companies to attract and retain talent: Only 27% believe the changes “highly” affected their ability to hire, while 37% called the impact “moderate,” and 36%, categorized it as “low.”

"At a time when regulatory organizations are pushing for more executive compensation disclosure, it is reassuring that CFOs at technology businesses are supportive of shareholders having a greater voice in approving executive compensation levels," said Andy Gibson, a partner in BDO Seidman’s technology practice and co-leader of the firm's national executive compensation practice.

Article found in Careers, Corporate Finance

Careers

Office Depot Inc., the $15 million office supply chain based in Delray Beach, Fla., announced the departure of executive vice president and CFO Patricia A. McKay. The company has appointed international president Charles Brown acting CFO. Brown had been senior vice president of finance and controller before becoming international president. Previously, he was senior vice president and CFO of Denny’s Inc. and vice president and CFO of ARAMARK International. He also served as vice president and controller of Pizza Hut International, a subsidiary of PepsiCo Inc. Office Depot is conducting a search for McKay’s permanent successor.

Dow Jones & Co., the New York-based $1.8 billion publishing company, appointed Stephen Daintith executive vice president and CFO. Daintith came to Dow Jones in September 2005. Previously, he worked for British American Tobacco as finance director in South Africa and Pakistan and managing director in Bangladesh and Switzerland. He also spent time with Forte, the U.K’s Civil Aviation Authority and PricewaterhouseCoopers.

Handleman Co., the Troy, Mich.-based $1.3 billion distributor of manager and distributor of prerecorded music and console video game hardware, software and accessories, has promoted Khaled Haram senior vice president and CFO. Haram, 43, succeeds Thomas Braum, who resigned after a 23-year career with Handleman. Haram joined the company in April 2006 as senior vice president and chief information officer. The next year he headed up Handleman operations in the U.K. Before joining Handleman, Haram spent 10 years with Estee Lauder Cos., in various capacities with increasing responsibility, including vice president for global information systems. By 2001, Haram resigned from Estee Lauder to begin Zalia Cosmetics, where he served as CEO until 2005.

Walter Industries Inc., the $1.3 billion, Tampa, Fla.-based provider of water infrastructure and flow control products, coal and natural gas, home construction, mortgage financing, furnace and foundry coke, chemicals and slag fiber, named vice chairman, secretary and general counsel, Victor P. Patrick, CFO. Patrick, 49, takes over for Joseph J. Troy, who is now overseeing the separation of the company’s Jim Walter Homes financing and homebuilding businesses from the rest of the company. Patrick joined Walter in 2002 as senior vice president and general counsel; four years later, he took on the title of vice chairman. Before joining Walter Industries, he served as deputy general counsel and secretary for Honeywell International Inc. Earlier in his career, he was an attorney with Cleary Gottlieb Steen & Hamilton LLP.

Leap Wireless International Inc., the $1.2 billion provider of wireless communications services based in San Diego, appointed Bill Ingram senior vice president of financial operations and strategy. Ingram brings more than 20 years of experience to his new role. He joins the company from Nuera Communications Inc. (now AudioCodes Inc.), where he most recently served as president and CEO. Prior to Nuera, he assumed the role of chief operating officer of the Clarity Products Division for Pacific Communication Sciences Inc., which later became part of Nuera.

Superior Industries International Inc., the $789 million supplier of aluminum wheels to multiple car manufactures, with headquarters in Van Nuys, Calif., named Erika H. Turner CFO. Turner is replacing acting CFO Emil J. Fanelli. Before coming to Superior, she spent four years with Monograms Systems as vice president of finance and CFO. Prior to Monogram, she assumed the role of CFO for Storage Solutions Group at Quantum Corp. Between 2000 to 2003, Turner served as controller for Rockwell Collins Passenger Systems. She also spent a number of years as division CFO of Arvin Meritor (formerly Rockwell Automotive) as well as CFO at Autospecialty division of TRW. Her career began in 1979 with Deloitte & Touche as manager of audit and special services.

Under Armour Inc., the Baltimore-based $606 million sportswear maker, has promoted vice president of accounting and finance, Brad Dickerson, to the position of CFO. Dickerson, 43, succeeds Wayne Marino, who has been named COO. Dickerson joined the company in July 2004 as corporate controller until he was named vice president of accounting and finance in February 2006. Previously, he served as CFO of Macquarie Aviation North America and, before that, he was CFO of network building and consulting.

Lufkin Industries Inc., the Lufkin, Tex.-based $605 million provider of oilfield pumping units, foundry castings, power transmission products and highway trailers, appointed controller Christopher L. Boone vice president, treasurer and CFO. Boone succeeds Robert D. Leslie, who is retiring. Boone, who has been with Lufkin since 1993, has served as corporate controller since 1999.

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NextPage Turns a Page

NextPage, a leader in compliance and information risk management, has introduced technology that addresses risks associated with the structured and unmanaged data residing at the edge of the enterprise—in hard drives and scattered share drives. The NextPage Information Tracking Platform, which supports the NextPage Document Retention application, tracks and classifies far-flung files, automates information risk enforcement and monitors compliance and facilitates follow-up—all in a secure, password-protected system. “With as much as 80% of a business’s documents residing on individual hard drives, new technology solutions are needed to manage information risk at the network’s edge,” says Darren Lee, NextPage president and CEO. The Draper, Utah-based company is a venture firm backed by Oak Investment Partners and Dominion Partners.

Article found in Risk Management, Tools, Compliance

Channeling Many Flows Into One MetricStream

Governance, risk and compliance (GRC) solution provider MetricStream Inc. has launched an enterprise-wide compliance platform that addresses multiple regulations across decentralized organizations through a common framework. “This release supports decentralized ownership of compliance activities on a federated basis,” says Surya Josyula, MetricStream senior director of marketing.

The new release provides a configurable framework to document processes, risks and controls across multiple areas of compliance. This includes cross-industry mandates and regulations, such as Sarbanes-Oxley, as well as the industry focused regulatory guidelines, such as Basel II and also data retention laws. The documentation flows across diverse silos, providing multi-layered access to information that eliminates redundancy and duplication of activities, processes and recordkeeping, according to Josyula. Dashboards provide aggregated real-time data.

MetricStream has been refining the technology over the past year in cooperation with its partners, Nasdaq and Entergy Corp. Nasdaq, for one, is pleased with the results. “Their professional services organization worked very closely with us to configure the solution to map to our business process flows in a very short amount of time,” says Kathy Steimer, Sarbanes-Oxley program manager at Nasdaq. “It speaks volumes about the configurability and richness of their solution.”