Moving For Dollars

While turnover in CFOs, treasurers and controllers at large companies has fallen, the slowdown may be temporary, according to a recent Russell Reynolds Associates study. Among Fortune 500 companies, 2006 CFO turnover was 13%, down from 19% in 2005, while controller and treasurer turnover rates were 13% and 9%, in 2006, down from 18% and 13%, respectively. The study also suggests that the impact of Sarbanes-Oxley as a factor contributing to executive movement may be a thing of the past.

In its place, private-equity activity is emerging as a new major influence, especially affecting changes in the CFO suite. When private equity buys a company, the CFO is often the first to go, notes Christopher Langhoff of Russell Reynolds. He acknowledges that his executive search firm has seen a significant uptick in business thanks to private equity searches for CFOs to lead finance at their portfolio companies. Langhoff reports that anecdotal evidence suggests that the lure of private equity's potential payoff–which usually comes in the form of equity in the company–and the relief from regulatory compliance burdens have proved enticing. Still, private equity is not for every ambitious executive, cautions headhunter Allen Geller of Raines International: "It requires an entrepreneurial spirit. And it often requires people who can work with minimal support–because often what private equity firms do is strip away a lot of layers of management and perqs."