Companies Extend CFO Responsibilities to Maintain Strong Job Market

Boards are under pressure to get hold of these executives and help their companies tide over a possible slowdown this year or next. This is similar to the early stages of the COVID-19 pandemic in 2020, when Companies ask their CFOs to stay and help navigate the economic impact from the health crisis.

One way to retain finance leaders is to broaden their responsibilities. The CFO is often second or third in command after the chief executive and is responsible for financial but also strategic and operational decisions, for example potential dealmaking, supply-chain matters and information-technology issues.

“Companies create and recognize and inspire these broad roles and titles, which include the Financial Officers Group,” said Joel von Ranson, head of global functional practices at recruitment firm Spencer Stuart. “It is also a reflection of a very competitive and tight CFO market,” said Mr. Vaughan Ranson.

Companies including biopharmaceutical firms

AbbVie Inc.,

consumer goods group

newell brands Inc.

and commercial real estate finance business

Walker and Dunlop Inc.

Have given their CFO the title of president in recent months — which comprises key key parts of the company — or promoted top finance executives into chief operating officer roles.

Russell Reynolds said that about 6% of CFOs of companies in the S&P 500 had additional operational or presidential responsibilities as of June 29. Russell Reynolds said that of those 30 finance chiefs, nine had additional operational duties, two were vice presidents of their company, specializing in specific areas of the business, or chief strategy officers, and 19 were chief executives or presidents of the division. were also. Russell Reynolds said this is up from 2020, when only seven CFOs in the S&P 500, or 1.4%, had added responsibilities. The company does not have data for 2021.

According to Crist Kolder Associates, an executive search firm, CFOs of companies in the S&P 500 and Fortune 500 stay in their jobs for about five years on average, a figure that hasn’t changed much in recent years. Firm’s president Peter Crist said companies need to make sure they engage CFOs so that they are not captivated by outside offers before and after the five-year mark.

“Good CFOs are so valuable that companies spend all day thinking about how do we keep this person in the chair and interested?” They said. These considerations have become more front and center for companies amid the current economic uncertainty, Mr. Crist said.

Newell Brands, owner of Rubbermaid, Sharpie and Elmer’s Gum, said in May that Christopher Peterson would become the company’s president in addition to the CFO. The company said he will continue to lead Newell’s financial operations and oversee its supply chain, procurement, information technology, real estate and global business services. Mr. Peterson CFO in December 2018. joined asBecame interim CEO in June 2019 and named CFO and President of Business Operations in February 2020.

Taking on new responsibilities increased Mr. Peterson’s salary. His basic salary rose to $900,000 a year, up from $835,000 in 2021, Newell Brands said in a filing with securities regulators. Mr. Peterson also received an equity award with a target value of $500,000. The company said the move is “well recognized” of Mr Peterson’s work at Newell Brands, including navigating through supply chain constraints and high inflation.

Illinois-based AbbVie said in late June that it promoted Robert Michaels from CFO to vice president and president. Mr Michael was CFO appointed in October 2018 and added vice president of finance and commercial operations to his position in December last year.

Walker & Dunlop, based in Maryland, promoted Stephen Theobald from chief financial officer in June, a role he has held since April 2013 as executive vice president and chief operating officer. Walker & Dunlop said recent acquisitions and the company’s expansion into new business areas, including commercial real estate data analytics and affordable housing loans and equities, spurred the need for a leadership change. The company said it was a “natural step” to move Mr Theobald to the role of chief operating officer.

According to Alice Bodine, a partner at the recruiting firm, the CFO’s job duties include not only finance, but also operational and strategic responsibilities.

Heydrick and the Struggle,

With thorough oversight of a company’s finances, from mergers and acquisitions to IT and real estate, one acquires comprehensive knowledge of a business, making the role of CFO a natural route to positions such as president, COO and CEO , Ms Bodin said.

Few CFOs are actually moving into the CEO role, even though those changes are relatively rare. toolmaker

Stanley Black & Decker Inc.

Said last month that CFO Donald Allen Jr.

will become chief executive On July 1, followed by James Lowry. Mr Allen, who joined the company in 1999, was named CFO in 2008 and added chairman to his position in 2021. The company said he is “ideally suited” to lead Stanley Black & Decker.

According to Krist Kolder Associates, in 2021, just 8% of CEOs of companies in the S&P 500 and Fortune 500 came from a CFO seat. The firm said that there has been a growth of 6.6% in 2020.

A potential recession could make it more pressing for companies to keep their CFOs, Mr. Vaughan Ranson said. “If there is a change in the economy, it could be a different reason to put a lot of pressure on the CFO market,” he said. “Companies can compete for CFO talent” who can assess how the recession will affect their finances, Mr. Vaughan Ranson said.

write to Jennifer Williams-Alvarez jennifer.williams-alvarez@wsj.com