Human Capital

Recruiting CFOs Takes a New Twist

Why the recovering economy means more turnover, and what types of CFOs will get the best new jobs.

By William M. Bulkeley

For the past couple of years, when large companies went hunting for new CFOs they asked headhunters to find flinty-eyed finance specialists. But as CEOs and boards become more convinced that the economy is improving, broader skills are coming into demand, management recruiters say.

“There's a lot of caution, but the mood is shifting to embracing new opportunities,” according to John Wilson, CEO of J.C. Wilson Associates, a San Francisco-based recruiter. “It’s been very much about preservation of cash for the last year or two,” he says. “That’s beginning to change.

The change means that a wider perspective is in demand, says Michele Heid, a Philadelphia-based managing partner for Heidrick & Struggles who specializes in recruiting CFOs and other top financial officers. “There’s been much more emphasis on international,” she says. And hiring companies now often like to find CFOs with operational experience in general management roles as well, not just a pure finance background. “People,” she says, “want the CFOs to be more business and commercial minded.” [For a look at recruitment trends in the UK, read this take on the situation from our sister publication there.]

The Case of AMD

CFOs are often on the short list when companies do succession planning, and operational experience is a must.  The value of a CFO with broad experience became apparent this month when the board of semiconductor-maker Advanced Micro Devices Inc. unexpectedly pushed out CEO Dirk Meyer and named CFO Thomas Seifert as interim CEO. Seifert, who lives in Austin, Texas, asked that he not be considered for the permanent post at the Sunnyvale, Calif., company.  Nonetheless, his resume is the prototype for the very CFO that that so often is in recruiters’ sites today.

Seifert joined AMD in 2009 when it was in the midst of a wrenching turnaround. He had just finished a stint as chief operating officer and finance chief of semiconductor-memory maker Qimonda AG, where he helped spin it out from Infineon AG.  A native German, the 47-year old Seifert also had long experience with Siemens AG and a joint venture between Siemens and IBM.  Research by Heidrick & Struggles shows that in the first half of 2009, 23% of newly named CFOs had been in operational jobs before their promotion, up from 11% in the year earlier period.

If the economy really is on the upswing, it’s likely to bring much more CFO turnover. Richard Jacovitz, research director of Liberum Research, which maintains a database of executive changes, says that as the economy went into its tailspin, companies held onto existing C-level executives, rather than replacing them. While workers get laid off, executives stay. “It’s the opposite of what happens to everyone else. Top executives have remained rather static,” he says.  Data for recent years from Liberum show that CFO turnover at public companies peaked in 2007 when 2,329 CFOs were replaced. The number fell sharply in each of the last three years, dropping to just 1,083 last year, less than half the 2007 level.