At Apple, CFO’s departure leaves big shoes to fill
FORTUNE — Peter Oppenheimer, Apple’s longtime chief financial officer, kept an especially low profile during his tenure. He rarely spoke publicly beyond the company’s quarterly earnings calls, and happily left the spotlight to Steve Jobs, Tim Cook, and other high-profile members of the company’s senior executive team. Even Apple AAPL fanatics would have trouble recognizing him on the street.
That surely won’t be the case this week. On Tuesday, Apple announced Oppenheimer’s plans to retire. His departure will end one of the most remarkable runs by any chief financial officer, which by the job’s very nature is largely behind the scenes and difficult to isolate from the work of other senior executives. Oppenheimer, 51, played a huge role in Apple’s rise, and during the decade he served as the company’s chief financial officer, Apple blossomed into a huge global business with a $160 billion stockpile of cash.
“A tremendous performance,” said Colin Gillis, an analyst with BGC Partners. “I think he deserves to be ranked up there with some of the best CFOs.”
Oppenheimer’s retirement comes at a pivotal moment for Apple, which is feeling the pressure from rivals like Google and Samsung. Growth in sales of Apple’s iconic devices — the iPhone and iPad — is slowing, and investors are clamoring for new blockbuster products to take up the slack.
Of course, ultimate responsibility for day-to-day operations and innovation lies not with the chief financial officer but with chief executive Cook and others on his leadership team. Still, Oppenheimer had formidable sway during an 18-year career that spanned Apple’s near-bankruptcy and its eventual comeback as the world’s most valuable company.
His financial management kept up with and helped to fuel Apple’s astounding growth. During his tenure, annual revenue rose more than 20-fold to $171 billion from just $8 billion. He also engineered many of the complex maneuvers that helped Apple pay minimal taxes on its vast overseas business. Although intensely criticized for using the tax loopholes, he vigorously defended the strategy and, during testimony before a Congressional committee last year with Cook, succeeded in deflecting some of the hostility.
As a member of Apple’s senior executive team, Oppenheimer played a critical role in major decisions. He helped determine the price of new products, manage manufacturing costs, and forecast inventory. Oppenheimer also handled the sensitive job of setting quarterly earnings guidance for Wall Street. (During Apple’s years of rapid growth, that guidance ended up being so conservative that the company routinely beat it, making the exercise largely irrelevant.)
“He was Tim Cook’s right-hand man — one of the key voices in setting strategy and executing on it,” said Nick Araco, chief executive of the CFO Alliance, a networking group of 5,000 finance executives. “This wasn’t just about the finance function but everything that touches the consumer experience and global market.”
In overseeing Apple’s gargantuan cash hoard, Oppenheimer found himself in uncharted territory. No other public company had ever had so much money sitting around. For years, he and his fellow executives clung to the cash, mostly as a rainy day fund. Ultimately, under pressure from investors, including the activist gadfly Carl Icahn, Apple executives loosened the purse strings and embarked on a plan to spend $100 billion on paying dividends and buying back shares, which helps to lift the stock price.
“They use cash very strategically, not in a flashy way in making big acquisitions, but to secure the supply chain for their product,” said Jan Dawson, an analyst with Jackdaw Research. “It’s hard to justify holding onto that huge amount of cash without using it to boost the stock price.”
Oppenheimer oversaw Apple’s internal computer systems and its far-flung office buildings and data centers, and he undoubtedly played an important role in the outsourcing of much of Apple’s manufacturing operations to Asia. (After all, chief financial officers love savings.) Most recently, he led the campaign started by the late co-founder Steve Jobs to build a new futuristic headquarters resembling a spaceship in Cupertino, Calif.
Oppenheimer’s career at Apple started in 1996 as controller for the Americas, a period during which the company was in steep decline. He slowly made his way up through the ranks to become chief financial officer in 2004. Before Apple, he worked in finance at Automatic Data Processing, a payroll services firm, and as a consultant for Coopers & Lybrand. Oppenheimer majored in agricultural business at Cal Poly San Luis Obispo and went on to get an MBA from Santa Clara University.
“I was always believing, and I still do, that I would someday get back to the agriculture side of the business world,” he told the Cal Poly student newspaper seven years ago.
Luca Maestri, Apple’s vice president of finance and controller, will take over as chief financial officer from Oppenheimer. Maestri, who joined Apple last year from Xerox, has extensive international experience following stints at General Motors and Nokia Siemens Networks.
Oppenheimer will formally retire in September to give himself the free time to finish the requirements for a pilot license and to become more involved with his alma mater, among other things. He also recently accepted a seat on the board of Goldman Sachs. Cook stressed that Oppenheimer’s retirement had been planned for some time and that the succession will be smooth. Analysts expect few major changes in how the company manages its finances or to its share buyback program.
“His guidance, leadership and expertise have been instrumental to Apple’s success, not only as our CFO. but also in many areas beyond finance, as he frequently took on additional activities to assist across the company,” Cook said in a statement on Tuesday announcing Oppenheimer’s retirement plans. “His contributions and integrity as our CFO create a new benchmark for public company CFOs.”