Risk, M&A and IPOs—here’s what mattered to CFOs this week

Every Friday, I sum up the week. But before I do that, I’d like to sum up the year.

I started at Fortune in March when we launched the CFO Daily. Since then, I’ve had the opportunity to interview many CFOs. And for the more than 30 finance chiefs individually featured in a column, I also learned about who they are as people. The insightful discussions I’ve had with industry experts and academics gave me a lot to think about as well. Fortune and Workday’s CFO Collaborative and Emerging CFO virtual events, where panelist analyzed the pressing issues of the day, created a sense of community. From digital transformation to talent management to ESG, along with many other areas now under the CFO’s purview, I’ve enjoyed writing about this important information and sharing it with you. As the holiday season is upon us, today is the last issue of the newsletter until Jan. 3. I look forward to continuing this exciting journey! Thank you for reading.

Now, here’s what happened this week: 

Executive Perspectives on Top Risks for 2022 and 2031, released by Protiviti and NC State University’s Poole College of Management, found board directors and C-suite leaders that were surveyed named pandemic-related government policies and regulation as No. 1 of 10 risks in 2022. But the ability to attract and retain top talent was named the No. 2 top risk for both 2022 and 2031. The key for executives? “Thinking very hard and very systematically about measuring productivity because wage increases don’t have to erode your profit margin if they’re accompanied by productivity increases,” said economist Peter Blair Henry, a W.R. Berkley professor of economics and finance and dean emeritus at NYU Stern School of Business. 

For some companies, the post-IPO period hasn’t exactly been a honeymoon. My colleague Declan Harty offers an analysis in a new report, Half of 2021’s IPOs are suddenly trading below their offering price. “It’s a notable list that stretches across industries, continents, and company sizes,” Declan writes. “Big-name companies like Bumble and Robinhood have fallen below their initial IPO price, while others like Oscar Health and Playtika have, too.” What’s part of the decline? A “a perfect storm of sorts has hit,” he writes. “Inflation has spiked to levels not seen in decades. The Omicron mutation of the COVID-19 virus has reignited a swirl of confusion around the state of the pandemic. And the Federal Reserve has adopted a more hawkish tone, signaling that an interest rate hike may be on the horizon.”

2021 saw the most announcements of U.S. megadeals— transactions of at least $5 billion—ever, according to a new PwC report. However, there was also a significant increase in volume among “not-quite-mega” deals. “Compared with a typical year of about 400 to 500 deals of $500 million to $5 billion in value, more than 900 such transactions were announced in 2021,” the report noted. Will M&A acceleration continue or cool down in 2022? Experts shared their predictions.

CFOs have set their priorities for the coming year. A big one is “Retention, retention, retention,” according to Deloitte’s latest report. In 2022, talent, financial performance, and growth are the top areas of focus. About 97% of CFOs who participated in Deloitte’s Q4 2021 survey agreed that talent/labor costs will increase substantially. CFOs and their organizations are looking at a number of ways to increase retention, said Steve Gallucci, national managing partner of the global and U.S. CFO Program, Deloitte LLP. “We’ve heard some CFOs talk about identifying the next generation of leaders three, five, and 10 years out, and expanding their development programs to prepare them for the next step,” Gallucci said.

Send me an email and let me know what you’re tackling in 2022—and what you’d like to see CFO Daily tackle, too. Enjoy the holidays. Take care.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

Tax professionals are now expected to collaborate across functions, requiring more than just technical tax knowledge, according to KPMG's 2022 Chief Tax Officer Outlook. When considering their company's future growth outlook, 78% of chief tax officers surveyed named regulatory risk (including tax law changes) as the top tax risk over the next three years. Talent risk (52%) came in second. Advances in technology continue to transform how tax functions operate, according to KPMG. And companies are competing for a limited number of high-skilled tax professionals.

Courtesy of KPMG

Going deeper

The EY Global Corporate Reporting Survey includes an analysis of the increased focus on ESG reporting. About 74% of 1,000 CFOs and financial controllers surveyed said the transition to an enhanced reporting model for ESG has accelerated. And 74% would like a globally consistent standard for ESG performance measures to be mandatory. EY noted that 89% of investors the firm also surveyed would like the reporting to be mandatory. For a cohesive ESG approach, CFOs should collaborate and build relationships, according to EY. However, just 48% of the finance leaders surveyed have regular communication with chief sustainability officers about the company’s performance against material environmental metrics, the report found. EY recommends CFOs advance the ESG agenda among C-suite peers, play a central role in helping to meet investors' ESG requirements, and lead innovation across operating models, advanced data analytics, and talent.

Leaderboard

Zrinka Dekic was named CFO, head of strategy and mergers and acquisitions at Genius Brands International, Inc. (NASDAQ: GNUS). The company also recently announced the acquisition of Canada’s WOW! Unlimited Media, Inc. Dekic brings nearly 20 years of entertainment industry and financial markets experience. At The Walt Disney Company, she held posts in corporate strategy, strategic planning and business development. Prior to joining Disney, Dekic served as a VP in the investment management division at Goldman Sachs in New York on the U.S. Fundamental Equity Portfolio Management team. Most recently, she served as VP of Houlihan Lokey’s Investment Banking Technology, Media & Telecom Group.

Jason Harinstein was named CFO at Collectors Holdings, Inc., the parent company of Professional Coin Grading Service, Professional Sports Authenticator, and Wata Games. Prior to joining Collectors, Harinstein served for five years as CFO at Flatiron Health, where he led the company’s financial operations. Flatiron was co-founded by current Collectors CEO and Executive Chairman Nat Turner. Before starting his tenure with Flatiron, Harinstein served as the SVP of corporate development and strategy at Groupon for six years, after having been the director of corporate development at Google.

Mike Morales was named CFO at Vector Laboratories, which provides life science products, effective Dec. 6. Morales has 25 years of experience in financial management and public accounting, with nearly 20 years in the life sciences sector. He joins Vector Laboratories from Sony Biotechnology, a wholly owned subsidiary of Sony, where he led the finance and operations teams. Morales spent almost 16 years at Amgen, where he held positions of increased responsibility at the manufacturing site and corporate headquarters. He has also held positions at Kite Pharma, Avery Dennison, General Motors, and Ernst & Young, LLP. 

John D. Porter was named SVP and CFO at Williams (NYSE:WMB), effective Jan. 1, 2022. Porter will replace John Chandler, who announced his planned retirement from Williams earlier this year. Chandler will serve as a strategic advisor until his retirement date in March 2022. Porter currently serves as Williams VP, chief accounting officer, controller and financial planning and analysis. Porter first joined Williams in 1998 as supervisor of revenue accounting. In 2001, he joined Forest Oil Corporation, serving in various finance and accounting roles. Porter returned to Williams in 2005, serving in roles including director of investor relations and assistant controller of Williams Partners, L.P.

Michael Quartieri was named CFO at Dave & Buster's Entertainment, Inc., (NASDAQ:PLAY), an owner and operator of entertainment and dining venues, Jan. 1, 2022. Quartieri was previously CFO and corporate secretary at LiveOne. Prior to that, he was CFO, treasurer, and corporate secretary at Scientific Games. Quartieri will lead Dave & Buster’s finance, accounting and supply chain organizations, as well as oversee the company’s investor relations function.

Bill Quirk was named CFO at Karius, a blood diagnostic company. Quirk most recently served as CFO at Freenome. His financial experience includes raising capital on Wall Street for leading diagnostics and life sciences tools companies. Quirk spent almost 20 years as analyst at RBC Capital Markets and Piper Sandler, leading the healthcare research team.

Daniella Turenshine was named CFO at FIGS, Inc. (NYSE: FIGS), a direct-to-consumer health care apparel and lifestyle brand, effective Dec. 24, 2021. Current CFO Jeffrey Lawrence has decided to retire. Lawrence joined FIGS in December 2020, coming out of retirement to help lead FIGS’ initial public offering earlier this year. Turenshine joined FIGS in 2018 and led FIGS’ finance team for over two years before Lawrence joined the company. She has continued to serve on FIGS’ senior executive team and as a leader on the finance team. Prior to FIGS, she served as VP at Garnett Station Partners. Turenshine also worked in private equity at Avista Capital Partners and in investment banking at Credit Suisse.

Gary A. Vecchiarelli was named CFO at CleanSpark, Inc. (NASDAQ: CLSK) , a sustainable Bitcoin mining and energy technology company. Vecchiarelli succeeds Lori Love, CFO since September 2019. Vecchiarelli has more than 20 years of technical, operational, and strategic experience in finance and accounting. Vecchiarelli was most recently CFO for Imatrex. Previously, he led finance operations for Golden Entertainment and Galaxy Gaming. During Vecchiarelli’s tenure in public accounting, his clients ranged in size from $50 million to over $1 billion in various industries.

Overheard

"Extreme events are no longer just well-defined occurrences that can be viewed in isolation. Risk should be thought of by businesses as a much larger ecosystem. To respond to this new environment, companies are going to have to think like insurers, considering the variability of risk within communities and the impact those risks can have over the short and long term."

—Scott G. Stephenson, the chairman, president, and CEO of Verisk, writes in an opinion piece for Fortune.