CFO turnover at Fortune 1000 companies has spiked 30% since last year

Everyone wants a CFO.

“There continues to be heightened demand for finance talent,” says Alyse Bodine, a managing partner and global head of Heidrick & Struggles’ financial officers practice. “We’ve seen a lot of turnover in the Fortune 1000.”

I talked with Bodine about the executive recruiting and consulting firm’s latest findings on finance chiefs. During the first six months of 2023 (Jan. 1-July 16) there have been 103 CFO changes in the Fortune 1000, representing a 30% increase when compared to the same period in 2022, where there were 79 changes, according to data shared with Fortune. The firm expects the CFO changes for all of 2023 will surpass the previous three years, according to Bodine.

Of those who’ve moved so far in 2023, 29% retired, and more than a third (37%) took over a new role in the same organization.

“They’ve stepped into president roles or general management roles or have been promoted to CEO,” Bodine says. “They’re taking roles that build upon their foundation as finance executives, but truly are promotions or roles outside of pure finance.” In the last couple of years, Bodine and her team have seen more of a spike in this dynamic, she says.

I can think of some recent examples. Alphabet and Google CFO Ruth Porat is taking on the newly created role as president and chief investment officer, effective Sept. 1. At Occidental Petroleum, Rob Peterson, who served as CFO since April 2020, remains senior vice president of Occidental and was named executive vice president, essential chemistry, of Occidental Chemical Corp. (OxyChem), effective Aug. 9.  He now oversees OxyChem and operational preparedness for the company’s Stratos direct air capture project. And Sunil Mathew, who served as VP of strategic planning at Occidental Petroleum since 2020, was promoted to CFO. 

Meanwhile, 34% of CFOs moved to another organization, according to Heidrick & Struggles. There’s no overarching reason why finance chiefs leave their jobs. Some CFO departures “in part, are just due to timing and career interest, and some of it I would say is still around burnout,” Bodine says.

I’ve recently written about some theories on why Zachary Kirkhorn stepped down from his CFO and “master of coin” position at Tesla, effective Aug. 4. And Uber Technologies announced on Aug. 1 in its Q2 2023 earnings report that its CFO, Nelson Chai, will leave the company on Jan. 5, 2024. Chai joined Uber in 2018 and led the company to an IPO in 2019.

Regarding CFO departures, in general, “we’ve also noticed that some executives just want to do something different,” Bodine says. There have been a lot of private equity deals and some have been sizable, Bodine notes. “Some public company CFOs have transitioned into private-equity backed companies as well,” she says. 

In 2023, so far, 44% of CFOs were externally hired, and out of externally hired CFOs, 40% were first-time finance chiefs, according to the data. There is a “wonderful group of very talented executives,” who maybe haven’t been a CFO at a standalone company, Bodine explains. However, “they have all the tools, resources, skill sets, leadership qualities” that a finance chief at a standalone company has, she says. 

Another interesting data point is more than half (67%) of CFOs hired were from a different industry. “We often find that finance is fungible across industry sectors,” Bodine says. “There are a number of CFOs who have been quite successful transitioning into new industries, and coming up to speed on those business models.” She continues, “anecdotally, I’ve worked with a number of clients who would welcome a fresh perspective.” 

What has Bodine seen regarding companies hiring finance chiefs with a non-traditional background? “There are absolutely executives who maybe don’t have the traditional finance background and who’ve stepped into CFO roles,” she says.

One example that comes to mind is at Chevron Corporation. Eimear P. Bonner, VP and chief technology officer (CTO) at the oil giant, has been appointed the next CFO, effective March 1, 2024. Bonner will succeed Pierre Breber, VP and CFO since 2019, who will retire from Chevron in 2024 after 35 years at the company. The CTO-to-CFO path is “absolutely not” a common one, Shawn Cole, executive recruiter and president of Cowen Partners, recently told me.

But, in general, when it comes to what companies are typically looking for in a CFO nowadays, Bodine shares some insight. “We’ve seen more of a preference for those who do have more of that equal parts strategic and operational finance experience,” she says. “That really has been more the thrust of the engagements that we’ve worked on, and what we’re seeing as it relates to profiles of executives who are being appointed to CFO seats today.”

It will be interesting to see the CFO moves in the remaining months of 2023.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

The State of Compliance Benchmark Report, conducted on behalf of Alloy by Qualtrics, found 60% of fintechs surveyed report paying at least $250,000 in compliance fines. The majority of respondents named lack of automation as a leading barrier to compliance requirements (55%), followed by existing strict regulations (49%), and access to compliance experts (47%).

The report also found larger fintechs were more likely to report higher compliance fines—37% of fintechs with 1,000 or more employees reported paying over $500,000 in compliance fines last year. The findings are based on a survey of more than 200 compliance decision-makers working at financial technology companies in the U.S.

Going deeper

"The Radical Promise of Truly Flexible Work," a new article in Harvard Business Review, explains how companies designed to support neurodivergent and disabled employees show how work can “fit” people—not the other way around.

Leaderboard

Gülsen Kama was named CFO at Bionano Genomics, Inc. (Nasdaq: BNGO), effective Sept. 11. Christopher Stewart, who held the position of CFO since September 2020, will stay on during the transition and then move into an advisory role. Kama was most recently CFO at Northern Data AG. Before that, she was CFO of the East Region and Healthcare IT at Quest Diagnostics. Kama previously held senior leadership roles in finance at organizations, including FedEx, United Airlines, A&P, and AIG.

Paul Carbone was named CFO at Panera Brands Inc., which includes fast-casual and hospitality brand Panera Bread as well as Caribou Coffee and Einstein Bros. Brands, effective Aug. 15. Carbone, a long-time industry executive, spent nine years at Dunkin’ Brands where he was CFO from 2012-2017. Carbone also has been the CFO of YETI Holdings, Inc., and SharkNinja.

Overheard

“I would love for every board out there to demand that the organizations communicate in plain language. Over the 25, 30 years that I’ve done this, I’ve seen how important plain language is in improving customers’ lives, but also improving the organization’s performance.”

—Barbra Kingsley, chair of the Center for Plain Language, a nonprofit that advocates for plain language throughout North America, told Fortune. Kingsley says that when information is "designed and written in plain language, it puts a better face to the organization,” reduces inefficiencies, and helps with branding.