What the sudden exit of Spotify’s CFO says about the skills companies want in 2024

Spotify’s CFO Paul Vogel is stepping down from his position. Daniel Ek, founder, CEO, and chairman of the board of Spotify, said, in a public announcement, that Vogel doesn’t have the experience for the company’s “new phase.”

A global leader in audio streaming, the Stockholm—based company announced on Dec. 7 that Vogel will be leaving the company on March 31, and they’ve launched an external search for his successor. Ben Kung, VP of financial planning and analysis (FP&A) will take on expanded responsibilities.

Ek began his statement by explaining that over the last two years, Spotify has worked toward bringing “spending more in line with market expectations while also funding the significant growth opportunities we continue to identify.”

And then, he gave his candid assessment of Vogel’s skills:

“I’ve talked a lot with Paul about the need to balance these two objectives carefully. Over time, we’ve come to the conclusion that Spotify is entering a new phase and needs a CFO with a different mix of experiences. As a result, we’ve decided to part ways.” 

He added: “I am very appreciative of the steady hand Paul has provided in supporting the expansion of our business through a global pandemic and unprecedented economic uncertainty.”

So what does Ek mean by needing “a CFO with a different mix of experiences”? I reached out to Spotify for further clarification. But the company declined to comment further. So I asked Shawn Cole, president and cofounder of Cowen Partners, a national executive search firm, for his assessment.

“Executive change, specifically forced exits and scapegoats, are common given current economic headwinds, a credit crisis, and changing consumer spending habits,” Cole said. “Vogel, like many CFOs named during economic booms, has an investment banker background. During an economic downturn, companies are looking for more traditional operational CFOs, CPAs with a financial reporting background. I suspect this mastery of the day-to-day business is what Ek is referencing when he says ‘a different mix of experiences.’”

Vogel was promoted to CFO at Spotify in January 2020. He previously served as head of investor relations and led the FP&A and treasury teams. Before he joined Spotify in 2016, he had a stint as a CFO at a startup and then some time back on Wall Street.

Ek announced on Dec. 4 a 17% reduction to Spotify’s headcount across the company, roughly 1,500 people, due in part to over-hiring in prior years. (In January, Spotify announced 6% of staff layoffs, and another 2% in June.) He also told his staff there is a need for greater efficiency and to stop doing “work around the work” as Spotify aims to capitalize on its first profitable quarter since 2021, Fortune reported. (Vogel cashed in $9 million worth of stock on Dec. 5.)

What is the archetype of CFO that many companies are currently seeking?

Spotify isn’t alone in its finance chief transition as CFO turnover persists this year amid a macroenvironment. 

“In general, over the last 18 to 24 months, we have seen a real shift away from CFOs with capital markets expertise to favoring those instead with a strong operational bias,” said Jenna Fisher, managing director and head of the CFO practice at the global firm Russell Reynolds Associates (RRA). “While 2021 was the year of the IPO, we have now moved into a more cost-conscious, cost-cutting milieu where analytical and operational excellence are paramount.”

In addition to operational expertise, does Fisher think there are any other skill sets CFOs should enhance going into 2024? “Two things come to mind,” she said. “On the technical side, AI continues to dominate the conversation, and CFOs will be wise to assess what tasks their current teams are engaged in that can be outsourced to AI to make people’s jobs more enjoyable and ultimately more productive.”

Secondly, on the “softer“ side of the equation, “the demand for leadership authenticity has never been more profound,” Fisher said. There is “a relentless demand for C-suite leaders to show up as real human beings, offering empathy and humanity to their teams,” Fisher said. “This is one way to help engender loyalty and to bolster retention,” she said.

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Ewout Steenbergen, EVP and CFO at S&P Global (NYSE: SPGI) has decided to leave the company to pursue another professional opportunity. He will remain until March 2024 to support a transition period. Steenbergen assumed the CFO role in November 2016. He was a core member of the S&P Global leadership team that completed the company's merger with IHS Markit in 2022, and served as president of the engineering solutions division prior to the company's divestiture in May 2023. S&P Global has begun the process of evaluating both internal and external CFO candidates.

Lance A. Berry was named CFO at Artivion, Inc. (NYSE: AORT), a cardiac and vascular surgery company, effective as of Dec. 4. Berry replaces D. Ashley Lee, who will retire at the end of the year. Lee joined the company in 2004. Berry most recently served as the EVP and chief financial and operations officer of Wright Medical Group N.V., until Wright was acquired by Stryker in November 2020. Before that, he served as the SVP, CFO for Wright from 2009 to 2018. 

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Overheard

"What we wanted was a strong but moderating labor market, and that’s what we saw in the November report."

—Robert Frick, an economist at the Navy Federal Credit Union, told the Associated Press regarding the U.S. Labor Department's report released on Dec. 8. In November, U.S. employers added 199,000 jobs. The unemployment rate dropped from 3.9% to 3.7%, not far above a five-decade low of 3.4% in April.