With more CFOs being elevated to CEO, two search experts break down the most common paths to the top job

For example, yesterday, British oil and gas giant BP announced that Murray Auchincloss, CFO since July 2020, and interim CEO since September, was promoted to CEO, effective immediately. Auchincloss’ appointment follows a four-month long search for a chief executive. 

Executive search firm Russell Reynolds Associates (RRA) provides some insight into the trend and shared with Fortune data from an upcoming report. In 2023, 24% of S&P 500 CFOs who changed jobs moved to CEO or president roles. This is slightly down from 33% in 2022, but still significantly higher than 8.8% in 2021, according to RRA. (The report’s authors say that because there was a record amount of CEO turnover in 2022, it created more opportunities for CFOs to get hired for the top job.) 

Looking back at 2023, one of the most notable CFO transitions of the year was Alphabet and Google CFO Ruth Porat taking on the newly created role as president and chief investment officer. However, another trend RRA is seeing is CFOs are taking on divisional CEO roles and chief operating officer (COO) roles along the way to chief executive or president. 

“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,” Jenna Fisher, managing director and head of the CFO practice at RRA told me during an interview in December. 

Meanwhile, the executive search firm Crist Kolder Associates examined CFOs taking on CEO roles at Fortune 500 and S&P 500 firms. The data is based on a sample of approximately 674 companies.

Of the current sitting CEOs in the combined Fortune 500 and S&P 500, 8.4% were promoted to the top chair from the CFO position, up from just 5.8% of CEOs coming from the CFO chair 10 years ago, according to the firm’s 2023 Volatility Report.

The pathway from CFO to CEO is more common in consumer service industries and least common in health care, the firm found. The data shows that external hiring of both CEOs and CFOs is on the rise for the first time since the beginning of the pandemic, Clem Johnson, president of Crist Kolder, told me. The research also pointed to current CEOs being promoted from COO and president roles—50%. 

Block CFO Amrita Ahuja and Macy’s CFO Adrian Mitchell are among the finance chiefs who added the COO title in 2023. And this morning, Target announced that Michael Fiddelke, CFO since Nov. 1, 2019, has been named COO, effective Feb. 4. 

I’ll certainly be watching to see if they eventually make the jump to a CEO role.

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Olivier Leonetti was named EVP and CFO at intelligent power management company Eaton (NYSE: ETN), effective Feb. 5. Leonetti succeeds Thomas B. Okray, who is leaving the company for personal reasons. Leonetti joins Eaton from Johnson Controls, where he served as EVP and CFO. Before joining Johnson Controls in 2020, he served as CFO of Zebra Technologies Corporation and Western Digital Corporation. 

Julie Andrews was named CFO at Orthofix Medical Inc. (Nasdaq: OFIX), a global spine and orthopedics company. Andrews previously served as CFO for Smart Wires Technology. Before that, she was the SVP of global finance for Wright Medical Group. Andrews also held roles at Medtronic Inc. from 1998 to 2012, including serving as VP of finance for the Spine and Biologics division. 

Big deal

The latest S&P Global Market Intelligence report finds there were 370 initial public offerings (IPOs) launched globally in Q4 2023, down from 417 in Q4 2022 and 921 in the same period of 2021. A total of 1,429 IPOs were launched globally last year, which is the lowest number since 2019, according to the report. 

In Q4 2023, there were 26 IPOs launched by U.S. companies, up from 20 launched in the same quarter in 2022, but below the 232 launched in Q4 2021.

Going deeper

"Fortune 500 companies are eliminating chief marketing officer roles as the position loses C-suite clout," by Fortune's Phil Wahba, examines how the total share of CMOs is shrinking. "The fading of marketing’s prominence as an autonomous C-suite discipline is likely partly a result of how few of today’s CEOs have marketing backgrounds themselves," Wahba writes in the report. "Only about 10% of Fortune 250 CEOs have marketing experience, and just 4% have previously held a CMO-like role. In contrast, over 70% of Fortune 100 CEOs have operations or finance backgrounds, the surer pathways to the corner office."

Overheard

"Hope has long had a reputation as a soft emotion, a Pollyanna perspective that everything will turn out just fine if you look at the bright side. But scientists are discovering that there is real power in hope. Higher levels of hope are connected to improved well-being and can help people find meaning and purpose. If leaders care about employee well-being and the success of their firms, they must place rebuilding trust and hope at the top of their strategic agendas."

—Jennifer Moss, an award-winning author and workplace strategist, and Jen Fisher, Deloitte’s U.S. human sustainability leader, write in a new Fortune opinion piece.