UPS (no. 37 on the Fortune 500) announced on Monday that Brian Newman, CFO since 2019, will leave the company on June 1, for medical reasons.

“I am honored to have served as CFO of such a storied company with so many great leaders around the world,” Newman said in a statement. “I am confident in the company’s continued success and growth trajectory. My near-term priority is to focus on my health.”

Before joining UPS, Newman spent 26 years with PepsiCo serving in finance leadership roles such as EVP for PepsiCo’s Global Operations, and launching initiatives like PepsiCo’s global e-commerce business. Newman, a dual citizen of the U.S. and Ireland, began his career as an investment banker working for PaineWebber in New York City.

UPS CEO Carol Tomé said in a statement that Newman has been “a great partner” and helped to guide the company through unprecedented economic conditions. She added that Newman has left the company “well-positioned” as UPS continues to implement its “1+2 strategy,” focusing on sales and profit growth and increasing operating margins.

UPS said in the announcement that they will evaluate internal and external CFO candidates to replace Newman. The new finance chief will become the strategic partner to Tomé, who is a former longtime CFO. Before UPS, she had spent nearly 25 years at Home Depot, where she held the CFO title for 18 years.

Tomé retired as CFO of Home Depot in 2019, keeping the board seat she has held at UPS since 2003. But in 2020 as the pandemic raged, she came out of retirement to run UPS as the first woman CEO in the company’s history. The move gave the company a powerhouse chief executive, who earned a spot on Fortune’s Most Powerful Women list.

During her tenure as CFO at Home Depot, Tomé is credited with helping to deliver a 450% increase in the company’s shareholder value, and guiding the company through the 2008 recession. “I learned that the answer to really all of the strategic questions facing a company can be found by listening,” Tomé told Fortune in 2020. “In my free time, in the evenings, on the weekends, I would put on an apron and work in [Home Depot] stores.”

So Tomé’ will seemingly play a major role in the UPS search for a new CFO. “Having former CFOs on the board is a huge asset whether or not a company needs a new CFO,” Shawn Cole, president and founding partner of Cowen Partners, a C-suite-focused executive search firm, told me. 

But there’s also a potential drawback. “Former CFOs have a habit of emulating themselves,” Cole said. That could be counterproductive if it doesn’t fit the CFO candidate profile the company requires, he said. Having an open mind is key, Cole said. 

Whoever is chosen as the next CFO of UPS will have much work to do. The delivery giant released its first-quarter earnings report on April 23, and the company’s “overall performance was in line with our expectations,” Newman said in a recent LinkedIn post. Revenue was $21.7 billion, down 5.3% compared to the first quarter of 2023. Profits for the quarter were $1.43 per share, down 35% below the same period last year. 

The company narrowly avoided a labor strike last year by brokering a contract that gave UPS workers higher wages and improved working conditions. (In the first quarter of 2023, prior to union negotiations, revenue crossed $100 billion for the first time since its founding.) UPS plans to cut 12,000 mostly management positions. By 2026, the company aims to grow revenue to between $108 million and $114 billion, and an operating margin above 13%. It recently won a significant contract with the U.S. Postal Service. 

“After coming off a difficult market in 2023, the small package industry is poised to return to growth in 2024 and beyond,” Tomé said in a statement in March regarding the company’s strategic initiatives. 

UPS has ambitious financial goals in a turbulent economy, and a highly competitive space, Cole said. In his assessment, the CFO must have “an ambitious personality, be a strong leader, and management, including the CEO, needs to be comfortable with said profile,” he said.

Bringing in a finance chief of another Fortune 50 distributed service business, with a large unionized workforce, who has a strong finance background including financial planning and analysis is “the direction I would go,” Cole added. 

Sheryl Estrada
sheryl.estrada@fortune.com

Upcoming event: Fortune‘s Future of Finance event in New York City will take place on May 16. It’s going to be a unique opportunity to explore with top players how technology is set to transform finance. You can learn more about it and apply to attend here; email FutureFinance@Fortune.com with inquiries.

María Soledad Davila Calero curated the Leaderboard and Overheard sections of today’s newsletter.

Leaderboard

Susan Healy was named EVP and CFO at the casual footwear maker Crocs, Inc. (Nasdaq: CROX), effective June 3. Healy succeeds Anne Mehlman, who was recently appointed president of the Crocs Brand. Healy joins Crocs, Inc. from IAA, Inc., a marketplace for automotive buyers and sellers, where she served as CFO and led the company through its $7 billion merger with Ritchie Bros. Auctioneers Incorporated. Before IAA, Healy served as SVP of finance for Ulta Beauty.

Chris Zych was named CFO at Southern First Bancshares (Nasdaq: SFST), the holding company for Southern First Bank. Most recently, Zych served as director of corporate development and investor relations at United Community Bank. Before that, he worked as manager strategy and management reporting at First Citizens Bank.

Big Deal

Although the pace of U.S. corporate bankruptcies has accelerated since the start of the year, the 210 filings recorded over the first four months of 2024 is marginally lower than the 224 recorded over the same time period in 2023, according to an S&P Global Market Intelligence analysis.

There were 66 new bankruptcy filings in April, up from 61 filings in March. Companies are continuing to feel the burden of high interest rates and may have come to terms with the reality that they will remain higher for longer, according to the report.

Going deeper

How Financial Frictions Hinder Innovation, a new report in Wharton's business review, discusses a recent study that finds financially constrained firms face a trade-off between investing in existing ideas and pursuing new ones. “If you have a revolutionary new product idea, it’s relatively easy to attract investors and scale up,” according to Wharton’s Thomas Winberry, a co-author of the study. “However, if you’re still exploring ideas and don’t have a tangible product to showcase, you’ll need to rely on internal resources or alternative financing sources, which can be harder to come by and more costly.”

Overheard

“What the climate and energy sector is facing with AI is not unlike what we’re facing across the board with AI. It’s extremely complicated, and it’s just a question of, ‘Will the benefits outweigh the harm?’”

—Austin Whitman, CEO of nonprofit The Climate Change Project, told Fortune. AI’s massive appetite for energy is a key issue. The technology will command a huge scaleup in power-generation capacity that is already beginning.