Good morning. CFO turnover at major companies continues this year, with Tammy Romo, Southwest Airlines’ EVP and chief financial officer since 2012, planning to retire. However, Southwest didn’t announce a successor for the longtime CFO. Rather, it will begin a search for her replacement.
Romo, who joined Southwest in 1991, will retire on April 1, the company announced on Jan. 9. Over the past 33 years, she has held many leadership roles, such as head of investor relations, controller, treasurer, and SVP of planning.
Romo has worked at the Dallas-based Southwest, considered a pioneer of the low-cost airline model, long enough to have been part of the company’s remarkable growth story. Southwest made its debut on the Fortune 500 list in 1995 at No. 434. It has earned a spot on the list every year since, landing at No. 159 in 2024.
Southwest opting to conduct a search for Romo’s replacement is indicative of what seems like a larger trend. About 1 in 4 of 200 CFOs surveyed indicated that their organizations do not have a formal CFO succession plan to identify and develop internal talent for the role, according to Deloitte’s Q2 2024 CFO Signals survey. And among those that said there isn’t a plan, 28% were from enterprises earning at least $10 billion in revenue. In general, an aspect that can make CFO succession planning challenging is the evolving role of finance chiefs.
Nicolas Owens, industrials equity analyst at Morningstar Research Services, thinks Romo’s retirement is “a routine type of matter,” and she’s giving someone else a shot at the role, he told me.
What type of CFO will Southwest need? “I think the person they hire would certainly benefit from having airline experience, just because of some of the quirks of running the airline business,” Owens told me. That includes accounting for mileage programs and handling the balance sheet, for example, he said.
Staying competitive
Last September, the company announced a three-year transformation plan. For example, Southwest, known for its open seating, will begin selling assigned seats in the second half of the year.
In December 2022, Southwest’s outdated scheduling software couldn’t handle the effects of severe winter weather, leaving crews and planes out of position, which caused massive delays. The company’s plan also includes implementing technology for revenue management, reservations, inventory management, and departure control, in which the CFO would have involvement, Owens said.
The C-suite changes at Southwest, including Romo, and Chief Administration Officer Linda Rutherford, who is also set to retire, follow a battle with activist investor Elliott Investment Management. The hedge fund essentially agreed to a compromise with Southwest, including six new board directors and an earlier retirement for Executive Chairman Gary Kelly, Owens said.
“The transformation is a reasonable approach to address what I think is a competitive problem,” Owens said. Everyone from Delta to low-cost airlines like Frontier are competing with Southwest, which “puts them in a bind,” he explained.
“The CFO or even the CEO, can’t change the competitive landscape, but they can change how they respond,” Owens said.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Scott Anthony, EVP and CFO of Coca‑Cola Consolidated, Inc. (Nasdaq: COKE) will retire effective March 31. Anthony has served as the company’s CFO since 2018. Matthew J. Blickley will assume the role of EVP and CFO, effective April 1. Blickey joined Coca‑Cola Consolidated in 2014 and currently serves as SVP of financial planning and chief accounting officer.
Dawn Phillipson, CFO at Arhaus, Inc. (Nasdaq: ARHS), a lifestyle brand and retailer, is stepping down from her role to pursue another career opportunity outside of the home furnishings industry. An external search for her successor is actively underway.
Big Deal
A new analysis by S&P Global Market Intelligence finds bankruptcy filings made by U.S. companies backed by private equity and venture capital climbed more than 15% to 110 in 2024, the highest annual total on record. (Overall, bankruptcies in the U.S., which includes non-portfolio companies, came in at 694, up 9.3% year over year.)
Of the 110 bankruptcy filings made by private equity and venture capital-backed companies in 2024, more than half were in the consumer discretionary and health care sectors, according to the report. The Chapter 11 filing by H-Food Holdings LLC in Nov. 2024 was among the largest private equity portfolio company bankruptcies during the year.
Jacob Adlerstein, partner at corporate law firm Paul, Weiss, Rifkind, Wharton & Garrison, told S&P Global Market Intelligence that consumer discretionary companies were hit by changing spending patterns as consumers reeled from high inflation. “They're allocating their limited dollars in different ways,” Adlerstein said.
Going deeper
The latest CompTIA Tech Jobs Report finds that the unemployment rate for tech occupations in the U.S. dropped to 2% in December, the lowest point in more than a year. Companies across industries increased tech staffing by 7,000 net new positions, but tech companies shed 6,100 workers—the majority in manufacturing positions, CompTIA told CFO Daily in an email. Help wanted ads for future hiring were down about 8% from November to December, though still totaled 434,000 last month, according to the research.
Overheard
“During the growth phase, the industry structurally transformed and customer exposure to luxury grew substantially. Now is the time for brands to strategically reset to restore desirability, creativity, and exclusivity—the cornerstones of luxury.”
—Rahul Malik, chief growth officer and head of insights at The Business of Fashion, told Fortune in an interview.