GF: How do you see the status of the US economy in the next 12 months?

Bullard: I think the US economy is in good shape for a soft landing. To me, soft landing means that output grows at the potential growth rate, that the job market is in pretty good balance, and that inflation is moving back toward target and isn’t too far from target. All those things are happening. And you know, GDP growth looks to me like the run rate is maybe between 2 and 2.5 percent for 2024, that’s pretty close to the potential growth rate, or a little above the potential growth rate. Inflation has been coming down toward target, and that’s going to enable the Federal Reserve to get going on the interest rate cuts.

GF: Do you then expect a rate cut in September?

Bullard: The committee was pretty clear at the last meeting and in the chairman’s press conference, that they are ready to go at the September meeting, unless something really dramatic happens. I think, you know, they’re about as clear as you can be for a central bank. I do think they’ll start in September with 25 basis points, and then the question is how fast do they want to move to get back toward a more-or-less restrictive stance of monetary policy, and so even when they lower the policy rate a little bit, the policy rate will still be restrictive. They have to continue to lower from that point. And I think it’s probably 25 basis points per meeting for several meetings in a row, until you can get down to a lower level of the policy rate, and then at that point, you could decide whether inflation is continuing to go to 2% or not, and whether you want to continue to normalize the policy rate.

GF:  You see a cut of 75 basis points between now and December, right?

Bullard: Right.

GF: Do you expect big policy differences depending on who will win the US presidential elections in November?

Bullard: One thing I’ve said about this, is that this election does have a lot of uncertainty around it, because not just the White House is up for grabs in a close election, but also the House of Representatives and the Senate are very close. It’s not clear to me that either party will be able to win all three of those. I think divided government is a distinct possibility for the ultimate outcome. And in the US when there’s divided government, that usually means not too much gets done. And usually financial markets like that outcome. And so, I think that that’s been a factor that’s been driving financial markets during the summer here, but the election could change direction very quickly and either party, I would say, could still sweep. If one party sweeps, it will be able to do more, and probably wants to do more. And so that would be a little bit different.

GF: How do you explain the market crisis we had on August 5^th?

Bullard: I would say that the dramatic sell off in US equities and global equities was partly due to the jobs report in the US. But if you look at that report, it was weak, but it was not that weak. I think what really exacerbated the downturn was events in Japan over the weekend and into Monday morning.

I think the [Bank of Japan] is trying to pull back some on its policy. It’s a very dovish policy that’s been in place for many years and, you know, attitudes have changed in Japan some, where they now think that a too weak yen is maybe counterproductive.

And I think that upset some of the carry trade that has been based on the idea that Japan will never do this.  I think that’s what caused the big sell off, especially in Japan. I think the US jobs report was over interpreted, and then that was all exacerbated by the Bank of Japan.

GF: Why are financial markets so stressed?

Bullard: The geopolitical risk is very serious, and I do think we’re living with the [Gaza and Ukraine] wars going on, but they could easily metastasize into larger conflicts, either one of them, and markets do worry about that and that could be a big risk.

I think also maybe more pedestrian is just that the market is up a lot. The equity market is highly valued in the US and … I think that makes people nervous. They think that, you know, maybe those are overvalued, and the air will come out of that level. So, in that sense, they’re right to worry about that, and right to worry about these great companies, but do we really want to value them as how these were valued?

GF: Are you talking about a company like Nvidia?

Bullard: Nvidia, would be a classic, you know, classic one that went way, way up this year. You know, it’s a great company, and they’ve got a great product, and they’re selling a lot of it, but what’s the right valuation, I think, is the question.

GF: How do you see the global economic landscape beside the US?

Bullard: I would say the global landscape is less rosy than the US, because you’ve got China, which I think is struggling, at least by Chinese standards. China is struggling, not growing as fast as they used to. They’ve got clear fundamental problems in their real estate market, maybe elsewhere, and then Europe, which has not had as much growth as us, and has the war going on in Ukraine and has been more tied to, at least the leading economies have been, more tied directly to China. So China slowing down, it’s very clear more than the US. I would say that for global growth, it’s not as clear that we can get the kind of numbers that we’ve had in recent years. It’s a little bit slower there, and there’s more recession risk there than in the US economy.

GF: Do you expect trade tensions, and the decoupling between China and the US continuing?

Bullard: I think both parties in the US have decided that a more protectionist stance on global trade is something that they want to pursue. One of the hallmarks of the Biden administration was that it didn’t really reverse any of the policies of the Trump administration with respect to trade, and I would expect that to continue going forward.

[The attitude toward global trade] fundamentally, it’s more protectionist. It’s less globalist than it would have been even a few years ago, or certainly during the Reagan-Bush years. And I don’t see that turning around. I think we’re going to have more volatility from that dimension going forward, and I’m a little concerned that you could have markets anticipating a trade war even before one actually occurs because both parties, both political parties are talking about getting tougher on tariffs, maybe not only China, but everyone in the world. That would invite retaliation or threats of retaliation that could lead to a lot of volatility.

Global Finance: You have served at various companies. How much of a CFO’s role is company-specific?

Alan Taylor: The role of CFO has consistent responsibilities across companies. You have a responsibility to help allocate resources in the best way possible. You are the chief resource allocator, and that is a fun responsibility in general. At Weave it has been unique because we’re building something that people really want, addressing a significant need, and the growth has been incredible. Experiencing this growth over the past eight years has been rewarding.

GF: What has been your biggest challenge?

Taylor: The biggest challenge is managing this exceptional growth. Scaling and balancing resources is critical. I’ve made mistakes by under resourcing some groups and over resourcing others and erring on both sides is a problem. People generally respond well to frugality, but there’s a limit. Adequate resourcing is essential to avoid stifling productivity. You’ve got to get people adequate resources; you can’t starve them.

GF: What is the thing you spend most of your time on?

Taylor: As a public company CFO, I focus on reporting earnings and engaging with investors. It involves communicating our story, delivering results and maintaining credibility with investors and analysts, which helps establish us as a trusted investment. You become the face of the organization; you develop a level of credibility that helps the organization to be a trusted ticker symbol.

GF: Is it true that the role of the CFO has become more strategic over the years?

Taylor: Absolutely true. We recently introduced a Strategic Annual Plan Process [STRAP], which is a three-year forecast, updated annually. In the fall, the first year of the plan becomes our annual operating plan for the following year. Although the software industry evolves rapidly, and three years out is a very long time, this forward-looking approach provides valuable direction and helps us remain agile. This kind of strategic planning is essential for our role as CFOs.

GF: How do you see artificial intelligence (AI) affecting your work?

Taylor: AI’s potential is immediately apparent in several areas. It excels at fact-checking and data verification, traditionally the responsibility of CFOs. AI performs these tasks quickly and accurately, improving efficiency. Financial reporting tools like Workiva are integrating AI, enhancing the preparation of documents such as 10-Ks and 10-Qs, incorporating risk factors and issues from other companies.

There are tough aspects that will become clearer in the future. Operationally, AI promises substantial efficiency improvements. Reports indicate a 25%-30% increase in coding efficiency for product development teams. The finance team must drive the planning process to realize these efficiencies.

GF: What keeps you up at night?

Taylor: Security and phishing. As the allocator of resources, protecting them is vital. Ransomware attacks and system hacks pose existential risks, threatening customer trust and operational integrity.

GF: What advice do you have for aspiring CFOs?

Taylor: At the end of the day, the key thing you take with you from different job experiences are the relationships. Our CEO Brett White often says, “Be kind to people, be tough on the business,” and that is a critical attribute. Caring about people and supporting their success is essential, especially for finance staff. As a CFO, the most valuable resource is people, and they must be treated with respect and consideration. I’m the chief resource allocator, and the best resource you have in any business is the people. You have to care about them.

With the acquisition, century-old Paramount gets a younger owner, much-needed cash and most likely a profitable streaming service.

Hold on and rewind. Is this not something that was already announced? Headlines of a potential deal have gone on for months with fits and starts in a Succession-style saga. David Ellison, the son of software giant Oracle, Larry Ellison, emerged as the auction winner.

Ellison’s relatively small media empire, Skydance, is famous for several Tom Cruise movies. The firm, with its partners, will buy National Amusement for $2.4 billion cash. With National Amusement will come its much-prized controlling stake in Paramount Global.

In the second step of the deal, Skydance will merge with Paramount, offering $4.5 billion in cash or stock to shareholders and providing an extra $1.5 billion to its balance sheet.  For the Ellison family, this sets David up to become one of the most influential executives in the industry.

But the deal is much more than yet another passage of hands for a blazoned media company. Paramount Global has controlling stakes in CBS, Nickelodeon, MTV, and of course in Paramount Pictures. Its library of more than 1,000 movies includes blockbusters and Oscar winners such as “The Godfather,” “Titanic” and “Forrest Gump.”

Yet, Paramount continues to falter at the box office and struggles to adapt to the streaming era.

The challenge will be for David Ellison to make Paramount profitable again, above and beyond the already announced cost-cutting plans and sales of non-core assets.

In an interview with the Financial Times, Ellison admitted that Paramount needs to move fast to adapt to the technological shifts that are disrupting Hollywood. “We recognize the transition that the broader industry is going through,” said Ellison. “In order to effectively navigate this transition, what is required for Paramount as a pure-play media company is to transition to becoming a media and technology company.” Paramount, however, is still in a “go shop” period, allowing other bidders such as Apollo, Warner Bros. or IAC chair Barry Diller to attempt a better offer.    

In the past decade, leaving aside the Covid-19-induced recession, Spain’s economy has performed better than the European average. The year 2024 looks to be no different; Spanish GDP is expected to expand to double the average in the euro area: between 1.9% and 2.1%, according to different estimates, versus a range of 0.8% to 1% for its peers. And this is likely to remain true in 2025 as well.

“Things are going great, but the engines of growth are being exhausted.” says Miguel Cardoso, chief economist for Spain at BBVA Research.

A generous fiscal policy, which has helped support the economic expansion, is expected to turn more restrictive soon. Productivity growth remains anemic, and the cost of labor is rising faster in Spain than elsewhere in the region. A dearth of reasonably priced homes only adds to the strain caused by higher inflation and social security costs. Meanwhile, the solid export numbers that turned the current account positive, after decades in the red, are likely to take a hit due to weaker demand from Spain’s European neighbors.

The reforms that followed the financial 2008-2009 crisis fixed the banking system, spurring a multitude of acquisitions that has sharply reduced the number of institutions and made the industry more stable, says Juan Dolado, professor of economics at Carlos III University in the Madrid’s greater metropolitan area. After a decade of restructuring, Spanish banks are showing record profits.

“The issue now is that they have extra profit, if anything,” says Dolado, noting the controversial 4.8 % tax the government has imposed on revenue from interest and fees at the largest Spanish banks.

In May, Banco Bilbao Vizcaya Argentaria (BBVA) launched a hostile €12.23 billion bid over smaller rival Banco de Sabadell. The aim is to create a lender with more than 100 customers and assets above €1 trillion—second only to Santander in Spain. After the drastic consolidation that reduced the number of Spanish lenders to 10 from 55 before the 2007-2008 global financial crisis, the Spanish government opposed this deal saying that such a merger could be harmful to customers and jobs.

If banks are more solid today, private lending remains subdued, with limited demand in a climate of low private investment.

 “We are struggling to understand the weakness of investment ourselves,” says Oriol Carrera Baquer, senior economist at Caixabank, although this could change with lower interest rates and a pickup in manufacturing across Europe.

“Firms have postponed investment decisions,” says Francisco Quintana, director of investment strategy at ING in Madrid, and lower rates could prompt them to make their move in the coming months. Another factor is the €120 billion in EU recovery funds that Spain is expected to receive.

“In total, Spain is going to get 10% of its GDP, and the execution is halfway through, with a likely acceleration this year and next,” Quintana says.

More fundamental changes are highlighted by Spain’s shift from a traditionally in-the-red current account, thanks to energy imports, along with a positive trend powered by tourism—around 15% of GDP—and new export categories including automobiles and services.

BBVAs Cardoso notes that services like IT, translations and aspects of consultancy are acquiring a larger presence, suggesting that Spain’s export surge is less dependent than it was previously on the whims of its European neighbors.

“We do not know much about where our exports of services go,” says Cardoso. “We know that quite a bit goes toward Europe, but also another bit goes to the US and Latin America. Those might be related to Spanish firms providing services to their subsidiaries, but they might also be related to high value-added services that were produced in the US. Given the appreciation of the dollar against the euro and the higher growth of wages, it has become more profitable to produce those services from Spain.”

Prospects are bright for investment banking, as well, say some close observers. Despite a dip in the total value of deals, the market for mergers and acquisitions in Spain remained relatively strong last year, according to Barcelona-based law firm Cuatrecasas.

Cuatrecasas expects a slight increase in M&A activity in 2024, assuming interest rates stabilize, the gap between sellers’ and buyers’ valuation of target companies narrows, and banks retain their “considerable amount of dry powder.”

“Strategic sectors will remain dominant,” a recent Cuatrecasas report predicted. “Investors will continue to opt for and be active in strategic sectors, particularly in the technology and energy sectors (probably focusing on renewable energies).”

Renewable energy is “the jewel of the crown,” says ING’s Quintana, and the list of 2023 deals is substantial. Canadian asset manager Brookfield bought the 50% of Spanish renewable energy company X-elio that it still did not own from the US buyout fund KKR for €1.8 billion. French fund Antin launched an €866 million bid for Opdenergy. Amazon reported €670 million of new investments in renewables, while Spanish utility Iberdrola sold a 49% stake in its portfolio of 1,200 megawatts of green energy to Norges Bank for €600 million.

EU budget requirements for member states are still under discussion, but Spain, whose 2023 deficit was around 3.6% of GDP, is expected to tighten up its public spending.

Some economists are pushing structural reforms aimed at improving the country’s productivity by boosting education and creating a less fragmented job market, for example. But political uncertainty remains a nagging problem.

In Madrid’s latest show of volatility, Prime Minister Pedro Sanchez announced that he was stepping down last month, but then, after five days of street demonstrations and statements of support from political allies, he announced he would remain in office. Behind the high drama is a degree of political paralysis that some observers find more disturbing.

“But I don’t think [Sanchez’s about-face] is really that meaningful for the evolution of the economy,” says Caixabank’s Carrera. “Right now, we have a Parliament that is very divided and polarized. This means that it is hard to push forward meaningful structural reforms. And this is what matters.”

Global Finance: You’ve been in the CFO role at Ternium for over 14 years. What has been your most significant challenge?

Pablo Brizzio: One challenging period was in 2009 when Venezuela, under Hugo Chavez’s leadership, nationalized Sidor, a Ternium unit. Negotiating a compensation deal was arduous, but ultimately, we secured around $2 billion. It was a success considering the circumstances, and the process was quite complex. Not every company manages to obtain compensation in such situations.

GF: Did the fact that you are Argentine helped in this process?

Brizzio: In Latin America we are able to navigate through different governments and different ways of doing things, and this helps you to prepare well for the uncertainties and the changes that can happen in the market. Unfortunately, we are used to these swings in ways government interact with companies.

GF: Have there been any recent challenges?

Brizzio: Certainly, our growth through acquisitions—particularly the recent one in Brazil where we increased our stake in the country’s largest steel company, Usiminas—has presented challenges. Since our inception, Ternium expanded from Argentina to Mexico, Brazil, Colombia and the US. Integrating operations across diverse locations while adhering to different regulations and NYSE listing rules has been demanding. Consolidation is a common trend in the steel industry, and with Usiminas we’re working to integrate it into Ternium due to our majority voting rights.

GF: How crucial is the CFO’s role in consolidation processes?

Brizzio: The CFO plays a vital role, as these processes involve extensive interaction across various sectors of the company. We are tasked with both internal and external responsibilities, from core operations to relationships with stakeholders like investors, regulators and customers. Compliance requirements are substantial and are increasingly integrated into the company’s strategy, making the CFO’s voice significant. Operating from Luxembourg and being listed on the NYSE means adhering to different standards, and emerging issues like ESG further emphasize our role.

GF: Regarding ESG, do you lean toward the European or US approaches?

Brizzio: Both regions have different approaches, but ultimately our focus, particularly in the steel sector, is on the decarbonization process due to our production methods. We have set decarbonization targets and are actively working toward them. However, full decarbonization in our sector remains a challenge due to technological limitations. It’s crucial to establish common ground among stakeholders and develop measurable metrics for progress.

GF: What is the single thing you spend the most of your time and energy focusing on these days?

Brizzio: The consolidation of Usiminas. We have 25% of the total shares but we have 50% of the voting share, so we can nominate the people to the board. This process has many requirements to fulfill.

GF: What advice would you give to someone aspiring to become a CFO?

Brizzio: The role of CFO encompasses various aspects, from finance and accounting to investor relations and stakeholder management. Exposure to different parts of the company and external stakeholders is essential for career development. While the role has evolved beyond traditional finance functions, having a well-rounded skill set and adaptability are key attributes for success in this dynamic role.

Global Finance: What are the most important aspects of being a CFO in the BPO industry?

Anusha Ramraj: The strategic role of a CFO has grown in importance in every industry. The CFO needs to own the numbers by guiding and communicating with stakeholders. Explicitly in BPO, strategic planning is vital and involves aligning financial goals with vendor selection, contract negotiations and pricing structures. Managing cash flow is crucial—as is risk management, considering the diverse geographies, data and compliance requirements of CCI. Mitigating risks like fines, penalties and currency fluctuations is essential, especially for global operations.

GF: Labor quality is crucial across various industries, especially in Business Process Outsourcing, where services rely heavily on workers. What distinguishes your labor pool, and how does it benefit your clients?

Ramraj: We focus on impact sourcing, and partner with CareerBox Africa, a not-for-profit organization. Here, we identify and provide unique training and job opportunities to young candidates from disadvantaged backgrounds in Africa, placing them into contact-center digital jobs and focusing on black and female empowerment. In South Africa, for instance, nearly 80% of our employees are black, with 76% to 78% of them being female. With an emphasis on diversity and inclusion, our focus is to not only empower women who may face barriers to workforce entry but also enrich the communities where they reside.

GF: What keeps you up at night?

Ramraj: Compliance. It’s not that I’m noncompliant; I ensure full compliance. Maintaining operational continuity is crucial. As a CFO, while overseeing the financial well-being of the business, navigating through increased governance, regulations and compliance in an ever-changing global environment is paramount. Ensuring ongoing compliance is imperative, as any lapse could have a significant impact on the business. CCI is multinational across sub-Saharan Africa—we are on 17 contact center sites across the continent at this point, and this comes with its own compliance challenges.

GF: How important are environmental, social, and governance [ESG] goals for your company?

Ramraj: Our ESG framework is centered around our “CCI Cares” initiatives, with several areas of focus. These include our commitment to the environment through sustainability projects covering reforestation in Africa, such as our “One Job One Tree” project; measuring emission footprints; promoting carpooling for employees due to the impact on the environment; the implementation of better-quality water; recycling; working toward green contact-center buildings and other solar initiatives. But most importantly, we are committed to African society—supporting various community projects, for example, and improving schools by providing better water, sanitation, equipment, training and food programs.

GF: What is your economic outlook of Africa?

Ramraj: Africa faces many challenges but it also offers numerous opportunities in sectors such as infrastructure, mining, natural resources, education and finance. Africa is one of the largest continents, with the youngest population, and its youth population is an incredible resource. Before investing, companies must conduct thorough research to understand the business environment and potential opportunities. CFOs play a crucial role in shaping this reality through investment considerations and decisions.

Global Finance: What kept you busy during the four years since you have been CFO at CNH?

Oddone Incisa: During the early months of the Covid pandemic, our main priority was maintaining operations. As I adapted to my new position, attention shifted to managing supply chain constraints, ensuring our plants had adequate resources to meet the growing customer demand. Today, my role encompasses so much more, and my commitment lies in analyzing the long-term evolution of both demand and our products.

GF: And nowadays, what keeps you busy?

Incisa: We are currently revising our cost basis and, as a result, we must make some difficult decisions. It’s crucial to transparently communicate the reasons behind these actions to our team and to approach them with rationality. Cost reductions must be executed with precision. This entails avoiding cuts in areas critical for future growth, as doing so could undermine our long-term prospects.

GF: What keeps you up at night?

Incisa: I’m always thinking about the growth of the company—how to fuel growth and how to make sure that my team is prepared to support and facilitate this growth.

GF: How important is for you to have a top team, and what do you do to get it?

Incisa: It’s about picking the right people for the right roles, rotating junior staff in different positions, and training. But also having a succession plan. There are a few people who could step into my job if needed. Of course, no two individuals are entirely alike, and I would not want to work with a copy of myself. But I believe that more than one person could effectively step in and replace me. We have some great talent.

GF: What would you suggest to a young professional who is interested in being a CFO?

Incisa: I recommend that you immerse yourself in various aspects of finance. Gain a deep understanding of the nitty-gritty details and be able to comprehend the implications of your actions. Having experience in accounting and treasury is crucial, as is familiarity with FP&A (data and analytics), or controlling. Additionally, I believe that job rotation in finance is highly valuable to build a broader skill set and grow professionally.

GF: As a European working at a multinational company with a strong US presence, you likely have first-hand experience with the differing perceptions of environmental, social and governance factors between the two continents. Can you share your insights on this contrast?

Incisa: As ESG is increasingly becoming a divisive topic, companies must strike a delicate balance, given the diverse range of customers and stakeholders they serve. Our primary focus should be on aligning shareholder interest with stakeholder objectives. Fostering a corporate culture that embraces good governance, diversity and inclusion, and environmental and social responsibility is paramount. It’s crucial to be mindful of the societal impact of our actions. We are a recognized leader in our industry for our ESG efforts. We never make decisions based exclusively on ESG drivers but try to align them with our company goals.

CFOs worldwide are migrating between firms, occupying their position for shorter periods, and switching jobs at an unprecedented rate. The reasons vary, but collectively reflect the challenges associated with a role that is increasing in complexity, gaining in strategic significance, and often commanding higher compensation. Technology is a factor in reshaping the position, contributing to the rise of fractional CFOs who divide their time among several companies.

The role is also increasingly stressful, especially when a company is undergoing corporate restructuring or the CFO’s perspective does not align with that of other executives.

High interest rates and debt dependency have added to the stress in recent years.

“The main reason for fewer and smaller bankruptcies or ‘distressed situations’ is the fact that a significant portion of the debt behind private equity–owned companies was provided by nonbank lenders, which are more willing than traditional banks to amend, extend, or refinance with other forms of capital, e.g., preferred equity,” says Joseph Esteves, head of private equity at consultancy SGS Maine Pointe. “This ‘kick the can down the road’ type of financing activity raises the level of financial burden and complexity for financial officers.”

Then there is the stress and uncertainty of dealmaking, as when Elon Musk was taking Twitter private and remaking it as X. “The past six months have pulled on every mental muscle I’ve developed in 48 years,” Ned Segal, CFO of what was then Twitter, commented on the platform after Musk took the company private and promptly fired him along with a handful of other executives.

But success can also be a factor pushing a CFO into a new role, whether more prominent, or at a larger company, or for increased compensation. A recent example is energy company BP’s promotion of Murray Auchincloss from CFO to CEO in mid-January.

One common denominator in these scenarios is greater complexity for the CFO, a trend that has been apparent for several years. “When I started years ago, if you were a CFO, you were primarily focused on accounting and debt structure,” says Gina Gutzeit, senior managing director at FTI Consulting’s Office of the CFO Solutions practice. “Now, CFOs have a broader and more prominent role within the C-suite, carrying significantly more responsibilities.”

In its 2024 Global CFO Report released in January, FTI finds 61% of CFOs agreeing that the average tenure for a CFO at a single company is less than five years; this is down from 66% a year earlier. Company size plays a noticeable role in influencing CFO tenure, FTI finds, since the complexity of the CFO role becomes more pronounced as companies grow. Among respondents from companies with revenue exceeding $1 billion, 68% say that CFO tenure is under five years, whereas only 44% of respondents from companies under $100 million in revenue agree.

The FTI survey—which gathered 377 responses in total from North America; Europe, the Middle East, and Africa (EMEA); the Asia-Pacific (APAC) region; and Australia—found roughly the same trend worldwide. In EMEA, three-quarters of CFOs agreed that CFO tenure at a single employer is under five years. This perspective is shared by 63% of CFOs In APAC and 60% of those in North America, the study finds, a clear majority across regions.

Proximity to power makes a difference as well. Randall Peterson, professor of organizational behavior at London Business School, notes that the CFO and CEO are frequently the only two executives on the company board. He says this contributes to the swift transfer of power to the CFO when a CEO departs, a trend particularly notable in the EMEA regions.

“I did a study on how the FTSE 350 Index boards changed over the last 20 years in terms of composition,” says Peterson. “The UK changed its rules in favor of having more nonexecutive voices and giving boards more independence. Of course, they still needed the CFO and obviously the CEO. And this principle was adopted little by little by the other countries, so that the CFO is the best-known executive within the board besides the CEO.”

The CFO also has the shortest average tenure among C-suite executives at about 3.5 years, according to a 2023 study of 2,056 US companies by software development firm Datarails. In comparison, the CEO averages about 3.9 years, the chief technology officer (CTO) 4.6 years, chief marketing officer 4.6 years, and general counsel 4.5 years. Despite the shorter tenure, the CFO is well paid, with an average overall compensation in Datarails’ sample of $3.5 million, behind only the CEO ($10.4 million) and CTO ($3.8 million), in 2021—flagged by the study as the worst year for CFO attrition during the period analyzed, from 2016 to 2021.

“We engage in transformation projects with C-suite executives, and approximately 80% of our projects involve a CFO transition, with either a new CFO, an interim CFO or a change in CFO,” says Esteves. “We witness this evolution firsthand, noting a frequent shift in the responsibilities and dynamics of the CFO role.”

Because their role gives them an early view of trouble on the horizon, CFOs are often first to jump ship when a company faces problems—such as a debt burden becoming unmanageable. “CFOs possess comprehensive insight into the debt structure, capital arrangement and overall financial well-being of the companies they oversee,” Esteves notes. “They personally grasp the implications of these factors on the company’s financial health. Until the debt structure is rectified, they find it challenging to envision a favorable outlook. These individuals, known for their savvy intelligence, are opting for departures.”

Esteves also sees the growing demands of the role creating a new skills shortage. “The CFO position has evolved into a strategic enabler of value creation, with changing responsibilities,” says Esteves, adding there is a “notable skill gap in the industry’s current landscape” in this regard.

With competition for top-quality candidates fierce, the best can command premium. “CFOs are in a good spot right now, and they have been for some years,” says Alan Numsuwan, executive vice president in FTI’s CFO Solutions practice. “And when you’re in high demand, you generally can leverage that demand to find something that meets your criteria.”

Companies should have a plan for when the CFO moves on: “If the turnover is less than five years, then a board or a company should be considering what their succession plan is,” Gutzeit advises. “What is the talent that sits around the CFO? What does the organization that reports to the CFO look like? There should be more awareness and preparedness.”

These plans should encompass the entire CFO team, not just the CFO specifically, says Numsuwan: “The company should have an eye toward making sure there are plans in place across the finance function so that in the event of a departure, there is a plan in place that goes with looking at one or two levels down.”

For small or startup companies, a fractional CFO can be a great solution, says Sunny Khosla, founder of business-development firm Coin Masters, who serves as fractional CFO for three different companies. In the end, he argues, CFOs “are supporting the company, and our expense line item is one of the first things to look at.”

A technology shift in recent years has provided easier access to talent, making the fractional CFO a more feasible proposition, he notes. “It has given access to a much larger talent pool, and AI [artificial intelligence] and automation tools made this possible. I have seen a lot of outsourcing of local bookkeepers and the implementation of AI to get bookkeeping with automation.”

Global Finance: What makes for a good software CFO?

Kathy Wagner: In the software industry, historically, profit margins have been significantly higher than in sectors such as manufacturing. There’s often a temptation to grow rapidly without due consideration for profitability balance. This trend is evident across the industry, with numerous software companies resorting to substantial layoffs. While the software sector benefits from generous margins, the current macroeconomic environment emphasizes the importance for CFOs to prioritize sustainable and profitable growth. It appears that the era of extravagant valuations may be a thing of the past.

GF: What are the parameters you are looking at?

Wagner: Some companies may have overhired in the past. For instance, when making substantial investments and hiring numerous salespeople, it’s crucial to assess if the yield per representative remains consistent. If there’s a decline, it might be necessary to reconsider the hiring strategy. Similarly, when expanding the finance team, questions about efficiency arise—whether it’s essential to hire one finance person for every 100 new employees or if there are more efficient alternatives. As a CFO, challenging peers and distinguishing between wants and needs is part of the role. At times, it requires being the pragmatic voice in the room.

GF: How is strategy important?

Wagner: Strategy is indispensable for a CFO. Nearly every decision within a company has economic implications, and the CFO plays a crucial role in ensuring that financial considerations are integral to the decision-making process.

GF: How does being privately held shape relations with investors?

Wagner: I think we have a much closer relationship with them. Regardless of whether you’re a public or private company, when you’re dealing with investors, one of the things I learned earlier in my career is you need to have empathy for them. They are not involved in the day-to-day of your business, and having consistent metrics and clear communications is critical in helping them understand what is going on within the business.

GF: What’s another lesson from a past job that’s relevant in your current role?

Wagner: During my time at Citrix, I realized the importance of stepping out from behind the desk. As the head of finance for sales services and marketing, I actively engaged with sales teams, participating in quarterly business reviews and accompanying the chief revenue officer on travel. This hands-on approach provided a deeper understanding of the business dynamics. My advice, particularly to CFOs, is to go a couple of levels below your peers. It’s easy to get caught up in the numbers, but understanding the reality of operationalizing requires getting directly involved in the business.

GF: Do you think there are extra challenges for women CFOs?

Wagner: It’s not uncommon for women to be perceived as petty when the same behavior in a man might be viewed as competence. You have to navigate the delicate challenge of pushing back assertively while maintaining a positive demeanor. This balance is crucial in fostering effective communication and leadership, particularly for women in professional settings.

GF: What keeps you up at night?

Wagner: Interestingly, it isn’t always negative thoughts that keep me up at night. A few weeks ago, I had the opportunity to address the entire sales team about compensation and the importance of securing high-quality deals. I was so thrilled about the prospect of delivering this message that I couldn’t sleep the night before. My enthusiasm had me ready to go at 4 o’clock in the morning, even though my presentation wasn’t until 8:30. Sometimes it’s the positive and exciting moments that can keep you up at night.

It adds scale to Discover, which is currently fourth in size among the US credit card networks after Visa, Mastercard and Amex, and it’s a clear bet that a post-pandemic expansion of the credit card loan level will keep rising in the coming years.

“Through this combination, we’re creating a company that is exceptionally well-positioned to create significant value for consumers, small businesses, merchants and shareholders as technology continues to transform the payments and banking marketplace,” said Richard Fairbank, founder and chief executive of Capital One, during the deal’s announcement.

If the parties conclude the deal and regulators approve it, Capital One shareholders will own 60% of the combined company, while Discover shareholders will own the rest. It will create the sixth-largest US bank group.

According to some, the planned purchase will also create the largest credit card company by outstanding volume. By purchase volume, the combined company would be the third-largest credit card issuer after JPMorgan Chase and American Express.

 Some politicians have cried foul, noting that Capital One will have too much clout, leaving customers with fewer options. Democratic progressives in Congress have long fought bank consolidation, saying that larger banks were increasing systemic risks and providing worse conditions for their clients.

Senator Elizabeth Warren demanded that the Biden administration block it. Maxine Waters of the House Financial Services Committee said the deal will significantly affect consumers and small businesses.

However, Capital One and its supporters say that the tie-up with Discover will strengthen a competitor of powerful networks such as Visa and Mastercard—in what could instead be a win for consumers.

Capital One expects the deal to be approved by regulators in late 2024 or early 2025.