Now Finance Chiefs Are First to Go

Sunday Business (London, England), May 13, 2001 | Go to article overview

Now Finance Chiefs Are First to Go


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HE first head on the boardroom chopping block of a struggling US company is increasingly likely to be the chief financial officer, according to an analysis of employment statistics.

The company bean counter has supplanted the chief executive as the obvious target for an impatient board or irate investors looking for someone to blame for poor performance, the analysis reveals.

Dozens of the most powerful financial officers in the United States were ousted from blue-chip companies last month as new solutions were sought on how to rejuvenate stock prices.

Others brought forward their resignations by several years or announced they were planning a change in career.

A benchmark was set because it was the first time the number of sacked chief financial officers exceeded the number of chief executives to be dismissed in any month, according to Chicago-based job-placement company Challenger, Gray & Christmas, which monitors the changes.

Casualties include Richard Bressler, ousted as chief financial officer of AOL Time Warner, the media conglomerate; Alan Weber announced he is leaving struggling insurance giant Aetna; Basil Anderson departed Campbell Soup; Carl Miller quit electronics conglomerate TRW; and William Finkelstein left Warnaco Group.

The most recent casualty is Lucent's chief financial officer, Deborah Hopkins, who left a week ago. Bressler, however, was out of work for less than a week before being recruited by Viacom, the competing media giant.

According to the research, more than 70 chief financial officers lost their jobs in April compared with 63 chief executives.

"Chief executives appear to be being given a second chance. This time round, the cfo is the scapegoat. It could be a sign that companies are putting greater emphasis on how money is managed as opposed to how the company is managed. It is another case of shoot the messenger," said John Challenger, president of Challenger, Gray & Christmas.

Challenger said the finance chief will remain under the greatest pressure until improvements in share prices or the economy boost management and investor confidence.

Chris Zook, head of consultancy Bain & Company's worldwide strategy practice, said that financial officers were caught in a "perfect storm" of calamitous conditions.

"Investors and boardrooms these days have greater expectations about share prices and returns," he added. "There are greater penalties for shortfalls and it is a much more difficult economic environment in which to compete. …

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