The movement of finance chiefs has been notable: In the initial quarter alone, 82 new CFOs were appointed at public companies, equating to the peak turnover previously observed in Q1 2021, as reported by the executive search firm Russell Reynolds Associates’ quarterly index. For instance, within the S&P 500, turnover was significant, with 4.8% of CFOs departing in the first quarter, a notable increase from last year’s 2.8%, while incoming figures reached 5.8%, surpassing the previous year’s 3.8%.
According to Russell Reynolds Associates' data, CFO succession plans are being effectively implemented. Globally, 55% of the new finance chiefs were promoted from within, a proportion that increases to 66% within the S&P 500. Businesses are increasingly viewing CFO positions as potential stepping stones to chief executive roles, Jenna Fisher, managing director and head of the CFO practice at RRA, explained. Typically, CFOs progress to the CEO position via an intermediary role such as COO, president, or division general manager, roles that provide essential P&L leadership and experience, considered a critical requirement for CEO candidates.
In the first quarter, of the 82 appointments, 20 were women, marking the highest number since Q1 2021. In comparison, the total number of women appointed as CFOs globally in 2023 was 57, versus 235 men. The recent upticks in CFO transitions are partly due to more CFOs moving up to CEO positions. Also, according to RRA, many new CEOs prefer to appoint their own CFOs shortly after taking charge, and the retirement rates among CFOs have increased post-pandemic.
Furthermore, CFOs are increasingly assuming new roles within their existing organizations. For instance, Dave Stephenson was elevated from CFO to the newly created role of chief business officer at Airbnb in 2019, tasked with leading strategy and international growth, while maintaining his position as head of employee experience since 2021. Ellie Mertz, a longtime finance leader at Airbnb, succeeded Stephenson as CFO. At Alphabet, Google's parent company, Ruth Porat transitioned from CFO to the new role of president and chief investment officer, continuing as CFO until a successor is appointed. Mark Secor of Horizon Bancorp, after 16 years as CFO, moved to the role of chief administration officer, with John R. Stewart stepping in as the new EVP and CFO effective May 20.
These changes highlight a dynamic year for CFOs within C-suites, indicating a trend of increasing strategic realignment in top executive roles in 2024.