Good morning. CFO turnover remains high and it could get even higher, especially in the tech sector, as the market for deals and public offerings heats up.
Kelly Steckelberg is among the finance chiefs in high demand. She joined Zoom Video Communications as CFO in 2017 and helped take the company public in 2019. Steckelberg wrapped up her tenure at the company in October, and this week will join the Australian design startup Canva as CFO.
Canva recently announced a new $32 billion valuation and reached a milestone of $2.5 billion in annualized revenue while remaining profitable for the seventh consecutive year, according to the company.
“I’ve been an admirer of the team, product, and mission for a number of years,” Steckelberg, who will be based in Austin, Texas, said in a statement last week. “Their passion, creativity, innovation, and remarkable growth are the hallmarks of a truly generational company.”
Canva, led by CEO Melanie Perkins, is certainly on a hot streak, and with Steckelberg on board, the company may be headed toward an IPO in the near future. Some experts think more companies will go public next year.
"IPO market and M&A, we are very bullish for 2025; we think it does come back," Madhu Namburi, head of technology investment banking at JPMorgan told Bloomberg last week. There's investor demand, he said.
Leadership advisory firm Russell Reynolds Associates has released new data from its Global CFO Turnover Index covering Q1 to Q3, 2024. The technology industry recorded a five-year high of 15.2% in CFO turnover from Q1 to Q3.
I asked Jenna Fisher, co-lead of the global financial officers practice at Russell Reynolds Associates (RRA), for her take on the data. As some companies gear up to prepare for IPO, those that receive the highest market caps when they go out will get experienced CFOs, Fisher said. “I think that will continue to fuel the tech churn,” she said.
Turnover in tech can also be attributed to increased retirement rates, as well as high CEO turnover and lower market performances over the past two years. This means many firms are spending time thinking of how to fill the CFO role, according to RRA.
Taking a look at CFO turnover globally across data from companies on stock market indexes, a total of 224 new CFOs were appointed from Q1 to Q3 2024, just shy of the record turnover witnessed in the same period in 2023, when 233 new CFOs were appointed, according to RRA.
Other findings: The average tenure of an outgoing CFO has reached a five-year low of 5.6 years; and 52% of outgoing CFOs are retiring or moving to board roles exclusively, up 11 percentage points year over year, reaching a five-year high.
With all of the turnover, CFOs will continue to be in demand.
“I sometimes joke that being a CFO is recession-proof,” Fisher told me. “In a good market, new CFO seats get created. And in a bad market, CFOs sometimes get unfairly blamed and replaced.”
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
