Executive search experts say they’re seeing an uptick in year-end CFO exits — with two of the latest high profile finance chiefs departing music streaming giant Spotify Technology and EV-maker Lucid Group underscoring the strategic shake-ups underway.
Turnover around the end of the calendar year is not unusual. Many companies shuffle executives at year-end as they prepare to restart the “fiscal shot clock” and find a permanent replacement CFO by the end of the first quarter. But this year, concerns about a potential slowing of the economy early in 2024 is likely triggering more executive movement, Josh Crist, co-managing partner at the executive search from Crist Kolder, wrote in an emailed response to questions.
“We are seeing even more churn this season than traditional end of year cycles. I believe there is anxiety regarding a potential slight market blip to come calendar quarter one or, more likely, calendar quarter two of next year,” Crist said. Economic anxieties will always increase the movement as companies work to bring aboard a different executive, likely one who is more “operational,” with a cost focus, he said.
Shawn Cole, president of boutique executive search firm Cowen Partners, also said he thought the pace of year-end executive exits was above normal but to be expected, especially as companies across the board are struggling with high inflation and tight credit.
“Companies are repositioning and realigning their leadership for the current economy. Spotify is a good example; their current CFO’s skills no longer match the business needs,” Cole said. “We are swinging back towards the operationally focused CFOs, with CPAs, and strong financial reporting, and internal controls experience — shareholders demand it.”
Last week Spotify gave a nod to such a strategic shift in its announcement that CFO Paul Vogel would be leaving the company effective March 31. Vogel had been at the finance helm for four years and head of FP&A, treasury and investor relations for over three years prior, according to his LinkedIn profile.
“Spotify has embarked on an evolution over the last two years to bring our spending more in line with market expectations while also funding the significant growth opportunities we continue to identify,” Daniel Elk, the company’s CEO and founder, said in a statement in the release, noting that he talked with Vogel about balancing objectives. “Over time, we’ve come to the conclusion that Spotify is entering a new phase and needs a CFO with a different mix of experiences.”
The news of Vogel’s departure came days after the company announced it would be cutting its total headcount by about 17% across the company, according to a Dec. 4 note from Elk posted on the company’s website. The New York-based company said it had launched an “external search for his successor and named Ben Kung, vice president of financial planning and analysis, to take on additional roles to support the “realignment of the company’s financial leadership team.”
Separately on Monday Newark, California-based Lucid said CFO Sherry House, who has been finance chief since May of 2021, informed the company she was resigning from her position effective immediately though she will stay on in an advisory capacity through Dec. 31, according to a Securities and Exchange Commission filing. The company tapped Gagan Dhingra, 49. the company’s vice president of accounting and principal accounting officer, to serve as interim CFO while it searches for a replacement for House, who was 51 at the time of a March proxy filing.
