Companies are leaning harder on their finance chiefs to fill critical roles and tackle operational responsibilities in the face of ongoing economic and geopolitical challenges. For example, both insurer UnitedHealth Group and Hilton Grand Vacations Inc. — the vacation ownership partner of Hilton — announced this week that their CFOs would be elevated to the roles of president, while continuing in their top financial seats.
HGV CFO Daniel Mathewes has been promoted to president and CFO for the Orlando, Florida-based company, according to a recent Securities and Exchange Commission filing, while John Rex was appointed to serve as president and finance chief for Minnetonka, Minnesota-based UnitedHealth. Both moves are effective April 1, according to company filings.
For Mathewes, who joined the company in 2018 as its CFO after serving as finance chief for Virgin Hotels, adding the role of president will mean working more closely with HGV’s sales and local marketing functions — building on his “successful tenure overseeing the company’s finance, accounting, development and technology functions,” the company said in a recent press release.
UnitedHealth did not disclose what additional responsibilities Rex will take on its filing, but he is assuming the president role following the retirement of current President and Chief Operating Officer Dirk McMahon, who will step down from his roles April 1, the company said in a February SEC filing.
For both entities, the decision to tap the finance chief to fulfill these roles represents “the modern CFO in action,” Shawn Cole, president of boutique executive search firm Cowen Partners told CFO Dive in an emailed response to questions.
“They have clearly shown subject matter expertise in the business’ core product/service and are being rewarded for it,” Cowen said. “Many CFOs aspire to similar leadership promotions, and I think these are great examples of blended responsibilities on their way to a COO or CEO title.”
Making the CEO jump
The move comes as more and more CFOs are eying the path to the CEO seat, with a record number of finance chiefs being promoted to the top executive role last year, according to data from executive search firm Crist|Kolder Associates. About four out of five finance chiefs leaving their current positions are choosing non-CFO roles, data from Russell Reynolds Associates found, most commonly moving to CEO or president roles, for that matter.
However, despite this rising trend, CFO jumps to the CEO position remain a relative rarity — only 20% of S&P 500 CEOs had prior experience as a CFO even though the two positions demonstrate similar competencies and skill sets, according to another Russell Reynolds report.
This could be because CFOs often lack critical experience in certain areas; finance chiefs “have often struggled to rationalize sales and marketing, preferring to focus on costs and operational efficiencies,” Cowen said.
He pointed to research by executive search firm Spencer Stuart, which has shown CEOs that were former finance chiefs have greater profit margins than their peers, but lag behind when it comes to revenue growth. Absorbing new duties that fall outside of the traditional finance sphere — such as working closely with sales and marketing, as Mathewes will do for his new role as HGV president — can therefore be a crucial learning opportunity for those finance chiefs who are aspiring to the CEO chair, he said.
“Growing sales is the CFO’s greatest learning opportunity,” Cowen said.
In association with his promotion to president, HGV approved changes to Mathewes’ compensation, increasing his base salary from $650,000 to $725,000 effective April 1, according to the company filing. The compensation committee also approved an increase in his annual short-term, cash-based bonus and long-term equity in association with the promotion, including a long-term incentive grant with a grant value date of $550,000, also effective April 1.
UnitedHealth did not offer additional details regarding Rex’s compensation as president and CFO in their filing. In 2022, Rex received total compensation of approximately $15.8 million — the same total compensation as retiring COO and president McMahon, according to the company’s most recent proxy.
