Xilinx CFO moves to Toshiba ahead of rumored IPO

Dive Brief:

Lorenzo Flores, CFO of San Jose-based tech company Xilinx, will resign at the end of October, the company announced in a press release last week. Flores will leave chip maker Xilinx for its rival, Toshiba Memory Holdings Corp. A press release from rival company Toshiba confirmed Flores was appointed to lead its finance team.
Flores worked for Xilinx for 11 years, the final three as CFO. Xilinx is now conducting a “formal search” for a replacement "to help lead its expansion into new markets and boost revenue for its data-center and automotive businesses.”
Xilinx’s vision reinforces a recent demand for CFOs who can serve various purposes for a company, including helping it bounce back from economic troubles. “This person should be able to make strategic recommendations to the CEO and provide value beyond the accounting skill set,” a Xilinx spokesperson told The Wall Street Journal.

Dive Insight:

Flores is waiting to depart until after Xilinx’s second quarter earnings are released on October 23, to “ensure a smooth transition,” Xilinx said. “Xilinx is extremely well-positioned in the industry and I am highly confident that the broad strength of the organization and management will ensure its continued success," Flores said.

Until Xilinx finds a replacement CFO, Sumeet Gagneja, corporate vice president, finance and corporate controller, will step in as chief accounting officer, and Matt Poirier, senior vice president of corporate development and investor relations, will step in as treasurer. The two will report to Victor Peng, Xilinx president and CEO, who will provide oversight of finance operations, the company said.

Representatives for Xilinx did not immediately respond to a request for comment on how a drawn-out search might complicate their future acquisition strategy.

In the hours following the company announcement, Xilinx shares fell 6.8% to $96.55 Friday, the Journal reported.

Flores’ departure “could signal some headwinds for the company in the next one or two quarters,” Kinngai Chan, senior research analyst at Summit Insights Group LLC told the Journal. The company’s outlook for the 2020 fiscal year is “too aggressive given the global economic climate,” he said.

Toshiba Memory, which will be rebranded as Kioxia Holdings Corp. on Oct. 1, spun off from parent Toshiba Corp. last year, it said in its press release. It also may be gearing up to go public.

Xilinx saw substantial economic growth under Flores’ leadership, bringing "a proven track record of strong executive leadership to the company with extensive financial experience in the technology industry," according to the press release.

Additionally, "Mr. Flores will work closely with the executive management team to help lead global business expansion," Toshiba said.