Dive Brief:
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CFO turnover among publicly traded companies surged in the first quarter to a near three-year high on an annual basis, according to an analysis by leadership advisory firm Russell Reynolds Associates.
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A total of 82 new public company finance chiefs were appointed in Q1, a number that is on par with record CFO turnover seen during the same period in 2021, according to the research.
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The latest figure represents an increase of about 14% from the same period in 2023 and a 24% jump compared with two years earlier, according to Russell Reynolds data shared with CFO Dive. In Q1 2021, the number was 83.
Dive Insight:
The recent spike “demonstrates that as economic uncertainty becomes the new normal for organizations, the trepidation to replace CFOs has dissipated,” the report said.
The high turnover rate can also be attributed to factors such as CFOs increasingly being considered succession candidates for the CEO role, as well as increased retirement rates among finance chiefs in the wake of the COVID-19 pandemic, according to Russell Reynolds.
More than half (55%) of global incoming CFOs are appointed internally, indicating that CFO succession plans are coming to fruition, the report said.
In a recent example, defense industry giant Northrop Grumman announced Tuesday that its space systems CFO, Kenneth B. Crews, will take charge of the company’s overall finance department, effective Oct. 1. Crews will replace current Northrop Grumman CFO Dave Keffer, who is planning to retire early next year to spend more time with family, the company said.
Costco, Walgreens, Popeyes parent Restaurant Brands International, and GameStop are among companies that announced new finance chiefs during the first three months of the year.
CFO turnover has increased since 2019, hitting a five-year high in 2023, with 292 CFOs appointed, compared to 274 across the same period in 2022, according to the Russell Reynolds’ report. The tech industry has recorded the highest CFO turnover since Q1 2022 at 6.2%.
