CFOs give a not quite thumbs down to the economy

The equities markets may have recouped after their dip at the beginning of March, but the nation’s CFOs don’t seem to be quite so sanguine about the health of the economy. According to a recent survey by Financial Executives International and Baruch College, 37.7% of the 244 CFOs responding said they were more concerned about the possibility of recession than they had been in the fourth quarter of 2006, with close to one-quarter describing themselves as quite and even very concerned.

Besides economic growth, which led the list of concerns, CFOs ranked healthcare costs and consumer spending as their next two biggest economic worries. A little more than one-third expect the Federal Reserve to lower interest rates, while half expect interest rates to remain the same, and 42.6% predicted that the dollar would continue to lose value against the euro for the rest of 2007.

An overwhelming number—68.7%—said that companies found guilty of backdating options should be fined. More than half of the CFOs—55.8%—told the FEI-Baruch survey that current financial reporting regulations in the U.S. “somewhat hinder” the ability of U.S. capital markets to attract new listings.

Almost 74% of the CFOs surveyed worked at companies with revenues of under $500 million and 67.8% were from companies with fewer than 1,000 workers.

 

Boards need more IT talk from CFOs and treasurers

While most boards of directors appear to acknowledge the importance of information technology to their companies’ business goals, the fact is that many—if not most—directors are disengaged from their company’s IT strategy, according to a survey conducted by Deloitte Consulting LLP. The results are all the more surprising since 67.5% of those agree there is connection between the attention paid to IT and superior corporate performance. “There is a correlation between business performance and the level of engagement between boards and their IT strategy,” says Adam Broun, a principal at Deloitte Consulting. “Yet at the same time, there is an enormous gap in just how engaged board members are.”

Broun describes a lack of background and familiarity with the function of IT on the board, but he also acknowledges that IT needs to meet the board halfway. “Discussion with the board has to be framed in ways that resonate with the issue that they are trying to address,” says Broun. “You don’t go and talk about the virtues of one programming language versus another. You need to frame IT issues within the context of corporate strategy.”

Broun notes the role that CFOs and treasurers can play in bridging the gap between the board and IT. In the survey, 29% said that the CFO leads the IT strategy discussions that take place with the board. “CFOs and treasurers can play an important bridging role in presenting the strategic case for IT since they can frame the discussion in terms of ROI, corporate governance, capital allocation, strategy, of shareholder value and return and other important financial metrics,” Broun explains.

The survey was conducted in the fall of 2006 and involved some 450 directors at large publicly traded companies.

Aetna Inc. has appointed Joseph M. Zubretsky executive vice president of finance for the $25.1 billion healthcare benefits company, with headquarters in Hartford, Conn. Zubretsky, 50, is slated to assume the role of CFO after current CFO Alan Bennett retires April 27. Prior to Aetna, Zubretsky served as senior executive vice president of finance, investments and corporate development at Unum Provident Corp. Before joining Unum Provident Corp. in 2005, Zubretsky was a partner at the Insurance Industry Investment Group of Brera Capital Partners.

American International Group Inc. has named Jerry M. de St. Paer senior vice president of finance of the $108.9 billion insurance and financial services company, based in New York. Prior to joining AIG, de St. Paer, served as senior vice president and CFO of XL Capital Ltd. since 2001. Previously, he held the position of managing director in the insurance division of JPMorgan and various senior positions at Equitable Cos.

AOL has named Nisha Kumar as CFO of the $8.3 billion global web services company, based in Dulles, Va. Kumar, 36, replaces Steve Swad, who resigned to join a private investment firm. Kumar joins AOL from Time Warner Inc. where she held various senior positions including vice president of operations and vice president of mergers and acquisitions. She was involved in Time Warner’s bid for MGM and sale of Warner Music Group Corp. Prior to Time Warner, Kumar had been vice president at Priceline.com Inc. and was an investment banker at Morgan Stanley.

Avery Dennison Corp. named Mitchell Butier vice president, controller and chief accounting officer of the $5.6 billion pressure-sensitive labeling materials, office products and retail tag, ticketing and branding system, with headquarters in Pasadena, Calif. Butier, 35, replaces Michael A. Skovran, who has resigned. Butier will be responsible for the company’s domestic and international accounting policies and practices as well as reporting and maintenance of fiscal records. He joined Avery Dennison in 2000 as North American finance director of office products. In 2002 he was named European group director of finance for roll materials, and then he went on to become vice president of finance for retail information services in 2004. Prior to his time at Avery Dennison, he was a senior manager at PricewaterHouseCoopers LLP.

Cott Corp. has named Juan Figuereo CFO of the $1.7 billion retailer brand soft drink provider, with headquarters in Toronto, Canada. Figuereo assumes the position from interim CFO Tina Dell’Aquila. Prior to joining Cott, Figuereo was vice president of mergers and acquisitions at Wal-Mart International Inc. Prior to Wal-Mart, he spent 15 years with PepsiCo Inc. where he held numerous positions throughout international finance and general management, including CFO for Frito Lay in Southern Europe CFO in Brazil and Latin America for Pepsi-Cola.

Energy Transfer Partners LP has named Brian Jennings CFO of the $7.9 billion partnership that owes and operates midstream energy assets, based in Dallas. Jennings, 45, succeeds Michael Kirmball who has retired. Jennings served as CFO and senior vice president of corporate finance and development at Devon Energy Corp. Before joining Devon Energy in 2000, he was managing director in the energy investment banking group of PaineWebber Inc.

Fortune Brands Inc. has appointed Edward Wiertel vice president and corporate controller of the $7.1 billion consumer brands company, based in Deerfield, Ill. Since 2002, Wiertel served as a partner at KPMG LP in their Chicago office. Prior to 2002, he spent 11 years at Arthur Andersen LLP and was made partner in 2000.

Hanover Insurance Group Inc., based in Worcester, Mass., is initiating a search for an executive vice president and CFO following the resignation of current executive vice president and CFO Edward J. Parry III. Parry has decided to leave the $2.4 billion holding company. He joined the company back in 1992 as a merger and acquisition specialist and has served as CFO since 1996. Parry will also resign as a director of the company on May 15.

Morningstar Inc., the $227.1 million provider of independent investment research, is looking for a new CFO because its current CFO Martha Dustin Boudos has voluntarily stepped down from her role as CFO. She approached chairman and CEO, Joe Mansueto, stating she was ready for a change with Morningstar and wanted to spend more time with her family. Boudos, 40, has served as CFO since 2001. She headed the company’s open-auction initial public offering in 2005. After joining Morningstar in 1992 as a marketing manager, she had a large role in the making of Morningstar.com, before being named CFO five years ago. She also previously served as Morngingstar’s vice president of human resources.

PMC-Sierra Inc. has named Michael W. Zellner vice president and CFO of the $291.4 million provider of high-speed broadband communications, with headquarters in Santa Clara, Calif. Zellner, 52, replaces Alan Krock, who resigned last July. Prior to joining PMC-Sierra, Zellner was senior vice president of finance and administration and CFO of Wind River Systems Inc. He brings over 25 years of senior management finance experience in the high tech sector.

Potlatch Corp., the $1.6 billion real estate investment trusts and forest products manufacturer, announced the retirement of its CFO, Gerald l. Zuehlke. The 58-year-old Zuehlke spent 36 years with Potlatch and served as the CFO since June 2000. Earlier he held various positions, such as, treasurer. Potlatch has retained Russell Reynolds and Associates to conduct the executive search to find a successor for Zuehlke, who will continue to perform CFO duties for an unspecified period to ensure a smooth transition.

TravelCenters of America LLC named John R. Hoadley CFO of the $4 billion nationwide network of hospitality and fuel service stations along U.S. highways. TravelCenters keeps its headquarters in Westlake, Ohio. Hoadley, 35, succeeds James W. George. Along with his new duties, Hoadley will continue to serve as treasurer. Prior to joining TravelCenters, he was a senior vice president of REIT Management, a subsidiary of Hospitality Properties Trust, since 2006. Previously, he served as treasurer and CFO of Senior Housing Properties Trust, another subsidiary of Hospitality Properties Trust and controller of Hospitality Properties Trust. Hoadley, who is also a certified public accountant, had been a senior accountant at Arthur Andersen LLP earlier in his career.

Article found in Careers, People on the Move

When we say longevity, just how long do we mean?

In mid March, JPMorgan Chase & Co. unveiled the LifeMetrics Index, part of the LifeMetrics toolkit that includes software that can be used to develop mortality projections. The index was developed for the use of pension plans, sponsors, insurers and reinsurers to help determine longevity risk. The toolkit is free and publicly accessible at jpmorgan.com/lifemetrics. “What the index does is it gives a snapshot on mortality and longevity today and what it will be tomorrow—in the context of what the growth has been in the past,” explains Guy Coughlan, managing director and global head of pension asset liability management at JPMorgan. The index is the second of its kind: In December 2005, Credit Suisse released the Credit Suisse Longevity Index. “We’ve had interest from insurance companies looking for an independently verifiable source to check their own actuarial assumptions. From pension funds and from the reinsurance sector as well,” notes Caitlin Long, a managing director and head of the Structured Solutions group within the US Financial Institutions Group (FIG) of Credit Suisse.

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