Since we started the firm in 2001, Lonergan Partners has always conducted multiple Chief Financial Officer projects a year for technology companies, many here on the West Coast. That number has remained pretty constant in our history. In 2011, the number of CFO assignments started is already greater than the total completed last year and there is no sign of that pace slowing down. Funny thing is, we’re not really sure why.
The trend is not limited to Lonergan Partners or the Silicon Valley. Recent discussions with top CFOs in public technology companies indicate that the push is on nationwide.
Here are some of the reasons we are hearing for the remarkable upsurge in CFO search activity
- The IPO market is becoming white hot, and CEOs are looking to upgrade their CFO before a public offering.
- A number of CFOs who have led their companies’ financial organizations have done so for more than 10 years. As these CFOs retire, new replacements are required to lead for the future.
- Sarbanes Oxley is now 10 years old. Companies are more confident in their compliance models. Compliance-focused CFOs are less interesting going forward than strategy-focused CFO candidates.
- CEO turnover peaked in technology markets in the 2008 – 2009 timeframe. CEOs are more confident in their own job security and are looking for CFOs closer to their own operating expectations.
One longtime CFO told me recently that he’s now receiving 2 – 3 calls from companies and from recruiters a week, as compared to only two calls in all of 2008.
How long the run of CFOs will last is anyone’s guess. But if you have a good one, this might be the time to make him/her feel good about staying put.