A hot IPO market in 2025 could fuel CFO churn
Good morning. CFO turnover remains high and it could get even higher, especially in the tech sector, as the market for deals and public offerings heats up.
Kelly Steckelberg is among the finance chiefs in high demand. She joined Zoom Video Communications as CFO in 2017 and helped take the company public in 2019. Steckelberg wrapped up her tenure at the Fortune 500 company in October, and this week will join the Australian design startup Canva as CFO.
Canva recently announced a new $32 billion valuation and reached a milestone of $2.5 billion in annualized revenue while remaining profitable for the seventh consecutive year, according to the company.
“I’ve been an admirer of the team, product and mission for a number of years,” Steckelberg, who will be based in Austin, Texas, said in a statement last week. “Their passion, creativity, innovation and remarkable growth are the hallmarks of a truly generational company.”
Canva, led by CEO Melanie Perkins, is certainly on a hot streak, and with Steckelberg on board, the company may be headed toward an IPO in the near future. Some experts think more companies will go public next year.
“IPO market and M&A, we are very bullish for 2025; we think it does come back,” Madhu Namburi, head of technology investment banking at JPMorgan told Bloomberg last week. There’s investor demand, he said.
Leadership advisory firm Russell Reynolds Associates has released new data from its Global CFO Turnover Index covering Q1 to Q3, 2024. The technology industry recorded a five-year high of 15.2% in CFO turnover from Q1 to Q3.
I asked Jenna Fisher, co-lead of the global financial officers practice at Russell Reynolds Associates (RRA), for her take on the data. As some companies gear up to prepare for IPO, those that receive the highest market caps when they go out will get experienced CFOs, Fisher said. “I think that will continue to fuel the tech churn,” she said.
Turnover in tech can also be attributed to increased retirement rates, as well as high CEO turnover and lower market performances over the past two years. This means many firms are spending time thinking of how to fill the CFO role, according to RRA.
Taking a look at CFO turnover globally across data from companies on stock market indexes, a total of 224 new CFOs were appointed from Q1 to Q3 2024, just shy of the record turnover witnessed in the same period in 2023, when 233 new CFOs were appointed, according to RRA.
Other findings: the average tenure of an outgoing CFO has reached a five-year low of 5.6 years; and 52% of outgoing CFOs are retiring or moving to board roles exclusively, up 11 percentage points year-over-year, reaching a five-year high.
With all of the turnover, CFOs will continue to be in demand.
“I sometimes joke that being a CFO is recession-proof,” Fisher told me. “In a good market, new CFO seats get created. And in a bad market, CFOs sometimes get unfairly blamed and replaced.”
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
Leaderboard
Shawn Munsell was appointed CFO of J&J Snack Foods (Nasdaq: JJSF), the parent company of brands such as Icee, Minute Maid, and Dippin’ Dots, effective Dec. 2. He will succeed Ken Plunk, who is retiring and will support the transition until the end of the year. Munsell arrives from avocado and fruit distributor Calavo Growers, where he was CFO. He previously spent seven years at Tyson Foods, serving as CFO of Tyson’s $14 billion poultry division after holding the roles of VP and treasurer.
Annette van Hoorde was promoted to EVP and CFO of Bladex (NYSE: BLX), a multinational bank established by central banks in Latin America and the Caribbean, effective April 2025. She will succeed Ana Graciela de Mendez, who is stepping down after 34 years at the company. Hoorde joined the bank in 2005 and currently serves as its SVP of funding and asset-liability management, a position she has held since 2019.
Big Deal
M&A Outlook: Bright spots, shadows on dealmaking horizon, is a new report from S&P Global Market Intelligence looking ahead to 2025. The environment has picked up in 2024, but deal announcements remain below pre-pandemic levels and are far off 2021’s record numbers.
Antitrust concerns haven’t stopped blockbuster oil and gas mergers, however, with regulators yet to block a $1 billion-plus acquisition since late 2023. Nonetheless, a broad M&A recovery can’t happen without an uptick in the technology sector, where private equity buyout firms are pursuing more transactions. There’s also widespread optimism that a second Trump administration could fuel a dealmaking boom.
“There is still plenty of room for growth in the M&A market,” said Joe Mantone, one of the report’s authors. “Lower interest rates and a less restrictive regulatory environment should make the dealmaking environment more conducive.”
Going deeper
Berkshire Hathaway currently holds more than $325 billion in cash and equivalents, even as the stock market has one of its best years since 2000. Why, Fortune’s Alena Botros asks in a new report, is Warren Buffett sitting on the sidelines? She talked with Cathy Seifert, a director at CFRA Research, about several potential explanations for the cash hoard.
Overheard
“If you think about non-alcohol beer as it was two years ago, maybe one would not invest. But because we are projecting 10 years down the road, we decided to invest globally. We developed the technology, which is pretty neat.”
—Michel Doukeris, CEO of the world’s biggest brewer, Anheuser-Busch InBev (AB InBev), told Fortune in an interview. Younger generations are drinking far less than their parents did. So Doukeris may ultimately be judged by how well he competes in one of the fastest-growing segments of the global industry: nonalcoholic beers. AB InBev’s future growth might depend heavily on marketing those beers.
