Some CFOs are bigger than others…

July 18, 2012

Apologies to The Smiths, whose song, “Some Girls are Bigger than Others“, came to mind when we started to contemplate a number of CFOs changing jobs this week. Here I risk dating myself a bit, but as a fan of The Smiths back in college, I’m quite confident that Morrissey never thought his song would bring CFOs to anyone’s mind.

And, yet, over the past two days, we’ve seen four new CFOs named, which gave us an opportunity to contrast and compare what the new executives are making (or, perhaps more precisely, how skilled their respective attorneys are at negotiating the details).

On Monday, both Plantronics (PLT) and Leapfrog Enterprises (LF) announced new CFOs, setting up the first coupling. As this press release noted, Pamela Strayer, a former VP for finance at Autodesk (ADSK), started at Plantronics yesterday. Over at Leapfrog, Ray Arthur, the former CFO at Pep Boys (PBY), which called off its sale at the end of May, also started yesterday, according to this press release. Both executives are seasoned veterans, but Arthur clearly had a better negotiator since his package is pretty plush, particularly when compared with Strayer’s. There’s also the not-too-insignificant fact that Leapfrog is nearly 1/3 the size (in terms of market cap) as Plantronics.

Here’s Strayer’s package in a nutshell: $325K base salary, $25K signing bonus, 40,000 options and 10,000 RSUs. Now compare that to Arthur’s: $525K base salary, 300,000 options, and 100,000 RSUs. Unlike Strayer, Arthur doesn’t appear to be getting a signing bonus, but he will get a $10,000 a month travel subsidy plus unspecified moving expenses. Did we mention that Leapfrog is substantially smaller than Plantronics?

The second CFO coupling came in yesterday’s crop of 8-Ks. TE Connectivity (TEL) announced several management changes, including the appointment of Bob Hau as CFO. Hau had been at Lennox International (LII), which prompted Lennox to announce its own new CFO on Tuesday. One might think that making the leap to a much larger company, with, presumably more responsibility might be enticement enough for Hau. But TE decided that they had to lure Hau with a $1.7 million signing bonus, as well. As an added sweetener, they threw in $2 million in restricted stock. Hau’s base salary doesn’t appear to be significantly different than the $433K he made at Lennox last year.

Meanwhile, Lennox, which promoted Joseph Reitmeier to CFO from a similar role at a Lennox business unit, seems to be getting off pretty cheap. It saves money that it previously paid to Hau in the form of a higher salary; but it also apparently didn’t offer Reitmeier any of the options, signing bonuses or other sweeteners that these three other new CFOs got.

Now obviously this isn’t a scientific study and with the actual agreements missing from some of the filings, it’s hard to make compete comparisons. But a few things seem clear: getting a sweet deal doesn’t require you to be at a very big company. Instead, it seems to boil down to a skilled negotiator who’s able to ask for — and receive — all sorts of things.

Image source: The Smiths via Wikipedia Commons

Leave a Reply

You must be logged in to post a comment.