Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Administration December 3, 2006
CFOs Leaving at Record Pace
March 24, 2005 (PLANSPONSOR.com) - CFOs are leaving
their posts in record numbers citing Sarbanes-Oxley and
corporate accounting burdens as two main reasons for such
moves.
Reported by Kip McDaniel
Between December 1 and January 31, over 200 CFOs left their posts, according to a 10-K Wizard analysis for USA Today. This has more than doubled from the same time last year, when 85 departed.
The move has come on extremely fast too, since Reuters data indicates that only 13% of CFOs in S&P 1500 companies resigned last year, 1% lower than the year before. This indicates that the exodus started late in the year and continued into 2005. Even more changes occurred in small companies, according to USA Today.
CFOs polled by CFO Magazine said they were feeling the pressure, with 68% saying the pressure was greater than last year. Work hours per week were up on average – 52.9 to 49 two years ago – and 63% think that the pressure at the office is hurting their health.
One major factor behind the departures and pressure is Sarbanes-Oxley, according to USA Today. The law, which requires companies to research their “internal controls” and tell regulators of any shortcomings, is causing a rise in costs and a subsequent increase in the number of CFO departures. This new law has been a contributing factor in a threefold increase in the number of late filings with the SEC, according to Bloomberg News.
Another cause is the turnover in corporate auditors, according to USA Today. More then 2,500 companies have switched their auditor in the last 24 months, according to financial research firm Glass Lewis, and more than 300 have done so since January 1.
Companies, learning the importance of a good CFO, are “upgrading” theirs in order to avoid future problems, USA Today suggests.