Why CFO turnover at public companies just hit a 3-year high

Good morning. Finance chiefs are on the move: In just the first quarter, a total of 82 new CFOs were appointed at public companies—matching the record turnover seen in Q1 2021, according to executive search firm Russell Reynolds Associates’ quarterly index.

Taking a look at the S&P 500, for example, 4.8% of CFOs left in the first quarter, compared with 2.8% who did so at the same time last year, meanwhile the incoming figure of 5.8% was markedly higher than last year's 3.8%.

CFO succession plans, according to RRA's data, are coming to fruition: Overall, 55% of global incoming finance chiefs were internal candidates, a figure that rises to 66% among the S&P 500. Increasingly, businesses are looking closely at the CFO to provide succession potential for the CEO, Jenna Fisher, managing director and head of the CFO practice at RRA, told me.

However, when a CFO eventually ascends to the CEO seat, there is usually an interim step between CFO and chief executive, such as being the COO, president, or the general manager of a division. "These roles provide much-needed P&L leadership oversight and experience, which is frequently a non-negotiable technical requirement for CEO candidates," Fisher said.

Among the 82 appointed in the first quarter, 20 were women—also the most since Q1 2021, according to the report. (Overall, in 2023, women accounted for 57 of CFO appointments globally compared with 235 for men.)

Part of the reason for the CFO shakeup is more finance chiefs ascending to the top spot at public companies. Additionally, RRA noted, many new CEOs like to quickly appoint their own CFOs after taking over, and retirement rates for finance chiefs rose post-pandemic.

Another factor is CFOs increasingly taking on new roles at their current firms. Some recent CFO changes come to mind. Dave Stephenson, who joined Airbnb as CFO in 2019, was promoted to the newly created role of chief business officer, which he started in January. He’s charged with spearheading strategy and driving international expansion. (Stephenson continues his role as head of employee experience since 2021.) Ellie Mertz, a longtime Airbnb finance leader, succeeded Stephenson as CFO.

At tech giant Alphabet, parent of Google, Ruth Porat, the company’s longest-serving CFO, was promoted to the newly created role of president and chief investment officer. Porat began the role in September and is staying on as CFO until her successor is in place.

And Mark Secor, CFO at Horizon Bancorp for the past 16 years, is becoming chief administration officer responsible for investor relations, legal, benefits administration, and corporate facilities. John R. Stewart was named the next EVP and CFO, effective May 20.

Those are just a few examples, but 2024 is shaping up as an interesting year for those keeping a close eye on C-suites—and those coming and going from them.

Sheryl Estrada
sheryl.estrada@fortune.com

This story was originally featured on Fortune.com