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Plus, CFOs on the Move and End of the Buddy System?
CFO Staff, CFO Magazine
August 1, 2002
CFOs On The Move
Rob Doty, CFO of shell-shocked energy trading firm Dynegy Inc., resigns, sending shares down 10 percent on the news.... Jeffrey C. Campbell named SVP of finance and CFO of American Airlines, replacing Thomas W. Horton. Horton takes SVP and CFO spots at AT&T Corp., succeeding Chuck Noski.... Richard J. Dahl named VP and CFO at Dole Food Co., replacing Kenneth J. Kay, who left to pursue other interests.... And for those living under a rock, Scott Sullivan, CFO of WorldCom Inc., fired for alleged accounting fraud.
Stories of executives with private jets evoke grumbling about the excesses of the corporate elite. But some flying execs are more worthy of an "attaboy."
For the past year, Karim Houry, a vice president of finance at American Express, has been volunteering for Angel Flight, a nonprofit organization that provides free flights to medical patients needing care at far-off facilities. Averaging a mission a month, Houry and his partner Mike Rizzo (who owns the single-engine Cessna 172 they fly) have spent about 100 hours and more than $5,000 to fly patients, including a child with brittle-bone disease and another with severe burns, for treatment. "You pay for it out of your own pocket," says Houry, "but it's a hobby we would be doing anyway. This way, we get to do something we're passionate about and help someone else at the same time."
While the organization doesn't yet track the volunteer pilots by their day jobs, the efficient combination of pleasure and charity has attracted more than a few from finance. Michael Friedman, currently CFO and general counsel for E-commerce software maker Valu.net Corp., began flying for Angel Flight Mid-Atlantic more than three years ago, largely to make his frequent business flights more worthwhile. "I was always traveling by myself," he says, "and I was looking for a way to give back to the community." He turns over his business-flight schedule--150 hours to 200 hours per year--to a local mission coordinator to see if he can meet any of the patients' needs. On a recent business trip from Virginia to Atlanta, he dropped off and picked up a patient who was receiving treatment in Charlotte, N.C. "If the patient's needs fit my flight schedule, I do it," he says.
Others, like Paul Stefaniak, a division controller for Ericsson Inc. in Plano, Tex., donate their time to the business side of the charity. The two-term treasurer and director for Angel Flight South Central says his flying partner convinced him to lend his skills to the growing organization about four years ago.
Composed of seven regional organizations, Angel Flight America arranges most of the country's charitable flights for nonemergency long-distance trips for medical treatments. In 2001, volunteer pilots flew 10,000 trips for 23,000 passengers, according to the group's Web site. --Alix Nyberg
End of the Buddy System?
When Oren Shaffer agreed to become the new CFO of Qwest Communications International Inc., he joined a long line of CFOs who have followed their former bosses into new postings. Former Sunbeam Corp. CEO Albert "Chainsaw Al" Dunlap and former CFO Russell Kersh worked together at a variety of posts for more than 15 years. Jamie Dimon, CEO of Bank One Corp., conscripted the services of longtime colleague Heidi Miller into the CFO position. The new management team at Kmart Corp. includes CEO James B. Adamson and CFO Albert Koch, who previously worked together at a turnaround firm. In Shaffer's case, the CEO who beckoned was Richard Notebaert, new head of Qwest and a former colleague of Shaffer's at Ameritech Corp., where the two men held the same roles.
"The only reason a CFO would jump into a challenging situation is that [he or she has] a good relationship with, and confidence in, the CEO," says Barry Bregman, managing partner at executive recruiter Heidrick & Struggles. "It's a lot easier to get someone who you have a relationship with to join you in a battle than someone who doesn't need to get into the battle."
But the buddy system may not be long for this world, especially in the era of strident calls by shareholders and watchdog agencies for more independence in corporate management.
"As we have more scrutiny of the CFO," says Bregman, "I think that boards and shareholders are going to look for more independence between the CFO and the CEO, especially when a new CEO comes in and needs to replace the CFO. We're going to see more CFOs being brought in who are outside the realm of prior relationships," he predicts. -- Kris Frieswick