Tom Wolfe Was Wrong

Spate of CFOs returning to old employers. Latest: Stepp rejoins Collins & Aikman. Plus: Halliburton CFO stands by ex-boss Cheney, and Foster Wheele...
Lisa YoonMay 23, 2002

>> Collins & Aikman Corp. said acting CFO J. Michael Stepp is staying on permanently as executive VP and CFO… Stepp no newcomer to the maker of car parts (dashboards, convertible tops, acoustic systems, and the like). He’s been acting CFO since January and did an earlier stint as CFO (1995-1999). Then went on to be VP of corporate planning and development… Stepp served as a consultant to company for a year before becoming senior managing director at Heartland Industrial Partners in 2001.

Stepp not only CFO to come back to former employer of late. Yesterday, we reported that Mark Voll returned to Monolithic System Technology as CFO. And earlier this month, Ford Motor coaxed former CFO Alan Gilmour out of retirement for an encore stint (see “Job One: Ford Said to be Naming New Number Two.”).

So what gives? Could be that, in these times of earnings-conscious investors, companies are going back to the basics of financial due diligence. “Four or five years ago, CFOs with M&A and treasury experience were in demand,” explains Barry Bregman, head of the CFO practice at search firm Heidrick & Struggles. “Now, especially in the post-Enron environment, what we’re seeing is a demand for CFOs with proven track records in financial management.”

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It’s also matter of trust, says Bregman. A CFO that performed well before, he argues, will enhance a company’s Street cred.

For Collins & Aikman, it may be the right move. On Stepp’s watch as acting CFO, the company did report a loss for Q1 — but a narrower one the same period previous year. And sales more than doubled, from $453 million to $915 million.

>> Halliburton CFO Doug Foshee is standing by his man. Which man? Vice President — and former Halliburton boss — Dick Cheney.

With questions surfacing about Halliburton’s change to a more aggressive accounting policy during Cheney’s tenure as CEO, Foshee told the New York Times Cheney could not possibly have signed off specifically on the change. Foshee characterized change as routine decision…

Management at oil industry specialist decided to book as revenue more than $100 million in customer-disputed costs — before claims were settled. The switch came in 1998, when Halliburton was hit hard by losses and an oil recession, and was approved by then-auditor Arthur Anderson. According to Foshee, lead auditor and current CEO David Lesar approved change. Foshee defended change to The Times, saying it represented small fraction of total sales. Foshee says company reported accounting switch a year later…

Some accounting experts running up red flags, however. One critic: former SEC chief accountant Lynn Turner, who reportedly pointed out several flaws in bookkeeping move. And those are? Recording claims before instead of after settlement, failure to show that change provided investors with more accurate financial information, and failure to report bookkeeping change immediately… Stay tuned on this one.

>> Mark Hahn joined prepaid phone services provider Equitel as CFO. Hahn was previously finance chief at business software maker Performaworks… Before that, was CFO at Charles & Colvard, where he led company’s $45 million IPO.

CFO Insider

>> Yet another CFO appears to have fallen on sword. Construction holding company Foster Wheeler announced finance chief, Gilles Renaud, resigned to “pursue other opportunities.” While management did not point finger at Renaud, timing is curious. Foster Wheeler’s got plenty of problems right now, including widening losses, difficulties in paying back debt, and even concerns about company’s ability to continue operating.

Renaud joined Foster Wheeler in March 2000 from United Technologies Corp., where he was VP and treasurer… Foster Wheeler’s current VP and treasurer Robert Iseman will serve as acting principal financial officer during company’s internal search for Renaud’s successor.

(Editor’s note: Do CFOs unfairly take the blame for poor corporate performance? Are finance chiefs the scapegoats-of-choice for the busted economy? Read “CFOs: The New Patsies.”)