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No Mark of ARS? Bristol-Myers Replaces Its CFO

Drugmaker says the change doesn't reflect its recent $275M charge. It selects Royal Numico finance chief Huet to succeed Bonfield.
Roy Harris and Stephen TaubMarch 5, 2008

Bristol-Myers Squibb said that chief financial officer Andrew Bonfield will be leaving the company “to seek new career opportunities,” and that he will be replaced by Jean-Marc Huet, the veteran finance director at Amsterdam-based Royal Numico N.V.

Bonfield will remain on the job until Huet takes over on March 31, the giant pharmaceutical company said.

The change takes place one month after Bristol-Myers took an impairment charge of $275 million on investments in auction rate securities, partly consisting of subprime mortgages for the fourth quarter. The company said at the time that it had $811 million of principal invested in ARS at year-end. Its estimated market value, however, was $419 million, reflecting a $392 million adjustment to the principal value.

The impairment charge reflected the portion of ARS holdings that the company had concluded reflect an “other-than-temporary decline in value.”

Huet will be responsible for directing and managing the company’s fiscal operations, as well as the global financial operations of the organization and its subsidiaries.

The company’s investments in ARS represent interests in collateralized debt obligations supported by pools of residential and commercial mortgages or credit cards, insurance securitizations and other structured credits, including corporate bonds. Some of the underlying collateral for the ARS held by the company consists of subprime mortgages, the company said.

In a Reuters article, a Bristol-Myers spokeswoman denied there was any link between Bonfield’s departure and the ARS write-off. “The timing of Andrew’s departure is completely unrelated to the ARS issue,” spokeswoman Tracy Furey told the wire service.

Bonfield had been with Bristol-Myers Squibb since September 2002, and was responsible for the company’s worldwide finance operation, including tax, treasury, control, investor relations, internal audit, financial shared services, global strategic sourcing, and information management. Previously, he had served as director of Finance at the BG Group PLC, an energy concern, and before that had been CFO at SmithKline Beecham, which is now Glaxo SmithKline.

In announcing Huet’s appointment as senior vice president and CFO, Bristol-Myers Squibb credited him with initiating and developing Numico’s acquisition strategy within the consolidating baby food sector, and its resulting acquisition by Groupe Danone, according to Bristol-Myers. Prior to joining Numico he was an executive director, investment banking xervices, at Goldman Sachs International in London. He also spent several years at Clement Trading in Milan, Italy, as a commercial manager.

In a press release, Bristol-Myers’ss chairman and CEO, Jim Cornelius, said the board was grateful to Bonfield, “who led the transformation of our financial organization over the last six years, and the strengthening of our internal controls following a period of significant challenges. He instituted new processes and procedures to modernize the company’s financial reporting and streamlined the global finance organization to deliver superior financial support.”

Whatever led to the decision to replace Bonfield, the CFO change is only the latest in a spurt of turnover at big pharma — including at Merck, Amgen, Johnson & Johnson, and Pfizer — notes Heidrick & Struggles partner and CFO Practice Lead Michele C. Heid. In an interview with CFO.com, she observed that there seemed to be no overwhelming cause, other than the coincidence of individuals reaching retirement age, although “the industry certainly has been under more pressure recently.”

She added, “These things come in waves, and often it’s coincidence,” she says. “For example, this year it’s starting to look like the year of insurance-industry turnover.”