$3.75M Signing Bonus: The Red-Hot Competition for CFOs
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What economic signals open this episode and why do durable-goods orders matter?
Here's your Money Briefing. I'm J.R. Whalen at The Wall Street Journal in New York. Companies in Silicon Valley are learning a harsh reality when they try to hire a seasoned CFO. There aren't many of them out there. We'll speak with the editor of CFO Journal about the fierce competition in a moment. In one case, a company offered a $4 million signing bonus to their top choice. First, these money and market stories you should know. After the market downturn in last year's fourth quarter, economists were warning us of an economic slowdown coming this year in the first quarter. Well, now it looks like that slowdown could be happening now. The Commerce Department says orders for what it calls durable goods, those are manufactured products designed to last at least three years, like cars and appliances.
The orders fell 2.1 percent in April from the prior month. And the government says that such orders grew less than previously estimated in March. That paints a weaker picture of U.S. factory demand than anticipated. Now, much of that decline came from civilian aircraft, which dropped 25 percent from March following the grounding of Boeing 737 MAX airliners after two fatal crashes. Boeing didn't log any commercial orders for the planes in March or April. But Boeing isn't the only manufacturer seeing softer sales. Harley-Davidson had reported U.S. retail sales of its motorcycles fell 4 percent in the first quarter, which extends a longer sales decline. And tractor maker Deere said it would cut production by 20 percent this year.
to reflect lower demand from farmers facing the steepest downturn for the agricultural economy in decades. And the Wall Street Journal puts the spotlight on the impact of cashless establishments and payment apps. As more people in stores say no to accepting cash, apps like PayPal and Venmo and Zelle help remove any awkwardness in social circles, like people paying the bill at a group meal, for example. Less often, when out with friends, somebody will raise their hand and say, hey, I got this one. since everyone can pay their fair share down to the penny via the app. And while cashless shops can make things easier by just allowing a customer to swipe their credit card, some feel it raises a feeling of unfairness.
How are cashless stores and payment apps changing consumer behavior and fairness concerns?
In fact, consumer advocates and some lawmakers argue not accepting cash effectively discriminates against poorer customers who may not have smartphones, credit cards, or bank accounts.
Many startups in the Silicon Valley are ready to graduate to the big time. That is, they want to enter the public markets. Seems easy enough, but many companies are discovering that finding the right executive, especially to sit in the CFO chair, is a lot harder than some expected. It's a story in the CFO Journal, and editor Jack Hagel is here to discuss. So Jack, these companies are looking for more than just a textbook CFO or chief financial officer. They want a seasoned executive, obviously with financial skills,
but a lot more than that. As you know, there's this rise of these high-valued tech startups. They're complex. They're very high profile. And they're balancing this need to spend wisely while also developing their product fast enough before competitors swoop in. And so sometimes they have to change direction, too. So they've got a lot of eyes on them. And a good CFO can help them get their financial house in order and help them navigate change. But for these startups, A CFO isn't just any executive. A lot of people read into this decision in large part because when a startup hires a CFO, it can signal to the market that maybe they're interested in going public. And so they want to get it just right. But the wish list is enormous.
And the CFO position, whether it's in the tech sector in Silicon Valley or anywhere, has become a much more complex position.
Over the years, the CFO role has expanded to become more than just a financial position in the traditional sense. CFOs are oftentimes overseeing IT, they're overseeing HR, they're overseeing elements of risk management.
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