good morning. Shipping giant is looking for a new CFO.
UPS (No. 37 on the Fortune 500) announced Monday that Brian Newman, who has served as CFO since 2019, will retire on June 1 for health reasons.
“I am honored to serve as CFO of such a storied company with so many great leaders around the world,” Neumann said in a statement. “I am confident in the continued success and growth trajectory of the company. My immediate priority is to focus on my health.”
Prior to joining UPS, Newman spent 26 years at PepsiCo, where he held financial leadership roles including vice president of global operations for PepsiCo and launched initiatives such as PepsiCo's global e-commerce business. Newman, a dual citizen of the United States and Ireland, began his career as an investment banker working for Paine Webber in New York City.
UPS CEO Carol Tome said in a statement that Mr. Neumann has been a “great partner” who has guided the company through unprecedented economic times. He added that Mr. Newman leaves the company in a “good position” as UPS continues to execute on its “1+2 strategy” focused on growing sales and profits and improving operating margins.
UPS said in its announcement that it will evaluate internal and external CFO candidates to replace Mr. Neumann. The new finance director will be a strategic partner to Tomé, who served as CFO for many years. Prior to joining UPS, he spent nearly 25 years at Home Depot, where he held the CFO position for 18 years.
Tomé retired as Home Depot's chief financial officer in 2019 and has remained on the board of directors at UPS since 2003. But in 2020, as the pandemic raged, she came out of retirement to run UPS as the first female CEO in the company's history. The move gives the company a powerful CEO and luck's “Most Powerful Women” list.
During his tenure as Home Depot's CFO, Mr. Tome helped increase the company's shareholder value by 450% and is credited with guiding the company through the 2008 recession. “We've found that the answers to all the strategic questions that businesses face can be found by listening,” Tomé said. luck “During my free time at night and on weekends, I wore an apron to work.” [Home Depot] shop. ”
Tomé' therefore appears to play a key role in UPS's search for a new CFO. “Regardless of whether a company needs a new CFO, having a former CFO on the board is a huge asset,” says Sean, president and founding partner of Cowen Partners, an executive search firm focused on C-level executives. Mr. Cole told me.
But there are also potential drawbacks. “Former CFOs have a habit of copying themselves,” Cole said. That can backfire if a company doesn't fit the profile of a CFO candidate it's looking for, he said. Cole says the key is to be open-minded.
Whoever is chosen as UPS's next CFO will have a lot of work to do. The delivery giant released its first-quarter earnings report on April 23, and the company's “overall performance was in line with our expectations,” Neumann said in a recent LinkedIn post. . Revenue was $21.7 billion, a decrease of 5.3% compared to the first quarter of 2023. Earnings for the quarter were $1.43 per share, down 35% from the year-ago period.
The company narrowly avoided a labor strike last year by brokering a deal that gave UPS employees higher wages and better working conditions. (In the first quarter of 2023, before union negotiations, sales exceeded $100 billion for the first time since the company was founded.) UPS plans to cut 12,000 jobs, mostly in management positions. The company aims to grow sales from $108 million to $114 billion by 2026 and increase operating margins to more than 13%. We recently won a major contract with the United States Postal Service.
“The small package industry is poised to emerge from a difficult market in 2023 and return to growth in 2024 and beyond,” Tomé said of the company's strategic initiatives in a March statement.
Cole said UPS has ambitious financial goals in a turbulent economy and competitive field. In his assessment, a CFO “must have an ambitious personality and be a strong leader, and management, including the CEO, must be comfortable with such a personality.”
Mr. Cole hired a finance director for another Fortune 50 distributed services business with a large membership and said it was a good idea to hire someone with expertise in financial areas such as financial planning and analysis. This is the direction I want to go in,” he added.
Cheryl Estrada
sheryl.estrada@fortune.com
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María Soledad Davila Calero oversaw the Leaderboard and Overheard sections of today's newsletter.
Leader board
Susan Healy Mr. Healy has been appointed executive vice president and chief financial officer (CFO) of casual shoe maker Crocs Inc. (NASDAQ:CROX), effective June 3. Mr. Healy succeeds Anne Melman, who was recently appointed president of the Crocs brand. Healey is a marketplace for car buyers and sellers. He joined Crocs, Inc. from IAA, Inc., where he served as CFO, and his $7 billion with Ritchie Bros. Auctioneers Incorporated. He led the company through a merger. Prior to IAA, Healy served as Vice President of Finance for Ulta Beauty.
Chris Zitch He has been appointed CFO of Southern First Bancshares (NASDAQ: SFST), the holding company of Southern First Bank. Most recently, Zych served as Director of Corporate Development and Investor Relations at United Community Bank. Prior to that, he was Manager Strategy and Management Reporting at First Citizens Bank.
big deal
The pace of U.S. corporate bankruptcies has accelerated since the beginning of the year, with 210 bankruptcy filings recorded in the first four months of 2024, compared to the same number in 2023, according to an S&P Global Market Intelligence analysis. This is slightly lower than the 224 cases recorded during that period. .
There were 66 new bankruptcy filings in April, up from 61 in March. The report said businesses continue to feel the burden of high interest rates and may be accepting the reality that they will continue to be high for a long time.
even deeper
How financial friction hinders innovationA new report in Wharton Business Review discusses recent research that finds that financially constrained companies face a trade-off between investing in existing ideas and pursuing new ideas. “If you have an innovative new product idea, it's relatively easy to attract investors and scale it up,” said study co-author Thomas Winberry of Wharton. “But if you're still exploring ideas and don't have a concrete product to introduce, you'll need to rely on in-house resources or alternative funding sources, which can be difficult to obtain and costly.”
overheard
“What the climate and energy sector faces with AI is similar to what we face with AI in general. That's the problem.”
—Austin Whitman, CEO of the nonprofit Climate Change Project Said luck. AI's huge appetite for energy is a key issue. This technology dictates a significant expansion of power generation capacity, which has already begun.
