These days CFOs seem to exit their jobs even before the ink is dry on their business cards, which is all the more reason to applaud a handful of veterans who are retiring after long tenures. Among them: Robert Wayman, 61, who retired from Hewlett-Packard in January after 37 years with the company; Bob Brust, 63, who retired in February after 7 years at Eastman Kodak and 31 years at General Electric; and Judy Lewent, 58, who recently announced plans to retire in July after 17 years as Merck's CFO.
"How long you stay with a company depends on how many learning opportunities are available," says Wayman, who spent 23 years as HP's CFO.
In all three cases, these CFOs stayed in their posts longer than expected in order to help their companies through troubled times. "Kodak was going through a huge transformation from film to digital electronics," says Brust, so he extended his contract and abandoned his goal of retiring at 60 to make sure that the downsizing and restructuring went smoothly. Wayman stayed on at HP when Carly Fiorina was forced out in 2005. He served as interim CEO before Mark Hurd was hired, then postponed his retirement at Hurd's request. "I held off retirement for four years so that Mark could have stability in the CFO chair," he explains. Lewent postponed her retirement until Merck started to rise from the rubble of the Vioxx debacle, which resulted in more than 27,000 lawsuits. A spokesman says Lewent had been considering retiring for some time, but wanted to make sure Merck was stable before exiting. (Given the company's recent high-profile loss in one of those lawsuits, she may need to stick around longer.)
Brust adds that even without a crisis to handle, it takes time to implement good ideas. "If you stay with a company for only three years," he says, "you never get to see whether the decisions you made were good or bad; it usually takes five to seven years to really see the results."
Will MyCFO Pass the Smell Test?
MyCFO Inc. may be defunct, but its huge tax-shelter scheme for wealthy investors continues to leave its backers — who included Cisco CEO John Chambers and Netscape co-founder Jim Clark — in the hot seat.
Initially set up in 1999 to provide wealth-management services for multimillionaires, the Mountain View, Calif.- based MyCFO morphed into a tax-shelter engine. The main shelter was a Custom Adjustable Rate Debt Structure that offered a 30-year bank loan of $50 million to $100 million to a foreign party. The loan was assumed by MyCFO clients, who ultimately claimed it as a tax loss. The Internal Revenue Service invalidated the approach in 2002 because it lacked a non-tax-related economic purpose and didn't put clients at risk. But now the Manhattan U.S. attorney's office is investigating MyCFO employees, and most of the company's clients are challenging the IRS's decision in court.
"People are waiting with baited breath," says Tom Ochsenschlager, vice president of taxation at the American Institute of Certified Public Accountants, "because, if the case is ultimately decided by the Ninth Circuit Court of Appeals, many observers believe the decision will turn on the economic-substance doctrine that several other circuits have used to decide against taxpayers."