The toughest job in corporate America

Today’s CFOs must keep one eye on the big picture and the other on the smallest details. Here are the CFOs with the sharpest vision.

Click here to view the rankings.

Few people have been more profoundly affected by the wave of regulation that followed America’s postbubble corporate scandals than chief financial officers. Beginning with the landmark Sarbanes-Oxley Act of 2002, which was designed to prevent fraud in the wake of debacles at Enron, WorldCom and other companies, new rules and laws have rained down on CFOs, requiring them to pay more attention to even the smallest details of financial reporting and accounting. Most daunting of these: Sarbanes-Oxley’s Section 404, which requires public companies to document and have audited all internal financial controls. Other regulatory hurdles include the Financial Accounting Standards Board’s Interpretation No. 48, or FIN 48, “Accounting for Uncertainty in Income Taxes,” which requires corporations to determine the likelihood of any tax claim surviving a challenge from Internal Revenue Service auditors, and a Securities and Exchange Commission rule requiring a more detailed accounting of the compensation earned by a company’s top executives and members of its board of directors; both rules took effect in December.

The mounting regulatory weight is forcing CFOs to focus on spreadsheets and audits just as many had begun to broaden their horizons beyond finance alone. As more companies emphasize efficiency, tight supply chains and acquisitions that create value through cost cuts, CFOs are taking on more strategic and operational roles inside companies, to the point of being regarded as CEOs-in-waiting. But their hopes of transcending the numbers are increasingly tempered by having to be intimately involved in how financial performance is measured, recorded and reported.

“CFOs are stretched at both ends of the spectrum,” says Randall Mays, finance chief at media giant Clear Channel Communications. “We’re expected to be far more strategic, but due to regulatory demands we also have to be far more hands-on and detail-oriented.”

Mays is one of the finance officers who is as adept at handling the minutiae as he is the big picture, according to investors who responded to Institutional Investor’s fourth annual survey of America’s Best CFOs. He places first in the Radio & TV Broadcasting category.

II polled portfolio managers and analysts at more than 400 of the world’s biggest and most influential money management houses, retirement systems, foundations and endowments to find out who they consider the best financial executives in the country. The nearly 800 respondents, representing $6.3 trillion in U.S. equity assets under management, listed their top choices in the industry sectors they are responsible for. The ranking of the top CFOs in 60 industry sectors appears on page 42.

This year, we have chosen to pay special attention to winning CFOs who are relatively new to the job -- those who have been their firm’s top financial executive for five or fewer years -- and asked them what it has been like to take the helm at a time of sweeping change. Individual profiles of these executives are found on the surrounding pages.

Many of the honorees echo Mays’s remarks about new rules and regulations spurring them to spend lots of time -- perhaps more than they expected -- on number crunching and less on the strategic efforts that CFOs have also been taking on in recent years.

“I’m more involved in compliance issues and more technical accounting issues than I was in the past,” says C. Christopher Gaut, Halliburton Co.'s CFO since 2003 and a first-place winner in the Oil Services & Equipment category. Gaut cites a raft of FASB missives in recent years -- including those setting out new policies regarding fair-value accounting, derivatives accounting and pension obligations -- as contributing to the shift in focus.

Fortunately, there are some signs that the regulatory wave may be cresting. Indeed, CFOs see a bit of relief coming in the form of a December proposal by the Public Company Accounting Oversight Board, the self-regulatory body for auditors created by Sarbanes-Oxley. The proposal would allow them to take a “risk-based” approach to certifying internal controls under Section 404. Following the close of the comment period on February 16, the board will determine whether to make this proposal a permanent rule. (Any final rule adopted must be submitted to the SEC for approval.) If approved, the new standard will encourage auditors to concentrate on what the Pcaob calls the “most important matters” when reviewing controls, thereby increasing the likelihood that they won’t get so bogged down in details that they miss major issues that could result in misrepresentation of the financial statements; however, the board has not defined what it means by “most important matters.”

“Focusing on the big things should reduce the amount of time for auditors,” says Carnival Corp. CFO Gerald Cahill, whom voters judge as tops in the Leisure sector this year.

And any respite from the rapidly changing legal and compliance environment would allow CFOs to get back to helping their companies thrive and grow. Many long to delegate the gritty details of accounting and embrace the emerging strategic side of the job.

“My role is evolving, as it is for other CFOs,” offers Gary Perlin, finance chief for credit card titan Capital One Financial Corp., who takes top honors in the Specialty Finance sector. These days he relies on his treasurer and controller to deal with more day-to-day financial management so he can spend more time helping CEO Richard Fairbank enhance the overall value of the company. That means making sure that Capital One has a well-articulated strategy, establishing performance benchmarks that show progress and making sure the market knows where the company is going and how it is going to get there, he says.

Clear Channel’s Mays says his primary focus is on ensuring a smooth close to the company’s proposed buyout by a group of private equity firms, led by Bain Capital Partners and Thomas H. Lee Partners, for $26.7 billion, including the assumption of $8 billion in debt. That will be no small task, given that several major shareholders last month voiced concerns that the price of the deal was not high enough for their liking.

At Carnival, Cahill is overseeing the implementation of a unified accounting system that will enable management to more easily compare the financial performance of the company’s 12 brands with one another. He says FIN 48 is not a big concern at the moment because his company has nearly a year to prepare. (Carnival’s current fiscal year began two weeks before the new regulation took effect, so the firm isn’t required to comply until next year.) However, he concedes that the SEC’s new compensation disclosure rules, which require companies to itemize each source of income for all of its top executives and members of its board of directors, will increase the amount of time he and his staff will spend preparing this year’s proxy statement for shareholders.

Although certainly cognizant of postbubble market reforms, Capital One’s Perlin is more concerned with recent changes in bankruptcy laws, a major issue for his company because it is a big consumer lender.

“The biggest challenge is making sure the sum of the rules gives a meaningful accounting of the whole,” he says. “If there is a significant increase in [bankruptcy] filings by people, it will create a big accounting challenge for us,” he concedes.

Capital One’s strategic gamble on commercial banking -- it has acquired both Hibernia National Bank and North Fork Bancorp in the past 15 months -- means it is dealing with a host of new regulators in that business, including the Federal Reserve Board, Federal Deposit Insurance Corp. and Office of Thrift Supervision. Perhaps more important, the deals make Perlin’s company even more susceptible to hitches in the U.S. economy. Accordingly, he is very busy watching the economy and trends that affect consumer fiscal health and the shape of the bond yield curve, which has a heavy impact on the performance of Capital One’s two recently acquired banks. “I deal with a lot of outside constituencies,” he says. “Even if the accounting and regulatory worlds stood still, it would be challenging.”

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Richard Lindner / AT&T

Age: 53 * Year named CFO: 2004

Number of employees: 302,000 * Earnings: $10.3 billion

Compensation: Undisclosed * Stock options: Undisclosed

Lindner: “I’ve been in training for this position for 21 years.”

One voter: “Rick represents the best we can hope for in a CFO -- in-depth business insights, grasp of both detail and big picture, and a high degree of accessibility.”

RICHARD LINDNER HAS BEEN HAVING A LOT OF FUN AT WORK lately. Having started with the company 21 years ago, when it was Southwestern Bell Telephone, Lindner has held a series of positions -- mostly finance-related -- at Southwestern Bell, SBC Communications, Cingular Wireless and now AT&T. He has spent much of the past three years working to integrate AT&T Wireless and assisting in the management of the AT&T acquisition and assumption of the AT&T brand name. Now he turns his attention to the $85.6 billion merger with BellSouth Corp., which was completed in December.

“Three major acquisitions in three years,” he notes. “The exciting part is that those acquisitions have really transformed the company -- the assets we own and can bring to market.”

Uniting these companies and various products and services is a top priority for Lindner, who predicts annual cost savings of up to $9 billion and “significant” earnings and cash-flow growth once the integration process is complete. Additionally, Lindner is looking to start growing San Antonio, Texasbased AT&T’s top line through new technologies and competitive pricing. “If we’re able to do that in the next couple of years, we’ll produce terrific returns for shareholders,” he says.

So far, investors are impressed. “Since he’s taken the helm and was appointed CFO after the merger, he’s never failed to deliver,” says one investor. “His direction is fairly easy to follow, his rhetoric is pretty easy to understand, and his grasp of the business is good.” -- H.J.

Alfred Castino / Autodesk

Age: 55 * Year named CFO: 2002 * Number of employees: 4,800

Earnings: $1.5 billion * Compensation: $695,000 * Stock options: $2.6 million

Castino: “When the stock goes from $5.75 to 40 bucks, people make money.”

One voter: “He executes on what he says he’s going to do, he is able to dictate theses very clearly, and he’s just smart in terms of managing the channel.”

ALFRED CASTINO’S MISSION, WHEN he accepted the top financial job at Autodesk in 2002, was to make the software company more profitable and free up money to invest in growth. Autodesk had a dismal 3 percent operating margin, and the stock was trading at a split-adjusted $5.75. Five years later the San Rafael, Californiabased company’s operating margin is 22 percent, and its shares are trading above $40.

“We managed to revive growth,” says Castino, who previously held financial management positions at PeopleSoft, Sun Microsystems and Hewlett-Packard Co., among others. Autodesk has overhauled its management team, focused on where R&D dollars are invested, streamlined its cost structure and generally made the company more efficient, Castino says. The company also completed 14 acquisitions from the beginning of 2002 through 2006, including last year’s $197 million purchase of Alias Systems Corp., a Toronto-based tech firm.

So far, so good, investors say. “Autodesk -- and specifically the CFO -- has been brilliant at managing in the face of some difficult headwinds,” observes one portfolio manager.

Castino’s immediate focus is on ensuring that the company’s new 3-D-model-based design software is rolled out properly even as he keeps an eye on Autodesk’s expansion in emerging markets such as India and China. “We are growing very quickly in emerging geographies,” Castino says. “We just need to make sure we grow wisely, properly and efficiently.” -- H.J.

The Best CFOs

Listed here by sector and industry are the 61 financial chiefs who scored the highest when we asked portfolio managers and analysts to choose the top-performing CFOs in their domains.



Terrell Crews / Monsanto Co.


James Sawyer / Praxair

Paper & Forest Products

Richard Taggart / Weyerhaeuser Co.


Aerospace & Defense Electronics

Christopher Kubasik / Lockheed Martin Corp.

Airfreight & Surface Transportation

D. Scott Davis / United Parcel Service

Business & Professional Services

Charles (Lanny) Baker / Monster Worldwide

Electrical Equipment & Multi-Industry

James Gelly / Rockwell Automation

Environmental Services

Tod Holmes / Republic Services


Alan Rutherford / Crown Holdings



Laura Wright / Southwest Airlines Co.

Apparel, Footwear & Textiles

Michael Devine III / Coach

Autos & Auto Parts

Robin Adams / BorgWarner


Indra Nooyi 1 / PepsiCo

Cosmetics, Household & Personal Care Products

Clayton Daley Jr. / Procter & Gamble Co.


Jeffrey Boromisa / Kellogg Co.

Gaming & Lodging

Glenn Christenson / Station Casinos

Homebuilders & Building Products

Joel Rassman / Toll Brothers


Gerald Cahill / Carnival Corp.


Matthew Paull / McDonald’s Corp.

Retailing/Broadlines & Department Stores

Karen Hoguet / Federated Department Stores

Retailing/Food & Drug Chains

David Rickard / CVS Corp.


Darren Jackson / Best Buy Co.

Retailing/Specialty Stores

Charles Kleman / Chico’s FAS


Dinyar Devitre / Altria Group


Electric Utilities

Moray Dewhurst / FPL Group

Integrated Oil

Stephen Chazen / Occidental Petroleum Corp.

Natural Gas

Donald Chappel / Williams Cos.

Oil & Gas Exploration & Production

Louis Baldwin / XTO Energy

Oil Services & Equipment

C. Christopher Gaut / Halliburton Co.



Alvaro de Molina 2 / Bank of America Corp.


Doyle Arnold / Zions Bancorp.

Brokers & Asset Managers

David Viniar / Goldman Sachs Group


William Wheeler / MetLife


Danny Hale / Allstate Corp.

Mortgage Finance

Eric Sieracki / Countrywide Financial Corp.


Stephen Sterrett / Simon Property Group

Specialty Finance

Gary Perlin / Capital One Financial Corp.



John Milligan / Gilead Sciences

Health Care Facilities

W. Larry Cash / Community Health Systems

Health Care Technology & Distribution

Jeffrey Campbell / McKesson Corp.

Managed Care

David Colby / WellPoint

Medical Supplies & Devices

Gary Ellis / Medtronic


Kenneth Martin / Wyeth


William McKee / Barr Pharmaceuticals


Cable & Satellite

John Alchin, Lawrence Smith 3 / Comcast Corp.


Thomas Staggs / Walt Disney Co.

Publishing & Advertising Agencies

Randall Weisenburger / Omnicom Group

Radio & TV Broadcasting

Randall Mays / Clear Channel Communications 4


Computer Services & IT Consulting

Gordon Coburn / Cognizant Technology Solutions Corp.

Electronics Manufacturing Services

Forbes Alexander / Jabil Circuit

Imaging Technology Randy Furr / Adobe Systems

Internet Susan Decker 5 / Yahoo!

IT Hardware James Schneider 6 / Dell

Semiconductor Capital Equipment Robert Halliday / Varian Semiconductor Equipment Associates


Paul Coghlan / Linear Technology Corp.


Alfred Castino / Autodesk


Data Networking & Wireline Equipment

Dennis Powell / Cisco Systems

Telecom Equipment/Wireless

William Keitel / Qualcomm

Telecom Services/Wireless

Paul Saleh / Sprint Nextel Corp.

Telecom Services/Wireline

Richard Lindner / AT&T

1 Became CEO effective October 1, 2006.

2 Stepped down effective December 31, 2006.

3 John Alchin to retire effective December 31, 2007; Lawrence Smith to retire effective March 28, 2007.

4 Agreed on November 16, 2006, to be taken private.

5 Company announced December 5, 2006, that Susan Decker will step down and will head the advertiser and publisher group.

6 Stepped down as CFO effective January 1, 2007.


Nearly 800 analysts and portfolio managers at more than 400 money management firms responsible for investing $6.3 trillion in U.S. stocks participated in selecting Institutional Investor’s list of America’s top CFOs. These asset management professionals were each asked a simple question: Who is the best CFO in the sector (or sectors) for which you are responsible? The respondents gave their first, second and third choices, which we weighted to produce a score for each CFO. We name a top CFO in each of the 60 industry sectors surveyed for the 2006 All-America Research Team.

In the profiles that accompany the CFO ranking, the compensation shown consists of salary, bonus and other remuneration for 2005, unless otherwise indicated. Similarly, the amount given for stock options comprises the value realized from options exercised in 2005 combined with that of unexercised, in-the-money options outstanding. Those figures come from the companies’ most recent proxy statements. Unless otherwise noted, company earnings are for 2006 and are unaudited.

Our CFO ranking was complied by II staff under the guidance of Assistant Managing Editors Sathya Rajavelu, Tom Johnson and Justin Schack and Senior Editor Jane B. Kenney, with assistance from Associate Editor Michele Bickford.