Here was a time when European Chief Financial officers could dare to adopt a holier-than-thou attitude when it came to accounting and corporate governance matters. The most notorious scandals, such as Enron Corp. and WorldCom, were American, after all. And even the accounting errors at Dutch retailer Royal Ahold stemmed from its U.S. subsidiary.
Then the perp walk came to Europe. The collapse of Italian dairy giant Parmalat and the arrest of its former finance director Fausto Tonna have made accounting scandals front-page news across the Continent and sent a chill through financial markets. The sheer scale of the alleged fraud at Parmalat -- the use of forged documents and a web of offshore accounts to hide debts of more than E14 billion ($17.6 billion) -- has shocked regulators and prompted investors to demand greater disclosure by companies.
And lest anyone think that Parmalat was an isolated example, the revelation that Royal Dutch/Shell Group had overestimated its oil and gas reserves by more than 20 percent showed that not even the bluest of blue chips was beyond suspicion. Judith Boynton was forced to resign as the group's CFO in April after an internal investigation revealed that senior executives had known of the reserves problem for nearly three years.
Europe's CFOs, who didn't have an easy job to begin with, are now being subjected to the same intense scrutiny as their American counter- parts. The harsh spotlight on these executives comes at an already difficult competitive juncture. Unlike their counterparts in the U.S. and Asia, where economic growth is accelerating strongly, these executives face a European economy that remains sluggish. And the dollar's weakness against the euro has depressed overseas earnings.
Earnings for the 541 companies in the MSCI all-countries European index are forecast to rise by 19.6 percent this year, compared with actual growth of 16.3 percent last year, according to Thomson Datastream. That growth, albeit welcome, lags well behind the surge in the U.S., where earnings continued to rise in the first quarter at the same torrid 27 percent pace as they did in 2003.
It's a harsh environment, to be sure. But the tough climate only serves to make the leading financial officers stand out all the more. To find out who the top performers in Europe are, Institutional Investor asked fund managers and securities analysts across Europe and across the world to identify the best CFOs from among the companies that they invest in or follow. II's top European CFOs were selected based on the responses of research analysts and portfolio managers at more than 180 money management firms and industry analysts at 48 brokerage firms. Altogether, we list winners in 31 industry sectors. In the pages that follow, we also highlight a handful of the leading vote-winners. (A list of all the winners appears in the table below. A complete accounting of CFOs who received votes can be found on our Web site, at www.institutionalinvestor.com.)
Not surprisingly, what makes a CFO stand out these days, first and foremost, is the ability to deliver the goods with reliable and informative accounts. As Alan Thomson, chief financial officer of Smiths Group, who ranks first in the Aerospace & Defense sector for the second straight year, puts it: "You spend your time building yourself an accounting reputation. It's the basic thing you absolutely have to do. If you don't get the numbers right in my job, everyone forgets about everything else very quickly."
Investors value access to corporate decision makers and no-holds-barred candor more than ever. And all of the top-ranked CFOs share a reputation for openness and integrity. The winners deliver, spending on average between one quarter and one third of their time meeting with their major investors.
"The most important qualities a CFO can have -- loyalty to shareholders, honesty in reporting and an uncluttered vision of the future -- have not changed with time," says Jean-Pascal Beaufret, chief financial officer of French telecommunications equipment maker Alcatel, selected first in Telecommunications Equipment. Adds Ann Godbehere, who took over as finance chief at Swiss Reinsurance Co. one year ago and places first in the Insurance category, "We are rebuilding investor confidence and demonstrating that we will deliver on our promises." She made 60 presentations to investors across Europe in April, explaining the group's 2003 results -- it posted its first profit since 2000 -- and discussing the reinsurance outlook.
"That's what is clearly needed in a CFO -- someone who very clearly says what's important and what's not," says Patrick Lemmens, a fund manager at ABN Amro Asset Management in Amsterdam. He praises HSBC Holdings' Douglas Flint, ranked first among Banks CFOs, for his "no-bullshit nature. He will very clearly describe where he sees challenges."
Flint gathers together all of HSBC's divisional finance chiefs once a year to meet with the bank's biggest institutional shareholders, giving those investors a rare and valuable opportunity to look deep into the group's far-flung operations. And it's not just internal developments that interest investors. The insights that Flint can offer by virtue of HSBC's activities in so many economies around the world can give his presentations much broader impact. "If you're a global investor, that's extremely interesting," says Lemmens.
Many top CFOs stress simplicity as the best means of providing transparency in company accounts. It's a strategy that goes down well after the shenanigans at Enron and Parmalat, which used an array of special-purpose funding vehicles and offshore accounts to obscure their true financial health.
What you see is what you get at Groupe Danone, stresses CFO Emmanuel Faber, who finishes first in the Food Producers sector. "This is a simple business where we sell billions of liters of yogurt and billions of pounds of biscuits," he says. "There are no complex long-term liabilities or assets that require extra regulatory attention."
At Smiths Group, a company that has transformed itself with a string of acquisitions and disposals in recent years, CFO Thomson prominently reports the percentage of operating profits turned into cash after capital spending. The cash ratio was 88 percent in the first half, well above Smiths' minimum target of 80 percent. "You can't fiddle around with cash," says Thomson.
No amount of simplification can do away with the need to comply with ever-more-intrusive regulations, though. Finance executives spend much more time these days ensuring that their companies meet today's tighter accounting and governance rules. "The proliferation of regulations makes life more hectic than before," says Alcatel's Beaufret. "The new rules are ensuring better information gets to investors in a more timely fashion than in the past. Because they are useful, I regard meeting the new standards as no more than a normal part of a CFO's duty."
The need to regain investor confidence is universally acknowledged. Nevertheless, CFOs grumble increasingly loudly about the burden of many rules, particularly the extensive certification of corporate decision-making mandated by the Sarbanes-Oxley Act in the U.S.
"I question whether certification in and of itself brings any extra value or comfort," says Swiss Re's Godbehere. "It brings cost."
Smiths Group's Thomson expresses concern that increasing regulation could end up actually reducing transparency by pushing companies to focus on formal compliance rather than improving the substance of their communication. "It's going to become boilerplate stuff," he says. "Everybody's going to say the same thing because it's mandated." The grumbling about regulation is just that at the moment. Corporate executives recognize the need to be seen to play by the rules in today's scandal-rich climate, even if they deplore the heavy cost of compliance. But they clearly aim to sow the seeds now for a rolling back of the regulatory burden when conditions allow.
"I hope that when markets have restored credibility and confidence is stronger, people can reflect on whether the regulatory arrangements can be moderated," says Flint. "Business is about taking risks and getting more right than wrong. It's not about avoiding risk."
For now, however, HSBC, like other companies, is doing its best to be a model of compliance. For European companies, that increasingly means preparing to file their accounts under International Financial Reporting Standards promulgated by the International Accounting Standards Board, which European Union laws will require beginning in 2005.
HSBC plans to publish historic IFRS accounts alongside its U.K. generally accepted accounting principles accounts at the end of this year to prepare investors for the changeover in 2005. The change will require companies to amortize goodwill against profits, a potentially important difference for a company that has made as many acquisitions as HSBC.
"How you account for it is kind of irrelevant to the economic situation of the company that paid the goodwill," notes Flint. "I think we have a fair degree to do to make sure that's understood."
Smiths Group's Thomson worries that the move to IFRS will "test our ethos on cash." The company writes off all of its research and development against profits currently, but IFRS will allow it to amortize a big percentage of that spending. Such a change could enable the company to boost its reported profits by 20 percent a year, he says, but Smiths would have to lower its cash generation target to 70 percent from 80 percent.
The company also plans to report its results in U.K. GAAP and IFRS in 2004, just as it complied with the U.K.'s Financial Reporting Standard 17 on pension fund accounting in 2003, a year early. "You've got to spend time educating the community," says Thomson. "You've got to be proactive on these things."
There are signs that such a forward approach is definitely needed. Some investors express concern that recent scandals have made corporate executives more tight-lipped in general, making it harder for them to glean useful insights. "In general, companies are a bit more cautious about what they say. There's a bit of fear they might incriminate themselves," says Brian Farrell, a fund manager at Pioneer Investment Management in Dublin.
Some CFOs, meanwhile, see tighter regulation of securities analysts producing similarly pernicious results. U.S. regulations making analysts liable for their opinions, adopted as part of the settlement of conflict-of-interest allegations made by New York State Attorney General Eliot Spitzer, have "led to less authenticity, with excessive caution toning down personal conviction," contends Danone's Faber. The result makes life more difficult for "shareholders as they try to come to well-considered investment decisions."
European rules haven't had such a chilling effect. Beginning in July, Britain's Financial Services Authority will require securities firms to state which research they consider objective and publish their policies for avoiding conflicts of interest, a much less prescriptive approach than that taken by U.S. regulators. But the successful E30 million judgment won by LVMH Moët Hennessy Louis Vuitton against Morgan Stanley for allegedly biased research by its luxury goods analyst, Claire Kent, does threaten to muzzle analysts in the way that executives like Faber fear.
Regulations aside, executives have to keep their eyes on the business. It's not an easy job. The underlying European economy remains mostly weak -- the euro area will grow at a rate of only 1.6 percent this year, compared with 3.1 percent for the U.K. and 4.7 percent for the U.S., according to the Organization for Economic Cooperation and Development. Global competition continues to intensify, and currency swings and rising interest rates threaten to tighten financial conditions. The tough climate has put a premium on being disciplined with corporate cash and rigorous in evaluating potential acquisition targets.
Swiss Re's shares fell 4 percent on May 17 after the company announced that the dollar's decline and other exchange-rate movements had reduced the embedded value of its life and health insurance business by more than Sf800 million ($644 million) in 2003, to Sf16 billion. The decline in embedded value didn't affect the company's earnings outlook, Godbehere says. Indeed, Swiss Re's embedded value earnings nearly tripled in 2003, to Sf1.1 billion, reflecting strong gains in equity and bond markets last year. Getting that message out in today's more-jittery markets isn't easy, though. London-based WPP Group, which has grown aggressively via acquisitions to become the world's largest advertising company, has adopted a more-conservative profile since acquiring U.K. ad agency Cordiant Communications last year for £276 million ($491 million). The company is spending one third of its free cash flow on dividends and share buybacks (it has repurchased 1 percent of its shares this year), one third on capital expenditure and one third on small acquisitions in growth markets or niche areas, such as direct marketing, says chief financial officer Paul Richardson, who wins the Media sector.
"Management got deceived in the boom because the stock market valued any earnings-per-share growth, be it acquired or organic, in the same way," he says. "It came back to haunt us all. Cash generation, cash EPS, organic growth, improving return on capital employed and margin improvement are what matter now. The market is not forgiving of the 80 percent of acquisitions that promise success and ultimately fail."
At Swiss Re, Godbehere has set up what she calls "the cockpit" to rigorously evaluate how potential acquisitions or expansion plans would be viewed by four key constituencies: internal risk auditors, ratings agencies, statutory-legal entities and regulators.
"I don't want to be a roadblock to the business. I want to be a measured risk-taker, and my job is to figure out how to finance the business," Godbehere says. "But in figuring out how to finance the business, I have to prioritize what are the best opportunities to build a franchise." Smiths Group has returned to the acquisition trail this year after spending the past three years focusing on divestitures. The aerospace and engineering company bought five small U.S. companies in March and April and is looking to spend £500 million a year on acquisitions in the next few years. But CFO Thomson insists that any acquisition, like any internal expansion, must generate a 12 percent aftertax return within three years. Just to make sure, he sends finance staff -- Thomson calls them his "mafia" -- throughout the company to ensure that those guidelines are enforced.
Alcatel makes a quarter of its sales in the dollar or related currencies and has tried to respond to the dollar's weakness by sourcing more products in dollars at the margin. The company's sales fell by 3 percent in the first quarter of this year, but if the dollar hadn't declined over the past year, sales would have been up by 2 percent. Although currency moves complicate his task, finance director Beaufret contends that the fundamental drivers of technology and global competition are far more critical to the company. "The reduction in prices for telecom equipment and the increasingly intense competition we are running into is much more important than any short-term hit we might take in currencies," he says. "Interest rates, deficits and currency fluctuations are of considerably less importance to the pickup of the global economy than are the kinds of gains in productivity we are seeing at companies throughout the world. That will bring back solid economic growth in the not-too-distant future."
Rising interest rates have hit financial-sector stocks in particular in recent months, though, as investors worry about possible losses on fixed-income portfolios and a potential rise in nonperforming loans. The market's bearishness frustrates Godbehere. "We have been anticipating rising interest rates for some time, and we have our investment portfolio positioned to take advantage of rising interest rates," she says. "At this point we are saying rising interest rates are good." HSBC's Flint also insists that higher rates are good on balance if they reflect strong economic growth. But when it comes to market sentiment, he adopts a more philosophical view.
"It's a brave man who can understand why markets react to a particular situation," he says. "It's not something we spend a lot of time analyzing. We build our business for the long term."
And that, it seems, is just what all investors want to hear.
DOUGLAS FLINT
HSBC Holdings
Age: 48
Year named CFO: 1995
Company employees: 232,000
12-month stock performance:+23.81 percent
Annual salary: £1.06 million ($1.89 million)
Stock options: £2.74 million*
Flint: "Business is about taking risks and getting more right than wrong. It's not about avoiding risk."
One voter: "He's always very clear in his explanations of what's happening, and he's consistently reliable in what he says about the company."
When HSBC Holdings spent $13.2 billion to acquire Household International last year, some analysts and investors worried that the U.S. consumer lender would take HSBC too far down-market and increase earnings volatility. One year later most of those analysts and investors regard the deal as a masterstroke. Household alone generated 57 percent of the $3.2 billion increase in pretax profits at HSBC last year.
Much of the credit for winning over the market goes to Douglas Flint, a former KPMG partner now in his tenth year as CFO, who helped negotiate the acquisition alongside chairman John Bond and who has worked diligently to sell investors on the merits of the deal. "He's always happy to see us," says an analyst at one major U.K. fund manager. Flint earns high marks not only for his depth of knowledge of the industry -- a sine qua non for top CFOs -- but also for opening up the company to detailed scrutiny. Each year, Flint invites about 20 top investors to meet with him and the finance directors of all of HSBC's subsidiaries. "I know of no other company that does that," says one analyst.
Speculation about a new round of global banking consolidation has flourished following J.P. Morgan Chase & Co.'s purchase of Bank One Corp. and Bank of America Corp.'s acquisition of Fleet Boston Financial Corp. But Flint plays down the hype and insists that HSBC can drive growth by pursuing synergies among the group's acquisitions of recent years, including Household and Republic New York Corp. in the U.S. and Mexico's Bital Group, since renamed HSBC México. "We have a lot to do to fully realize the benefits of our geographic and product expansion. We have the option of building on what we've got," he says.
Like those of many bank stocks, HSBC's share price has been hit recently by concerns about rising interest rates, which investors fear will cause a rise in nonperforming loans. HSBC's exposure to Asian and Latin American emerging markets has aggravated the problem because those economies are viewed as highly vulnerable. Flint counters that rising rates are positive if they reflect stronger economic activity, as he believes. The vagaries of market sentiment don't keep him awake at night. -- T.B.
* Includes awards of restricted stock.
JEAN-PASCAL BEAUFRET
Alcatel
Age: 53
Year named CFO: 2002
Company employees:59,000
12-month stock performance: +59.03 percent
Annual salary:Undisclosed
Stock options: Undisclosed
Beaufret: "As a CFO in the telecommunications equipment business, you've got to invest in growth and at the same time continuously cut costs. Achieving the golden mean between the two is not easy."
One voter: "Most CFOs are either good financial technicians or good financial communicators. Beaufret is both."
Arm in arm with CEO Serge Tchuruk, Jean-Pascal Beaufret has spent the past two years halving annual expenses at French telecommunications equipment maker Alcatel. They accomplished this mammoth feat by reducing the company's workforce by 40 percent through layoffs, attrition and asset sales. The company sold 14 businesses in which it lacked critical size, among them Alcatel's battery unit and its optical component division. Alcatel used the proceeds to pay down E2.7 billion ($3.4 billion) in net debt, leaving it with net cash of E967 million at the end of last year. The efforts paid off big-time in April when the company reported its first quarterly profit in three years. Close to bankruptcy three years ago, Alcatel is expected to post a profit of E915 million this year, as sales increase by 5 percent to E13.1 billion.
"We are through the toughest part of our restructuring, but we can't forget that we are in a business of intensifying competition and ever-falling prices for equipment," says Beaufret, who served as CFO of Crédit Foncier de France and as head of France's tax administration before joining Alcatel as deputy CFO in 1999. "Dealing with that while bringing the market up-to-date technology is our biggest challenge."
Investors praise not only the cost-cutting but also the high level of transparency that Beaufret has brought to Alcatel. "In the past couple of years, he's helped reassure nervous, and not always very friendly, investors by providing more detail about such things as corporate provisions and vendor financing than any of his peers in Europe," says François Brault, a fund manager at Crédit Agricole Asset Management in Paris. "At least with this company, you've got a clear idea of the shoals that lie ahead."
That clarity does not happen by accident. "It is the first duty of a CFO to report to investors," says Beaufret. That, he says, should include "a cogent analysis of the future."
Now that Alcatel is on a stable financial footing, Beaufret will have to prove he can marshal the balance sheet for investments. The graduate of France's elite École Nationale d'Administration and former civil servant welcomes the challenge. "What I like in business is that the premium is on being straightforward, identifying problems immediately and trying to find solutions as quickly as possible," says Beaufret. "That was less the case in government, where my work was guided by political considerations more than by simple efficiency." -- David Lanchner
ALAN THOMSON
Smiths Group
Age: 57
Year named CFO: 1995
Company employees: 27,000
12-month stock performance: +4.69 percent
Annual salary:£688,000 ($1.22 million)
Stock options:£2.97 million
Thomson: "There are so many ways to play around with merger accounting, but you can't fiddle around with cash."
One voter: "He has a very strong understanding of his industry and the levers you need to drive the business."
Smiths Group has spent the past three years digesting its biggest ever acquisition, the £2 billion purchase of TI Group in 2001, by selling off more than a third of its target, including TI's auto parts and polymer businesses. Now Smiths is back on the acquisition trail, having spent $330 million on five U.S. acquisitions in March and April 2004.
Keeping track of a frequent deal maker isn't easy, and accounting abuses by companies like Tyco International have made investors wary of acquisitions. To bolster transparency, CFO Alan Thomson, who joined Smiths after three years as finance director at British building materials maker Rugby Group, relies on his favorite metric: the percentage of operating profits turned into cash after capital spending. In Smiths' first half, ended January 31, the cash ratio was 88 percent, ahead of the minimum target of 80 percent. As Thomson says, "What you get is what you see at Smiths."
Investors applaud Thomson for his detailed knowledge of Smiths' four main businesses -- aerospace, medical supplies, detection equipment and specialty engineering -- and his straightforward manner. "I find him always responsive to my questions," says Brian Farrell, a portfolio manager at Pioneer Investment Management in Dublin.
Having slashed group debt from a postacquisition peak of £2 billion to around £200 million, Smiths now is looking to spend £500 million a year on acquisitions. But the company must demonstrate that its strategy can deliver higher earnings. Earnings per share have fallen nearly 13 percent over the past two years. The purchase of TI and its Dowty Group subsidiary increased Smiths' exposure to civil aviation just as the market entered a sharp downturn, and though the outlook for detection equipment, such as x-ray units for screening everything from airline passengers to shipping containers, is promising, operating profits fell by 57 percent in the first half compared with a banner period last financial year. "We've got to prove to the market that we can add value," Thomson concedes.
The weak dollar has made life difficult for Thomson. Smiths derives more than half of its sales and profits from North America, and the dollar's decline cut profits by £20 million last year. But the company doesn't plan to reduce its U.S. exposure, in part because half of its shareholders are located there today, versus less than 10 percent three years ago. "We spend between a quarter and a third of our time in America" seeing investors and looking for acquisitions, Thomson says. Would a U.S. listing then make sense? "Our U.S. shareholders say, 'You don't need it.'" And he listens to them. -- T.B.
ANN GODBEHERE
Swiss Reinsurance Co.
Age: 49
Year named CFO:2003
Company employees: 8,000
12-month stock performance:1.19 percent
Annual salary: Undisclosed
Stock options: Undisclosed
Godbehere: "It's been a question over the past year: 'How does it feel to be CFO of Swiss Re, of a Fortune 500 company, and you're a woman?' But I really don't feel it."
One voter: "She has a financial grip on the company and explains it well to the market."
After just one year in the job, Ann Godbehere -- Swiss Reinsurance Co.'s first female CFO and one of few women to hold the top finance job at a major European corporation -- has earned investor and analyst trust as a plain-talking Canadian who tells the Swiss Re story like it is. "The big thing is to establish credibility immediately," she says. "Establish credibility and respect, and you're there."
To that end, Godbehere has spent a great deal of her first year as CFO meeting with investors, analysts and ratings agencies. "We are rebuilding investor confidence and demonstrating that we will deliver on our promises," she says.
"She seems very strong. She expresses her views on different things. She dares to take a standpoint on issues. That plays quite well," says analyst Stefan Löhr of Brummer & Partners, a Swedish hedge fund, which runs $3.7 billion.
Communication is especially important for a company that in 2003 posted its first profit since 2000. The world's second-biggest reinsurer reported a Sf1.7 billion ($1.37 billion) profit, and Godbehere says profits in 2004 could top Sf2 billion. Swiss Re lost Sf91 million in 2002 and Sf165 million in 2001 when results were hit by reserves for equity portfolio losses and claims stemming from the September 11, 2001, terrorist attacks. The stock has remained under pressure, dampened by a downgrade to AA by Standard & Poor's last year and a slower-than-expected earnings recovery. Swiss Re's shares fell 4 percent on May 17 -- a down day for insurance stocks -- when it revealed a 1.8 percent drop in the embedded value of its life and health business, owing to a weak dollar. The stock has since rebounded.
Godbehere joined Swiss Re in 1996 when it acquired Canada's Mercantile & General Reinsurance Group, where she had held a number of management positions. She has worked as the chief executive of Swiss Re's Life & Health Canada, CFO of Life & Health group and CFO of property and casualty.
In her latest job she has revamped the finance operation, appointing a group treasurer, and created a stronger corporate finance treasury function. Godbehere also established what she likes to call "the cockpit," to evaluate new opportunities. Every business plan is reviewed with an eye to how it would be seen by internal risk auditors, ratings agencies, statutory-legal entities and regulators.
"I don't want to be a roadblock to the business," Godbehere says. "But in figuring out how to finance the business, I have to prioritize what are the best opportunities to build a franchise." -- Alison Langley
EMMANUEL FABER
Groupe Danone
Age: 40
Year named CFO: 2000
Company employees: 89,000
12-month stock performance: +20.32 percent
Annual salary: E752,800 ($945,291)
Stock options: E4.8 million*
Faber: "We look at the finance function as a tool that can be used for seeing where the company is going. Too often finance focuses just on looking at the present."
One voter: "Faber's ability to get the right numbers and analyze them correctly means Danone doesn't spring negative surprises on the market. He is the best CFO in the food sector at managing expectations."
Despite becoming CFO four years ago, Emmanuel Faber has held on to the job that brought him to Groupe Danone in 1997: principal adviser to CEO Franck Riboud on strategic matters. He sees a natural synergy between managing Danone's finances and overseeing the food manufacturer's strategy and development unit.
"My biggest worry is that as a company we won't understand how long-term consumer and retail trends are evolving," says Faber, a former Baring Brothers investment banker who graduated from Paris's École des Hautes Études Commerciales in 1986. "Financial reporting, however, contributes to my understanding of changes by painting a clear and comprehensible picture of what's happening here at Danone through timely and accurate numbers."
Faber's figures may or may not help identify the next trend in yogurt, but they underlie sales and earnings forecasts that win particular praise from investors. "His guidance is spot-on and gives Danone huge credibility in the market," says Andrea Puccini, a portfolio manager at Milan's Fideuram Capital, which has E30 billion under management.
One reason for the accuracy of Faber's forecasts -- he's predicting profits of E923 million on sales of E13.8 billion to E14.1 billion for 2004, up 10 percent and 5 percent, respectively, from 2003 -- may be the relatively simple mix of Danone's operations. With only three divisions -- focused on dairy, biscuits, and snacks and beverages -- Danone is considerably less complicated than such rivals as Nestlé and Unilever, which produce hundreds of items.
Given the group's straightforward composition, Faber hopes postEnron Corp., post-Parmalat accounting rules don't make life too complicated. "This is a simple business where we sell billions of liters of yogurt and billions of pounds of biscuits," he says. "There are no complex long-term liabilities or assets that require extra regulatory attention."
After Riboud, Faber is arguably the man most responsible for the group's focus. As head of strategy and development for the past seven years, he has helped select the E15 billion in divestitures and purchases that have made Danone Europe's fastest-growing food business. -- D.L.
* Rounded figure includes E1.23 million exercised and a total of E3.54 million granted.
Picking the top CFOs
Institutional Investor's top European CFOs were selected based on the responses of research analysts and portfolio managers at more than 180 money management firms, controlling an estimated $2.49 trillion, and industry analysts at 48 brokerage firms to the following question: Whom do you regard as the best CFO in the sector (or sectors) for which you're responsible? Those polled included buy-side analysts and money managers who voted in II's 2004 All-Europe Research Team and the sell-side analysts who received any votes. Respondents were asked to name their first, second and third choices for best European CFO; the responses were weighted to produce a score for each candidate. We named a top CFO in 31 of the 32 industry sectors that we survey for the All-Europe team. In one category, Business & Employment Services, no CFO met the minimum vote threshold to qualify.
Our European CFO ranking was compiled by Institutional Investor staff under the direction of Assistant Managing Editor for Research Lewis Knox and Senior Editor Jane B. Kenney with Researchers Darline Augustine, Russell Bradley-Cook and Anastacio Teodoro IV.