CFO Studio Magazine with David Chambers, CFO, Jaguar Land Rover NA

3rd QUARTER 2016 WWW.CFOSTUDIO.COM 37 small-cap private equity space are often the original company founders, who are very entrepreneurially oriented, and unaccustomed to not having total control of the company. The CFO often finds him- or herself addressing the CEO’s emotional adjustment. Finally, the group brought up the topic of job security. “I was surprised it took so long to get to this,” remarked Mr. Reba, as the CFO is usually in the most tenuous role, particularly at a private-equity-backed company where management and other changes occur every four or five years. He explained, “Whenever an ownership change occurs, there is a chance of a change in management, and often it is a new CEO or a new PEG who wants to have their person in the CFO role. But that is no longer as automatic as in the past. “I am thrilled when a decision is made to keep a strong management team in place,” said Mr. Reba. Still, for many, the risk of having to look for a new job after only four or five years is outweighed by the reward that comes with a successful exit for the PEG. “Usually the CFO has been incentivized with a piece of equity and can realize a nice payday,” said Mr. Reba. The cash compensation/equity ownership trade- off with accompanying risks and rewards is more commonly seen in the private equity space than in other arenas. Furthermore, Mr. Reba added, “If you did a good job, if you were successful and increased value, an active private equity firmmay likely have another opportunity for you.” Mr. Reba noted that over the course of his career he has worked in private, public, and private-equity- backed organizations and particularly enjoys working in the small and middle markets when a PEG is involved. “In addition to the financial leader sitting in a prime position to create value for the company, the ability to leverage the financial and operational capabilities of a strong PEG makes coming to work every day a fun assignment for the CFO.” Rules for Success As the discussion wound down, Mr. Reba took a moment to share his rules for being successful as a CFO at a company that is owned by a PEG. “First and foremost,” he said, “transparency.” He continued, “If there is bad news, inform the PEG immediately. It won’t get better with time, and nobody likes surprises.” Second, Mr. Reba said, “keep an eye on the amount of cash and watch bank covenants.” Finally, Mr. Reba encouraged CFOs at companies with private equity owners to be on top of their numbers. “Be aware of how you are tracking against the plan and the trends in key performance indicators. Are you where you’re supposed to be?” He pointed out that getting back on track can take time, someasure constantly and adjust quickly; don’t wait. In closing, Mr. Reba reiterated, “While the challenges and risks of the private equity CFO job are great, the rewards and opportunities can be far greater. “The CFO of a small company is often an island unto him- or herself, whereas the CFO of a company that is backed by the right PEG has much greater resources at his or her fingertips.” And that, he said, is indeed a bonus. C L. to R.: John Breeman, Chief Financial Officer, Voltari Corporation; and Steve Heumann, Senior Finance Manager, York Risk Services Group Howard Reba, at right, speaking with Marty Latman, Chief Financial Officer, Prestige Industries, LLC, at the event in Morristown, NJ Finalists for the 2016 CFO Innovation Awards Honored The chance to meet Frank Gumienny, CFO of the Philadelphia Eagles, might have been the big draw at the CFO Studio quarterly reception on the evening of March 1, but the event was also the first opportunity for finalists in this year’s CFO Innovation Awards to receive applause. More than a third of the honorees for the 2016 Awards were present that evening at Galloping Hill Golf Club in Kenilworth, NJ, for the public announcement of finalists’ names. The 45 finalists include several who were finalists last year as well. Some of them were present at the reception, including David Feit, CFO of Pearl Capital Business Funding, a 2016 finalist for the CFO Industry Transformation Award, and a 2015 finalist in the CFO as COO category. Michael Mardy, CFO of Tumi Holdings, is a 2016 finalist in the CFO as COO category; in 2015 he was a finalist for Strategy. And Michael Dentici, CFO of T&M Associates is a 2016 finalist in the Strategy category, while in 2015 he was a finalist in the Leadership category. CONGRATULATIONS TO ALL THE FINALISTS!