CFOs for hire: the rewards and pitfalls of being an itinerant executive.

By any objective measure, CPA Cynthia Jamison had built an enviable career. After two years in public accounting, a couple of years as a consultant and several more in corporate accounting, planning and treasury, Jamison secured a series of jobs as CFO for public and private companies--all by age 39. Still, she wasn't quite satisfied. "I was finding that about 12 to 18 months into whatever job I had, I was getting bored," Jamison recalls. "I like problem-solving, and once problems are solved, the CFO role can be a fairly dry one if the company isn't going through a lot of change, growth or contraction.

Eager to build a career that would let her flex her problem-solving skills, in 1999 Jamison joined Tatum CFO Partners, a national partnership of financial professionals who provide CFO services to companies on a permanent or temporary basis. Since then, Jamison has served as CFO at four different companies, each with its own unique set of challenges. "I love what I am doing with Tatum and plan to stay with them to retirement--or until I win the lottery, whichever comes first," she quips. (For more details on Jamison's career, see "Inside an Interim CFO's Whirlwind Career," page 38.)

Jamison is a new breed of CFO: a change agent with a wide range of technical skills who is willing to parachute into a challenging environment, do the heavy lifting and then move on to the next assignment. It's a role that became increasingly popular during the dot-com boom of the 1990s, when scores of young companies long on ambition but short on managerial talent drove demand for finance professionals sky-high.

Today, in the wake of the tech-stock crash and a string of high-profile corporate accounting scandals, temporary CFOs are still finding work, though they are more likely to be helping companies restructure than go public. Their clients range from small companies that need high-level expertise for a particular project to larger companies that must fill the CFO slot quickly and don't have time for a traditional search. A growing number of placement companies are springing up to help them find assignments, including some executive recruiters that have found the interim market too hot to ignore.

For CPAs contemplating life as an itinerant CFO, the road to success begins with understanding what employers want from an interim executive, deciding whether the rewards--and the potential pitfalls--match their own personality and career goals and making the right contacts to win assignments.

WHAT COMPANIES WANT

Companies hire interim CFOs for many reasons, but the catalyst driving that decision almost always falls into one of three categories: They need someone immediately (perhaps the current CFO became ill or left the company), they need someone for a finite period of time (until the company is sold, for example) or they need someone to handle a specific project with a defined end (implementing a new accounting software package, negotiating bank financing or steering the company through a bankruptcy filing). The overarching requirement, in all cases, is to find an interim executive with the appropriate background and expertise who can report for duty almost immediately, sometimes within a few days.

"These companies usually have an urgent problem and need someone right now," confirms Dennis Powers, managing director of the New York office of Executive Interim Management (EIM), which places temporary CFOs and other high-level executives. "Or they don't have a permanent job but a finite piece of work--and don't want to be saddled with the search fees, sign-on bonuses or exit packages that come with a traditional executive search. Or their company may be in an unstable position, which would make it hard to get someone on board on a permanent basis." CPA Neil Lebovits, president and chief operating officer (COO) of placement organization Ajilon Finance (formerly known as Accountants on Call), says it isn't just small companies that hire temporary CFOs. "A common phenomenon over the last couple of years has been for large companies to hire interim CFOs, not at the global level, but at the division level," he says.

Companies hiring interim CFOs typically want the executive to have prior experience as a CFO, though not always. Communications skills are at a premium, as are computer skills. "It helps if the person has been successful parachuting into multiple cultures," says Powers. "If he or she has done turnarounds, that's helpful, too. We certainly want to see evidence the person has gone in and made changes, as opposed to being caretakers. And all must have roll-up-your-sleeves capabilities and not just be delegators or managers." Adds Powers: "You really have to focus on execution, implementation and pulling the trigger. You have to be decisive and fearless; you can't suffer from analytical paralysis."

Companies that place interim executives generally find them by networking with their contacts in the accounting and legal fields, but they also consider candidates who submit resumes. CPA Bill Tennison, currently CFO and COO for The Salem Group Inc., a seller of midrange computers and related services based in Winston-Salem, North Carolina, says he won several interim CFO assignments by responding to help-wanted ads at the job-search Web site www.monster.com. In fact, Tennison found his current job this way after Ajilon Finance posted the position there on Salem Group's behalf. Tennison took the job on a temporary basis in October 2002 and was named the company's permanent CFO/COO in December.

A typical temporary assignment lasts from 3 to 12 months. While most engagements do not lead to permanent jobs, some do. Paul McDonald, executive director of placement company Robert Half Management Resources, a division of temporary-help giant Robert Half International, says about half of his company's clients want CFOs who can take an interim assignment and then, if things work out, convert to permanent status.

By contrast, EIM's Powers says less than 20% of his company's placements turn into permanent assignments, in part because EIM discourages it. "If you're hiring a change agent, you want a person who is going to call things as he or she sees them rather than worry about self-interest," Powers says. When companies do hire one of EIM's interim executives permanently, he adds, they pay EIM a traditional search fee--and a higher one than usual if the executive is someone who has been working with EIM for a long time.

WHAT'S IN IT FOR YOU?

Like Jamison, many CPAs who've segued from permanent jobs to the interim market say they enjoy the challenge and excitement of moving from assignment to assignment, as well as the hands-on nature of the work. "I hear back from many CFO consultants who say that when they were working in a permanent job, they had all the personnel and operational issues to handle on a day-to-day basis, and many times, they got further and further away from the actual hands-on implementation or process improvement they enjoyed as they came up the organizational ladder," says McDonald. "Interim assignments allow them to focus on those aspects of their job that are hands-on, add value and keep them engaged." Interim work also is attractive to seasoned CFOs who are nearing, or have passed, retirement age and no longer want a permanent job--but don't want to spend five days a week on the golf course, either.

Paul Myers, a CPA who has held two interim CFO jobs in the past five years, says he initially took temporary assignments as a stopgap mea sure after quitting a job that didn't challenge him. Since then, he has come to embrace contract work as a way of life. "When I first started, I was not very happy," Myers recalls, "because I didn't have a lot of experience doing it, so I took positions just to make some money and put something on my resume," he recalls. "Now I have a whole list of credentials; I've increased the scope and difficulty of my assignments, and I've gotten to the point where, when I come to work each day, it's something I enjoy. I don't even search for full-time work anymore." Since 2000, Myers has been working on a variety of interim financial consulting assignments--albeit not as CFO--for an Iowa money manager.

Pay rates for interim CFOs range over a wide scale, just as they do for permanent CFO positions. Typically, says Powers, experienced executives will earn more per day in an interim role--his CFOs typically make about $1,000 a day--than they will in a permanent position, but may earn less or more over the course of a year depending upon how full they keep their dance card. What's missing, in many cases, are the extras that can come with a permanent position at a larger company, such as bonuses and, particularly, stock options. "You have to make sure your project rates make up for that," says CPA Maureen Cook, a Minnesotan who's been doing contract work for the past six years, including two stints as an interim CFO.

THE PITFALLS

Working as a temporary CFO is not without its disadvantages. Unless negotiated up front, these positions typically don't include bonuses and regular pay increases. And they usually don't come with regular benefits such as life, health and disability insurance, pension contributions and 401(k) participation. For top-level CPAs used to executive perks, it's also important to remember there won't be any stock options or other incentive compensation. And the less tangible rewards frequently are in short supply as well, with fewer pats on the back for a job well done than those on a traditional career path.

Not surprisingly, the scariest part of contract work for many interim CFOs is wondering where their next assignment is coming from, and how soon. That may not be much of an issue for someone who would otherwise be retired, but it can be a big concern for younger professionals. "If you're an empty nester, it's a much easier transition because you're not relying on cash flow to pay tuition and all the other expenses that go with raising a family. And, it's hoped, you have some retirement income built up as well," says Tennison, who's worked both sides of the fence. "But if you're looking to maintain a livelihood, you need to be hooked up with three or four consulting companies. Having done both, I prefer long-term over interim work."

To cope with the uncertainty of contract work, most interim executives take advantage of the marketing capabilities of placement agencies. Signing up with a placement company costs the individual nothing; the corporations that hire these workers pay all the fees. While executives may incur travel and lodging expenses in fulfilling an assignment, they typically are reimbursed by the client company.

On the bright side, many successful interim CFOs report that finding work hasn't been a problem. Jamison says that over the past four years, she has spent virtually no time not working, except by choice. Ditto for Paul Myers. Cook adds the notion that a permanent job offers more security than an interim one is probably less accurate now than it was in the past. "What's the average life expectancy of a job now?" Cook asks. "I don't think there are any guarantees. I'm not seeing 30-year employees anywhere. A staff job might be more permanent than an 11-month assignment, but it's probably not going to last longer than five to seven years."

That said, Cook does warn that contract work can prove unattractive not only to accountants who don't like its tenuous nature, but also to those who want the career accolades associated with traditional employment. "I find project work fulfilling in part because I had already completed what I would call climbing the corporate ladder," she says. Cook started her career as a public accountant with Arthur Andersen and subsequently joined Apogee Enterprises in Minneapolis, where, over the course of 15 years, she rose from accounting manager to vice-president and CFO of its architectural products and services division. She currently works for a financial services firm in Minneapolis, where, following the company's merger, she's leading a project to integrate disparate budgeting systems.

GETTING STARTED

Obviously, CPAs eager to work as interim CFOs first must make sure they have the requisite skills and experience. "That comes from being a corporate-level executive for several companies," says Doug Tatum, CEO of Tatum CFO Partners. "I don't believe there's anything else you can do to get that experience." Robert Half's McDonald adds that even someone who hasn't held the formal CFO title should have comparable experience. "A really strong candidate would have deep-rooted accounting and finance experience and probably some background in cash management and treasury functions, plus a strong foundation in internal controls," he says. "This person might have helped set up and manage an internal audit department, and most likely would have 10 to 15 plus years of work history and have a solid understanding of information systems since the CFO's technology role is becoming very important."

To find interim engagements, CPAs should network within their professional organizations and contact placement agencies, talking not only with placement specialists but also with other executives who've taken interim CFO positions through them. (For a list of resources, see the exhibit below.) And because different placement companies operate on different business models, CPAs who use them should understand those differences and how they can affect their careers. As previously noted, for example, Robert Half is happy to place executives in temporary engagements intended to segue into permanent assignments, while EIM, which doesn't consider itself a placement agency because it assumes responsibility for the engagement, discourages the practice. Tatum CFO Partners, also not a traditional placement company, will send its partners into both interim and permanent positions.

Structured more along the lines of a law firm than a temporary-help agency, Tatum is quick to point out that all of its interim CFOs are partners in the company. While they become employees of the organizations where they work during their engagements and negotiate salary and benefits with those companies, they also remain Tatum partners. Accordingly, one-sixth of their salary goes directly to the partnership, where it pays for the partnership's overhead. If any money is left in the pool at the end of the year, it gets distributed among the partners. Ajilon Finance, by contrast, puts interim executives on its own payroll when they take an assignment. They are eligible for vacation and holiday pay and referral bonuses. They also are allowed to participate, at their own expense, in a group health insurance plan. EIM considers the interim executives it works with contract employees who receive form 1099 documenting their gross earnings; they pay for their own benefits and handle their own income tax payments.

Apart from how they pay their interim executives, placement companies also differ in what they offer by way of training, education and support. Some offer virtually none, functioning much like a typical temporary-help agency; they merely match executives with companies that need them. Tatum, by contrast, has formalized the sharing of intellectual capital among its partners, through an intranet on which they can exchange e-mails, offer each other advice and call up white papers the company has developed on technical issues. EIM also encourages knowledge sharing among its independent contractors, making available to them, for ex ample, the project summaries the company prepares at the conclusion of each engagement. Ajilon will coach executives applying for interim positions in how to interview for a job but presently does not offer candidates any technical training.

After vetting placement agencies, CPAs who get offers to serve as temporary CFOs also will want to be clear about the parameters of those positions before moving into them. That means knowing not just what they're expected to accomplish and how quickly, but how they'll be paid and by whom, what benefits accompany the job and what expenses, if any, they'll be required to pay on their own. "You also need answers to authority questions," says Lebovits. "You want to know if you really have the signing and approval authority a normal CFO would have. If not, it shouldn't be a deal breaker. But you should understand going in that sometimes you'll have this and sometimes you won't."

A FLEXIBLE CHALLENGE

For CPAs who can handle the pressure and the uncertainty that come with the territory, interim CFO positions can offer a financially rewarding, intellectually challenging career. Such posts also offer freedom to early retirees and those with parenting responsibilities to work as much or as little as they want during a year. Ultimately, it is the ability to have both flexibility and challenge that makes these jobs so attractive to CPAs. And this much is certain: The experience will never, ever be boring.

CFO Compensation

Median base salary for full-time CFOs in 2001 was $413,000, up 7% from the previous year. Median bonus was $251,000. Considered together, salary and bonus showed no increase over 2000 levels.

Source: CFO.com/Mercer CFO Compensation Survey, www.CFO.com.

EXECUTIVE SUMMARY

* FOR SOME CPAs, A CAREER AS A TEMPORARY CFO may bring financial rewards, professional challenges and career flexibility. A growing number of placement companies have sprung up to help these executives find interim assignments, which can sometimes lead to permanent jobs.

* COMPANIES TYPICALLY HIRE AN INTERIM CFO for one of three reasons: They need someone immediately to replace an executive who is sick or has left, they need someone for a finite period of time or they need someone to handle a specific project such as implementing a new accounting software package. A typical temporary assignment lasts 3 to 12 months.

* A COMPANY HIRING AN INTERIM CFO USUALLY WANTS the executive to have prior experience as a CFO. Also important are communication skills, technology expertise and a track record turning around difficult situations. Strong candidates will have deep-rooted accounting and finance experience, as well as some cash management and treasury background.

* FOR MANY, THE SCARIEST PART OF BEING AN INTERIM CFO is wondering where the next assignment is coming from and how soon it will show up. Most of those who work as temporary CFOs register with one or more placement companies to help them find their next job.

* WHEN SELECTING TEMPORARY CFO ASSIGNMENTS, CPAs should understand up front what is expected, what they will be paid, what expenses the company will reimburse and what benefits they will provide. The temporary CFOs should understand up front whether he or she will have the signing and approval authority of a traditional CFO.

Inside an Interim CFO's Whirlwind Career

Cynthia Jamison's life as interim CFO has been a quite a ride. Upon joining Tatum CFO Partners in 1999, Jamison was quickly given a turnaround assignment with Illinois Superconductor Corp. in Evanston, Illinois, which makes interference-control products for the wireless telecommunications industry. The company was strapped for cash at the time. As interim CFO, Jamison led its successful effort to secure emergency funding. The assignment ended after one year with a complete reorganization of the company's board and management.

Next came a permanent assignment with a privately held software company in Rosemont, Illinois. CultureWorx intended to go public but ultimately was sold to a Fortune 100 company; that job lasted 18 months.

In her third assignment, Jamison tackled a company embattled by accounting and legal problems; she spent four months cleaning up its books. Her latest assignment, also a permanent one, is with SurePayroll Inc., a privately held company in Skokie, Illinois, which provides online payroll services for small businesses. Jamison isn't worried about the job becoming stale, she says, because SurePayroll is growing exponentially, having doubled its customer base to about 4,000 in one year.

A busy mother of four sons, ages 4 to 20, Jamison takes comfort in being part of Tatum CFO Partners rather than trying to market her skills on her own. One of the chief benefits, she says, is access to the intellectual capital resident in the other 350 Tatum finance partners (the company also has about 100 partners who hire themselves out as chief information officers). "Most CFOs will tell you this can be an incredibly lonely job," Jamison says, "and also a very broad one. Often, there are aspects you haven't handled before. Perhaps someone wants you to create an employee stock ownership plan, for example, or find outside funding. We have this incredible intranet portal where you can pop on as a partner, send a message to any or all of the 350 partners and, overnight, get 10 to 12 answers to your question."

Jamison says the security of the partnership also makes it easier for her to accept assignments she might deem too risky if asked to take them on as an ordinary employee, such as those involving start-ups or companies in financial or legal trouble." Besides, she says that if she left Tatum and struck out on her own, "I would miss my partners and their support."

Resources

Here are some of the larger companies that specialize in placing finance professionals in interim CFO positions. Some also provide CFOs for hire on a permanent basis.

Ajilon Finance
Park 80 West
Plaza II--9th Floor
Saddle Brook, NJ 07663
866-462-5456
www.ajilonfinance.com

Executive Interim Management
450 Park Avenue, Suite 2000
New York, NY 10022
212-751-4777
www.eimus.com

Heidrick & Struggles Interim
233 South Wacker Drive, Suite 7000
Chicago, IL 60606-6402
312-496-1000
www.heidrick.com

Robert Half Management Resources
5720 Stoneridge Drive, Suite 3
Pleasanton, CA 94588
925-598-7000
www.rhimr.com

Spherion Corp.
2050 Spectrum Boulevard
Fort Lauderdale, FL 33309
954-308-7600
www.spherion.com

Tatum CFO Partners
4501 Circle 75 Parkway
Suite A-1164
Atlanta, GA 30339
800-828-8623
www.tatumcfo.com

RANDY MYERS is a freelance financial writer who lives in Dover, Pennsylvania. His e-mail address is [e-mail].