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Good morning. Target’s new CFO is the latest example of a top executive who has spent decades building a career at one company—and then leaping to a new one to go higher. The CFO in question is Jim Lee, who will join the retailer and Fortune 50 company on Sept. 22 after a more than 25-year career at the multinational food and beverage company PepsiCo, where he most recently served as deputy CFO. He succeeds Michael Fiddelke, CFO and chief operations officer, who will take off his finance hat, and remain as COO.
Fiddelke has been with Target for more than 20 years. Lee has decades of experience "leading core finance functions and nurturing growth," Brian Cornell, chair and CEO of Target, said in a statement on Thursday. To get a better sense of what the new CFO hire means for Target, I spoke with Diane Rulke, a professor of organizational behavior at Carnegie Mellon University's Tepper School of Business. As finance chief, Lee, an external hire, could bring in new ideas and new approaches, Rulke said. “From a strategic point of view, it seems to make sense, and I understand why the board wanted that,” she said.
For the CFO role at Target, Lee will receive an annual base salary of $850,000 and a cash sign-on bonus of $2.2 million, according to an SEC filing. Not only is Lee coming from PepsiCo, another Fortune 50 company, his international experience was most likely also appealing to the board, Rulke said. During his time at PepsiCo, Lee led global teams in business development and finance functions across North America, Europe, and Asia, including serving as CFO for several of PepsiCo's international regions. “Going global is something Target hasn’t done successfully, so maybe Jim Lee would add some expertise there,” she said. In 2015, Target closed its more than 100 stores in Canada, the company's first attempt at international expansion.
But in May, Target announced plans to expand its Cat & Jack children’s clothing line to Canada's Hudson’s Bay Co., which has 85 department stores. Lee mentioned in a Target Q&A that he's ready for a new industry after working in consumer products at PepsiCo for more than two decades, and excited for the “pace and complexity of retail." But it also seems he had to change companies to become the top CFO. Longtime PepsiCo CFO Hugh Johnston left the company in November taking on the role of finance chief at The Walt Disney Company. James Caulfield was promoted to CFO at PepsiCo, and Lee became deputy CFO. Lee’s chance of becoming CFO at PepsiCo was not very likely in the near future, Rulke said.
So joining Target is “a very good career move for Jim Lee," she said. Story continues Rulke added that, in general, it’s become more common for executives to move after they’ve spent decades at one company. It seems to be a trend that execs prove themselves in one role for a prolonged period of time to gain expertise, and then they move on to the next role or next job with different challenges, she said. Last week, I had a call with Tony Greene, president of the executive benefits division of NFP, and we talked about how high-performing executives are getting poached. I asked Rulke about that trend.
“I don't have research on this because it's such a new phenomenon, but in recent years, it is absolutely true that this is happening with top executives,” she said. And Rulke said Chipotle CEO Brian Niccol getting poached by Starbucks for the top spot is a good example. Have a good weekend. Sheryl Estrada [email protected] This story was originally featured on Fortune.com View comments
Why Target poached a top PepsiCo exec to be its new CFO
September 20, 2024 09:33 PM AEST | By EODHD
