The investment banker-to-CFO shift can be jarring in two other ways: compensation-wise and culturally. Measured strictly on a cost-benefit basis, investment bankers may find a CFO job wanting. “Investment banking has one of the best risk-returns in the world,” Lark says. “CFO is the opposite. The risk is very high, but on average the payoff is going to be lower.” In addition, a CFO may have to wait years to earn the millions that an investment banker can earn in months — and even then the CFO’s payout will be largely tied to the company’s performance on the stock market.
Culture can be another hurdle. When Mitchell Gordon joined Interpool, one of the remarkable differences was the responsiveness of his fellow employees. As an investment banker, used to getting answers to e-mails in the middle of the night, Gordon found the pace of a corporate finance department slow. It took some adjusting — but it was his staff that adjusted, not Gordon.
“Investment bankers have a better service orientation than any other professionals, and that kind of service attitude could good be good for any organization to adopt. My people at Interpool worked harder,” he says.
For some longtime investment bankers, the move into the C-suite is inharmonious, especially if they come from a firm like Goldman Sachs where culture is so powerful, according to Gallagher of Battalia Winston. When investment bankers leave a firm voluntarily, they typically do so in droves and set up their own shops with former colleagues. But “when you peel them out on their own and put them in an established corporate culture, they have one of the highest incidences of failure,” Gallagher says.
For that reason, boards of directors and CEOs may not want to be the guinea pig for a banker-turned-CFO — and instead cherry-pick candidates who gained corporate finance experience on some other company’s dime.
For the bankers that do make it to the C-suite, even if only temporarily, it’s a singular experience, according to Clarke. Being in the trenches as CFO of a company in crisis made him a better banker, he says. “To be able to say I made payroll for a year and a half means I understand cash flow. To my clients, I am not just a guy in a nice suit with a good calculator; I actually understand how balance sheets move.”
On the other hand, executives like Pribor that stay on the CFO side of the table and never return to banking find plenty of satisfactions. “I have as many Lucite tombstones as I need — they’re in boxes in my garage,” says Pribor of the trophies that investment bankers collect from M&A deals. “I prefer to spend the rest of my productive years creating value for a company and its shareholders.”