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January 27, 2023

Rolls-Royce’s Next CFO Chosen for His INTENSITY Rather Than Industry Experience

Here's a Wall Street Journal story about Rolls-Royce's future CFO, Stephen Daintith.

He's joining the company in 2017 from Daily Mail & General Trust PLC, the publisher, so you might be wondering, "Why does a manufacturer want some dude who's been working at a publisher?" Good question! Especially considering that the company's accounting is a little unusual:

In July, Rolls-Royce announced a new reporting structure, which it plans to explain in more detail later this year. The underlying reason for the changes is the introduction of a new accounting standard called IFRS 15 in 2018.

The accounting practice at Rolls-Royce confused analysts and market observers for more than a decade. “Rolls-Royce’s accounting structure was opaque and hard to understand,” [Jefferies analyst Sandy] Morris said. “The impact of stopping this practice was negative for Rolls-Royce’s results.”

This might sound like a job for someone with robust technical knowledge making Daintith's selection even more strange, however, analysts say that this is all part of the plan:

Mr. Daintith has been appointed CFO not because of his industry background but because of his spirit, the analysts say. “The one thing CEO [Warren] East repeats is that he wants to inject pace into the organization. That includes the CFO position,” said Mr. Morris.

Spirit? Pace? Sure, why not. I think you could've got someone cheaper by grabbing the most over-caffeinated person in the finance department, though.

[WSJ]

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