CFO job at Walmart is a ‘complex’ and ‘critical’ position

Walmart has a full year to find a replacement for Chief Financial Officer Brett Biggs, who announced his retirement effective Jan. 31. 2023. Biggs has logged 22 years at Walmart, spending the past six as CFO and helping shepherd the company through a growth period despite a global pandemic, workforce and supply chain challenges.

The CFO role is to manage the company’s finances, assess risks relating to investments, acquisitions and divestitures, keep budgets intact to allow for revenue and earnings growth all while protecting shareholder dividends and working to keep equity analysts happy by traveling and speaking at investor conferences on a regular basis.

Alan Ellstrand, associate dean for programs and research at the Sam M. Walton College of Business at the University of Arkansas, said the CFO role has evolved over the years and it continues to change with the use of analytics, financial tech and hedging strategies companies use. He said the CFO role is one of the two most strategic management positions. He said aside from just making the numbers work, compliance issues also often fall on the CFO desk, and then there is the quarterly earnings rhetoric that has to be constantly sold to analysts and investment houses.

“It’s a highly complex job and one that is critical to the company’s success. I am sure Walmart has talented candidates in-house, but a full year’s notice also gives the company a chance to cast a wider net for his replacement. Walmart has time to be thoughtful about how they fill this critical position,” Ellstrand said.

Biggs, 53, is Walmart’s third CFO since 2010. Thomas Schoewe held that position from 2000 to 2011 when he retired at age 58. Schoewe has since worked as a director on several corporate boards including KKR Management, Northrop Grumman, PulteGroup Inc., and General Motors. Schoewe spent 14 years at Black and Decker. Schoewe’s total compensation in his final year as CFO at Walmart was $7.216 million. During much of Schoewe’s tenure, Walmart U.S. struggled to grow its comp sales. The share price of Walmart at the start of Schoewe’s tenure as CFO was $54.75 and only inched up to $55.07 by the time Schoewe left Walmart after a decade of work.

Charles Holley replaced Schoewe as CFO in January 2011 after joining the company in 1994 from Tandy Corp. Holley oversaw the financial affairs for Walmart amid the retail giant’s antitrust probe by the Department of Justice over the Foreign Corruption Practices Act violations. Holley had the responsibility for accepting and controls, corporate strategy and development, business planning and analysis, internal auditing, treasury, tax and investor relations. During his last year as CFO at Walmart, Holley earned total compensation of $7.431 million.

Holley was 59 when he left Walmart and he has since worked on the boards of directors at Amgen, Phillips 66 and Carrier Global Corp. He also worked as a senior advisor at Deloitte from 2015 to 2019 and is on the advisory council for the McCombs School of Business at the University of Texas at Austin and the University of Texas Presidents’ Development Board.

Walmart CEO Doug McMillon said in 2015 that Holley oversaw Walmart’s global finance and strategy areas during a period of immense company growth and change. The company’s stock closed at $66.36 when Holley left Walmart. During his five-year tenure as CFO, Walmart’s stock price rose 20.5% or a compounded annual rate of 4.1%.

When Biggs took over the CFO reins, he was pegged by McMillon as being “well-prepared” having held a variety of roles in all three of Walmart’s business segments. McMillon in 2016 said Biggs “thoroughly understands Walmart’s operations, how we intend to compete in a dynamic and changing retail environment and how we can best serve customers, associates and shareholders.”

Biggs previously held the CFO position for Walmart’s international division where he was responsible for international strategy and finance activities, including business planning and analysis, financial services, and support for real estate and mergers and acquisitions. He also logged time as CFO for Walmart U.S. between 2012 and 2014 and Sam’s Club prior to that. McMillon followed a similar path to his position having served as CEO of Sam’s Club and then running the International business as CEO under Mike Duke’s tenure as CEO of Walmart Inc.

Ellstrand said with Walmart adding a chief revenue officer in October, it will be interesting to see if the role of CFO is tweaked for Biggs’ successor. He said the chief revenue officer has become popular in recent years, particularly in the technology space. He said Walmart will likely have no shortage of candidates for the job.

Ellstrand was not surprised to see Biggs retire earlier than others given the pressures and grind that come with the job when you consider the strong financial position Walmart has achieved.

“His contributions have been a key to the important steps we’ve taken to transform the company on our omni journey,” McMillon said Monday. ”Brett has elevated the finance organization and strengthened the team through his commitment to excellence and talent development …  his high character and strong leadership have played a central role during one of the most significant periods in the company’s history.”

When Biggs took over as CFO in Jan 2016, Walmart’s share price was $61.30 and the retailer had a market cap of $196.59 billion. As of Dec. 2, Walmart shares (NYSE: WMT) were trading at $137.41 with a market cap of $383.084 billion. Walmart has grown revenue in excess of $559 billion annually through last year and is forecast at $572.13 billion this year ending Jan. 31, 2022, and $588.92 billion the following year when Biggs retires. Revenue has grown from $482.13 billion in fiscal 2016 when Biggs signed on as CFO. That’s an increase of $76.87 billion through last year and $90 billion through the estimated revenue of this year ending Jan. 31. If predictions hold true, Walmart’s annual revenue growth by the end of Biggs’ tenure would be $106.79 billion or 15.25% compounded annual growth over seven years.

Walmart has rewarded Biggs with increased earnings tied to financial performance. Biggs earned total compensation of $9.123 million. Since taking the position in January 2016, Biggs has earned more than $49.957 million in total compensation.