Good morning. Russell Reynolds Associates on why some CFOs may make good CEOs; Burger King and McDonald's reach new phase in burger wars; Sen. Elizabeth Warren presses Trump on inflation-data changes.
ConocoPhillips CFO Andy O'Brien is the latest finance chief to step into the top job, with current CEO Ryan Lance retiring next month after 14 years.
The leadership change comes as U.S. oil giant ConocoPhillips reported its best quarterly results in four years, with profits of $3.9 billion, boosted by higher oil and fuel prices amid the Iran war, our WSJ colleague Benoît Morenne reports.
CFO background and cred: O'Brien joined the company in 1997 and has held several finance, planning and strategy roles throughout his time. He became a member of the executive leadership team in 2022, and was named finance chief in June of last year. The executive changes are scheduled to happen on Sept. 1, ConocoPhillips said.
CFO Journal has tracked the CFO-to-CEO pipeline trend for some time, and as Russell Reynolds Associates has noted in its research, there are several reasons for this pathway. I first met Jim Lawson, co-lead, global financial officers practice at Russell Reynolds, when he joined the WSJ Leadership Institute's CFO & COO Council Dinner in May, so I reached out for his take.
Why do CFOs make sense as leaders? For one thing, "CFOs are among the executives who most frequently face the board and external stakeholders, so they arrive at the top job already fluent in two of the constituencies that matter most," Lawson told me. "That's why we are seeing organizations increasingly hire CFOs as potential CEO successors from the outset."
Russell Reynolds has a new report on the topic coming in the fall, but Lawson pointed to some relevant data points on this CFO trend, noting:
-- 20% of newly appointed CEOs across the top global public companies
previously sat in the finance seat (That's based on the RRA 2025 Global
CEO Turnover Index.)
Also, less than half of board directors believe their CEO succession plan will succeed. Meanwhile CEO tenures hit record lows and leaders' interest in the top job has dropped significantly over the past three years, he said. Boards need more alternatives, and the CFO is often a good option. We asked Lawson to elaborate more:
What does this kind of transition say about the trend? And why does it make sense?
We can't comment on any specific appointment, but the broader trend is clear. The CFO remit has expanded to the point where the modern CFO is an enterprise leader rather than a functional expert -- in many organizations, the de facto COO, with command of both financial and operational levers and a holistic view of the enterprise that few other executives possess.
What are some potential learning points for CFOs?
Not every CFO is a natural CEO candidate. The clearest dividing line our interviewees described was orientation. CFOs who define the job as value protection tend to struggle. Those who define it as value creation tend to succeed.
The Day Ahead
📆 Earnings
-- Oklo -- Plains All American Pipeline -- PPL -- Take-Two Interactive Software -- Vistra
📈 Economic Indicators
The Bureau of Labor Statistics releases the jobs report for July.
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What Else Matters to CFOs
The burger wars are back, with the latest salvo coming from Burger King.
Burger King executives said Thursday that work to revamp its signature Whopper burger earlier this year helped deliver an 8.5% increase in domestic U.S. same-store sales for the three months ended June 30.
"A lot of people are saying they're coming back for the first time in a long time," said Tom Curtis, president of the chain's U.S. and Canada business, in an interview.
The chain is gathering momentum while archrival McDonald's is grappling with challenges in its U.S. business, with traffic declining after recent promotional offerings and marketing failed to hit. McDonald's is bringing in a new U.S. president to conduct a turnaround and implement a new strategy focused on improving food and service.
📰 Other headlines
-- Exclusive: Warren Presses Trump Administration on Inflation-Data Changes
-- New Layoff Data Show Job Cuts Down 41% So Far This Year
-- FCC Votes to Repeal National TV Ownership Limit
-- FAA Orders Inspections of Hundreds of Boeing 737 MAX Jets Over Possible
Cracks
-- Ratings Firm Accused of Grade Inflation Vouched for $40 Billion of
Insurer Debt
-- Canada Services PMI Improves in July Yet Remains in Contraction Territory
-- Apollo to Buy European Budget Airline easyJet for $7.7 Billion
-- This Fashion IPO's Growth Story Looks Flimsy
-- The Most Fertile Land for Winemakers Is 30,000 Feet in the Air
📈 Earnings wrapup
-- Molson Coors Sales Fall Amid Demand Challenges, Supply Costs
-- Papa John's Believes In Its Turnaround, Even Though It's Taking Longer
Than Expected
For more earnings news, click here.
The Big Number
Price for a caviar hot dog known as the Golden Glizzy, which features crème fraîche, mascarpone, 30 grams of Ossetra caviar and 24-karat edible gold flakes served on a fresh-baked croissant bun.
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