In examining how CFOs work with CEOs to maximize stock price, we track the impact of such factors as the delegation of specific responsibilities from chiefs to their financial lieutenants. We also outline best practices both in operations and in other, less-quantifiable areas, such as communications with the investment community, and how CEOs and CFOs support and learn from each other. Many of the conclusions that emerge from this research contrast with conventional wisdom. Paradigm shifts usually do. Among the most significant factors are the effort companies make to adjust the investor mix, and how they use stock price to attract and retain top-notch employees.
Few companies benchmark the success of their efforts to increase share price.
Exploring CFO opinions in depth, we feature a pair of top performers and examine their relationships with their superiors. As with any embryonic model, we fully expect the definition and benchmarks of success to change as we learn more about the process, and as executives continue to experiment with alternative ways to influence share price. Working from the Value Line database, we confined our search to companies with the same CEO and CFO in place during the three-year period ended December 31, 1994. On a questionnaire, The CEOs and CFOs of these companies were asked to indicate factors with the most significant impact on stock-price growth. Among the possible responses were qualitative factors, such as communications with shareholders and CEO leadership in such communications.