A CFO to CEO transition story that just took an ugly turn

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It’s been a busy week for news, including reports on executives violating codes of ethics.

Earlier this week, there was the arrest of Tyson Foods CFO John R. Tyson, a month into his role. And the coffee and soft drinks company Keurig Dr Pepper Inc. (Nasdaq: KDP) announced yesterday that Ozan Dokmecioglu, the CEO and former CFO, has agreed to resign “due to violations of the company’s code of conduct that were unrelated to strategy, operations, or financial reporting,” KDP said in a statement.

“Keurig Dr Pepper’s code of conduct is built on a foundation of ethics, integrity, and personal responsibility,” Paul S. Michaels, lead director of the KDP Board, said in a statement. “Every employee, without exception, is accountable for knowing and following the code.”

The company did not explain the code violations and had no further comment beyond the announcement.

Dokmecioglu became CEO on July 29. He previously served as CFO since July 2018, and president of international since November 2020. Before the merger, Dokmecioglu was the finance chief at Keurig Green Mountain, beginning in May 2016. And before that, he served in CFO roles at Kellogg Inc.

Dokmecioglu succeeded Bob Gamgort as CEO at KDP. But Gamgort will now return to the chief executive role. He is also serving as executive chairman. And Sudhanshu Priyadarshi, who was selected to succeed Dokmecioglu as CFO after his promotion, begins his job on Monday.

Priyadarshi was most recently CFO at Vista Outdoor Inc., a sporting and outdoor goods company. He started his career at PepsiCo, where he spent 14 years in roles, including as CFO of global R&D and PepsiCo Global Nutrition Platforms.

As Gamgort returns as CEO, will the company face any challenges?

“This should be a seamless transition for KDP,” Gerald Pascarelli, an SVP of equity research at the investment firm Wedbush Securities Inc., told me. Since Gamgort has only been away from the role for less than four months, and since he assumed the role of executive chairman, he has “remained an integral part of the company’s operations,” Pascarelli says. Going forward, nothing should change from an operational or a capital allocation perspective, he says. “KDP will continue to focus on using its discretionary free cash flow to drive M&A and partnerships looking for ways to scale the business inorganically,” Pascarelli says.

Gamgort was the strategist behind the merger of Keurig Green Mountain and Dr Pepper Snapple to form KDP. In 2020, he explained to Fortune’s Shawn Tully his vision:

“The industry viewed beverages much too narrowly,” he said. “Over half of Starbucks’ drinks have ice in them. When someone needs a boost in the afternoon, they may choose a coffee, a Dr Pepper, or our Adrenaline Shoc energy drink. Yet the industry and Wall Street looked at hot and cold as two completely different segments. When we merged, no one got it…We need to be as important as possible to a Walmart or Amazon, and we get there by offering a portfolio that meets every consumer need.”

Net sales for the third quarter of 2022 at KDP increased 11.4% to $3.62 billion, compared to $3.25 billion at the same time last year. Wedbush reiterates its outperform rating for KDP.

I asked Pascarelli if Priyadarshi will be focused on investor relations because of Dokmecioglu’s departure for violating the code of conduct. “Likely not,” he says. “This resignation would have been a much bigger issue, warranting a lot more questions for KDP if it was due to business operations or financial reporting, but that is not the case here.” As CFO, Priyadarshi will most likely be focused on delivering long-term targets to drive mid-single-digit revenue growth and high single-digit EPS growth, he says.

When Priyadarshi accepted the job offer, he may have thought he’d be the strategic partner to Dokmecioglu. But as life can sometimes be unpredictable, both he and Gamgort will be tackling roles neither could have forseen a few months ago.

Today is Veterans Day in the U.S. Thank you to all veterans for your service.

Have a good weekend.

Sheryl Estrada
sheryl.estrada@fortune.com

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Big deal

A key finding of the “2023 CFO Outlook Report” by OneSource Virtual is how finance chiefs managing the talent shortage amid the macroeconomic environment. The research found that 83% of CFOs surveyed have already enacted a hiring freeze or will do so. When asked about staffing in light of a potential recession, 53% of CFOs surveyed said their teams are staffed appropriately. But almost a third (32%) described their teams as understaffed. Ninety-five percent said the current skills shortage will impact their decision to outsource finance and accounting tasks, according to the report. The findings are based on a survey of more than 100 CFOs in mid-October. 

Courtesy of OneSource Virtual

Going deeper

Here are a few weekend reads:

“‘10 cents on the dollar’: What happens if Sam Bankman-Fried’s empire is forced into a fire sale of its investments” by Leo Schwartz and Anne Sraders

“Top economist Justin Wolfers says these 4 things show that inflation is coming down for real this time” by Tristan Bove

“The jobs that built America’s middle class are disappearing, intensifying its downfall” by Trey Williams

“We can all relate to that afternoon slump. Here’s how to feel less depleted at the end of the day” by Alexa Mikhail

Leaderboard

Here’s a list of some notable moves this week:

Tania Secor was named CFO at Integral Ad Science Holding Corp. (Nasdaq: IAS), a tech company that analyzes the value of digital ad placements, effective Dec. 5. Secor will lead the global finance team and report directly to Lisa Utzschneider, CEO of IAS. Most recently, Secor served as global CFO of R/GA and Reprise, Interpublic Group’s digital innovation and digital media agencies, respectively. Previously, Secor held CFO and other senior finance positions at Medidata Solutions, Dataminr, Gerson Lehrman Group, Bloomberg Digital Media, and McGraw-Hill. Secor spent nearly a decade in investment banking at JPMorgan and investing at Weiss, Peck & Greer Private Equity Group.

Deborah Thomas, EVP and CFO at Hasbro, Inc. (Nasdaq: HAS), a global entertainment company, plans to retire. Hasbro is conducting an internal and external search for a successor. Thomas will remain as CFO until her successor is in place. She joined the company in 1998.

Robert J. Stefani was named SVP and CFO of Southwest Gas Holdings, Inc. (NYSE: SWX), effective Nov. 30. Stefani succeeds Gregory J. Peterson, who will retire. Stefani will serve as a member of the Southwest Gas executive team. He comes to the company from PECO Energy, where he was SVP, CFO, and treasurer. Before joining PECO, he served as the VP of corporate development at Exelon, PECO’s parent holding company. Stefani also worked within Caterpillar Inc.’s Strategic Investments team. 

Carl Anderson was appointed CFO at XPO Logistics, Inc. (NYSE: XPO), effective Nov. 8. Anderson most recently served as CFO of Meritor, Inc., a global supplier of OEM and aftermarket parts. His 25-year career in transportation includes several leadership positions with Meritor. Earlier, with General Motors Acceptance Corporation, he served as senior manager, structured finance, and senior financial analyst for the financial planning group. 

Jan Kees van Gaalen was named CFO at Energy Vault Holdings, Inc. (NYSE: NRGV, NRGV WS), a sustainable energy storage solutions company, effective Nov. 16. Van Gaalen most recently served as interim CFO at OneSpan, a digital agreements security software company. Previously, he was CFO of C&J Energy Services, a provider of oilfield services. Before C&J, van Gaalen was CFO of Kennametal, a global provider of metalworking products and tools.

Courtney E. Sacchetti was named EVP and CFO at Bankwell, effective Jan. 1, 2023. The commercial bank’s parent company is Bankwell Financial Group (Nasdaq: BWFG). Sacchetti has served for the past six years as director of financial planning and analysis for the company. She began her career at GE Capital in the Financial Management Program and held various finance and regulatory positions of increasing responsibility over her 18-year career at that company.

Overheard

“What’s going on in crypto in the last few days is going to scare people and is going to scare regulators into action.” 

—Former U.S. Treasury secretary Larry Summers warned in a conversation with The Information that increasing troubles at FTX, previously one of the largest crypto exchanges in the world, could result in increased federal regulation of the crypto world, Fortune reported.