A suicide investigation highlights how intense the pressure is on CFOs

Zurich Insurance Group found no evidence of “undue pressure” on CFO Pierre Wauthier, who committed suicide in August.
Zurich Insurance Group found no evidence of “undue pressure” on CFO Pierre Wauthier, who committed suicide in August.
Image: Reuters/Arnd Wiegmann
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The August suicide of Pierre Wauthier, the CFO of Zurich Insurance Group, rocked the staid Swiss insurer. Yesterday, Zurich released a terse statement on its investigations into Wauthier’s death. Overseen by Swiss authorities, the company found no evidence of “undue or inappropriate pressure” placed on the CFO, nor any management failings or financial irregularities at the firm. “We are still deeply saddened by the loss of Pierre Wauthier and we are unable to explain the motivation behind his tragic decision,” said Zurich chairman Tom de Swaan.

Most reports of Wauthier’s death mention a rocky relationship with Josef Ackermann, the firm’s chairman, exacerbated by missed financial targets and disagreements over how to communicate them with investors.  The finance chief reportedly cited pressure from Ackermann in his suicide note, and Ackermann resigned shortly thereafter, strenuously denying any link to the tragedy. But the company’s investigation suggests Wauthier’s true motives for taking his own life remain mysterious.

Even when not “undue or inappropriate,” though, the pressures on top executives—and especially on CFOs—can be intense. CFOs have shorter tenures on average than CEOs, and serve as useful scapegoats when things go wrong. One study found no difference between the pay of CFOs at companies caught manipulating earnings and those with pristine accounts. The CEOs, on the other hand, enjoyed higher performance-related pay at companies that falsified earnings.

That suggests that “CFOs are involved in material accounting manipulations because they succumb to pressure from CEOs, rather than because they seek immediate personal financial benefit from their equity incentives,” the study found. Inevitably, CFOs are described as the “architects” of frauds, with chief executives pleading ignorance of a company’s financial inner workings.

And even when there’s no fraud,  the work-life balance of finance chiefs at large listed companies often leaves much to be desired. Investors expect number crunchers to achieve near omniscience of a company’s performance, and increasingly blame them for shortfalls in executing strategy instead of just reporting on it—witness the recent gripes about Tesco’s Laurie McIlwee. When a former Bank of America CFO resigned after just over a year in the job, he said “the CFO of a well-run company gets all of the guts but none of the glory.” The former finance chief of British support services firm Amey went further, describing the juggling of increasingly complex duties as like “a little cup of sick and I’m not going to drink it.”