CFOs Hiring A Lead Tax Executive: Real Truths You Need To Know

CFOs Hiring A Lead Tax Executive: Real Truths You Need To Know

After thirty-three years, and more than one thousand tax executive searches, I have information of value to share with C Suite Executives responsible for hiring a lead tax executive for their corporate team. Those who pay attention to my tax executive search expertise will benefit greatly, I am happy to share my knowledge with you. This article is written for the C Suite team expecting to hire the very best in the tax profession. When you hire the very best, you gain more financial opportunities for your business organization. Hiring the best in the tax profession is one of the most meaningful hires you will make in your organization. This article will share real life stories of what happens behind the scenes when hiring lead tax executives. Look at our track record of tax executive search experiences as proof we know how to find the very best in the tax profession.

It is helpful to know that every executive search for a tax executive is different and unique. The success of a search is making a match of a good marriage including shared values, the level of respect the organization has for the tax function and leadership, melding of c suite executive personalities and company goals, and short term and long-term compensation package. There are myriad of issues that need to be carefully discussed upfront for a successful search. Placing a tax executive in a corporate organization who has access to a lot of private financial information is one we take seriously. You want to get the search done correctly the first time around and not cut corners anywhere because it can cost a company million (billions) in lost revenue to taxes. I have worked with tax executives who have clawed back billions in what would have been lost revenue to taxes in how they structured their IP and transfer strategies.

Background Tax Executive Search Lesson One

High technology client with 10B plus in revenue with global operations. The client had been searching for a year and the offers kept being turned down. I told them right from the start that the compensation they were offering was not in line with the market. Unless they adjusted the compensation, they would continue to fail to attract the top talent. The problem they were struggling with internally was they would have to adjust the pay grades of comparable executives. I advised them on a variety of solutions that should satisfy human resources and their CEO on compensation management. This particular executive search client had another issue that needed to be dealt with first.

Valuable Lesson Learned: The truth is 95 % of the top tax leaders we work with do not want to report directly to the Controller. However, they will rarely bring it up in the interview. Lead tax executives saving companies millions(billions long term) want to report to the CFO so they can be involved in transactions upfront. Most tax executives we contact about a lead tax role reporting to a Controller respectfully decline. This is the honest- truth companies rarely hear why a tax executive turns down an offer really has a lot to do with how the role is structured in the corporation. Tax executives have a preferred reporting relationship with the CFO and will often turn down offers reporting to the Controller. You will save a lot of wasted time interviewing if this view comes out up front before spending a lot of time with tax candidates. An experienced tax executive search expert will vet this view upfront for clients saving companies valuable time that is wasted on tax candidates you cannot close on an offer after going through multiple interviews. Many companies simply think “ What happened?” Now you know the truth.

Background Tax Executive Search Lesson Two

Companies conducting a search for a tax executive need to understand that they miss an entire population of high performing tax executive candidates because the high earners we find for corporations would only be introduced by private introductions. Most lead corporate tax executives are making compensation packages between $500,000 and many over 1M annually. These tax executives are not interested in taking the risk of letting anyone know they would consider a move to a new company and losing their job. Considering the top tax experts are clawing back millions (billions) annually for companies on what would have been revenue lost forever as taxes. Smart CFOs understand the best of the tax profession are worth much more. I personally know many CFOs and Lead Tax Executive who have formed extraordinary business relationships and are doing a fantastic job for the corporation and investors. They simply do not discuss or brag about their tax technical skills as profit centers for a corporation. CFOS and Tax Executives will work closely together on corporate transactions and look for opportunities to structure deals successfully.

The companies we see performing the best have a CFO and Lead Tax Executives who have aligned strategies and vision as a formidable team for the corporations’ bottom line. They are smart, forward-thinking, and highly strategic. The CFO who hires the best of the tax profession and listens to them succeeds in great ways. With multinational corporations under constant audit from State and Local, Federal, and Foreign revenue authorities to increase tax revenue, the Lead Tax Executive holds one of the most important roles in a corporation today. CEOs and CFOs who respect the lead tax executive, value their highly technical tax expertise, and are willing to compensate them appropriately, will be happy about the decision they make.
Valuable Lesson Learned: The most important and successful relationship a CFO may have is with the lead tax executive they hire. Make certain you find the most technically qualified tax expert and one who has a great personality. Many tax executives we encounter actually have a great personality and are fun. When we conduct a search for a tax executive, we pay close attention to the personalities of the two individuals we will be introducing and connecting. The objective is to have them form a close business relationship. We want them to enjoy working with each other; if they like working together they will have a lot of success together. If they avoid each other due to different personalities, opportunities will be overlooked or missed.

The CFOs I personally love working for are the CFOs who tell me “Kat, I do not know a lot about tax so could you please find me a tax executive who knows how to break tax issues down into a simple language I can understand?” I enjoy finding technically talented tax executives who can take complex tax problems and explain it in language people can understand. Everyone wins when people understand each other. I love my CFO clients for their honesty! This is something a CFO will not tell their Head of HR on a search.

Background Tax Executive Search Lesson Three

I laugh when a client calls and asks if we have someone in my files to access on a tax executive search. Although I have placed and know thousands of tax executives over three decades, each company has a particular set of needs. If someone were to ask me as a single woman what I would search in a boyfriend, it would be vey unique to my personal needs. It is the same when matching a company CFO and management team with a tax executive. You do not just go to your files and pull out any tax professional. You start out with a fresh slate of what the needs are for the corporate client. You look at experience, technical skills, accomplishments, interpersonal skills, the ability to lead and motivate a team, the ability to interact with people within and outside the organization, do they come up with fresh, creative ideas for the never ending challenges faced by corporations with dozens of revenue agents constantly knocking at their doors for information, are they willing to work multiple time zones, are they willing to travel to meet with people in the subsidiaries to explain why you need information and how to provide it in the proper format, is their tax ream properly trained, and a host of other issues that are too many to mention in this article, etc. The point is every tax executive search starts with what each client needs are in the organization.

Valuable Lesson Learned: Tax Executive searches are lengthy and time-consuming projects best placed into the hands of an experienced professional tax executive recruiter to conduct a thoroughly vetted search. Expecting your HR representative to find the very best of the profession is no easy task especially when they are tasked with filling multiple positions in the company. Tax searches are very difficult to do right and best left to an expert who knows how to find and communicate with the most technically talented in the tax profession and convince them to come to the table privately to talk to a client. Most of the time the tax executives we place with clients were not out actively looking for a new opportunity. We are responsible for identifying and pursuing the best experts in the tax profession and making private introductions. The privacy we offer candidates is what makes them comfortable coming forward and being introduced to a company. This is a highly important aspect of retained tax executive search. This is what we are highly trained to do as you can see from our proven track record in tax executive searches.

Have questions regarding a search for a tax executive? Contact or call 858.999.005 X100.

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Kat Jennings, CEO

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