A CEO of a privately-held company contacted me recently about their Head of Tax retiring. I call the Head of Tax or VP Tax by the acronym “HOT” because the great ones are really on fire when it comes to saving a company revenue that otherwise would be lost forever. In this case, the company CEO hired the Head of Tax many years ago and what was remarkable was the CEO deeply appreciated and valued their work. He recognized the VP Tax saved the company hundreds of millions over the years; he recognized the value the VP Tax brought to the organization overall. It was refreshing to be part of this conversation and listening to the CEO discuss his sincere appreciation for the outstanding contributions of the VP Tax. Frankly, it is not too often that I hear a CEO talk about how much they appreciated and admired their Head of Tax. Whenever I do hear these comments from a CEO, it is very clear this is a company who is working smart with their tax organization.
The CEO asked me to talk to their retiring VP Tax and as I did it was a reminder of how remarkable and thoroughly trained the seasoned tax executive was for this organization. After spending an hour on the phone with him (which seemed like 15 minutes), I was mesmerized by his tax ideas and the nuances he discovered in the tax code. The VP Tax brought extraordinary business tax strategy and ideas to the company. We discussed strategies the company uses to create considerable tax savings that I believe many would miss. This VP Tax is incredible and will be tough to replace when he retires. The VP Tax has technical skills that are extraordinary and the company benefits from this knowledge continually. Corporate tax professionals like this are valuable treasures to an organization as this CEO learned.
CEOs and CFOs who respect their VPs Tax and let them know they appreciate their work will intrinsically motivate them to excel. It is a beautiful partnership to observe in upper management and it absolutely contributes to the overall financial health of an organization. In my opinion, this company has been largely successful because they listened to their VP Tax over many years teach them how to save tax dollars over the short term and long term. I should also mention that in my private conversations with lead tax executives over the years, the one thing that can frustrate a lead tax executive is to go to a CEO with a strategy to save millions of dollars only to have their ideas tossed to the side. Corporate tax professionals are highly educated and very thoughtful leaders and they typically will not go to a CEO unless they have something really worth talking about in terms of tax savings.
What I have learned over many years is the importance of understanding the valuable relationship between the tax organization and the CEO and/or CFO. Whenever a company asks to retain me to conduct a search for a senior tax executive, I want to know how they are going to interact with their tax executive. What is management’s view of their tax organization? Does the upper management work collaboratively with their Head of Tax? Do they view the tax department as revenue generating? Do they understand the treasure in the tax department? Whenever I meet a CEO of CFO who loves their Head of Tax, there is no doubt in my mind they are working collaboratively. Where there is close collaboration between the CEO or CFO and the VP Tax there is success in an organization! You can count on it!
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