Amazon CFO Szkutak Retiring With Olsavsky Named SuccessorJames Callan and Spencer Soper
Amazon.com Inc., the world’s largest online retailer, said Chief Financial Officer Thomas Szkutak will retire in June 2015 and will be succeeded by Brian Olsavsky.
Olsavsky, 51, currently Amazon’s vice president of finance for the global consumer business, will work with Szkutak over the next 10 months ahead of the transition, the Seattle-based company said today in a statement.
Olsavsky, who has been at Amazon since 2002, will be responsible for managing expenses as Jeff Bezos, the company’s chief executive officer, continues to sacrifice profits in favor of investing in cloud computing, warehouses and gadgets such as the Fire smartphone. While the stock jumped 59 percent last year, it has dropped about 15 percent this year, signaling investors’ concern about rising costs.
“The key thing with Tom and his successor is managing to strike that balance between investment and profitability, which has been weighing on investors’ minds,” RJ Hottovy, an analyst at Morningstar Inc. in Chicago, said in an interview. “The next CFO will have to make clear that they are weighing that balance.”
Amazon fell 1 percent to $339 at the close in New York.
Craig Berman, a spokesman at Amazon, said Szkutak and Olsavsky weren’t giving interviews.
Szkutak’s departure is the latest CFO change among technology companies. Apple Inc., Facebook Inc. and Twitter Inc. have all replaced their CFOs this year. Apple and Facebook both promoted finance executives who were already at the companies to the role, while Twitter reached outside to appoint a veteran investment banker.
During Szkutak’s 12-year tenure as CFO, Amazon’s annual sales grew 15-fold. Szkutak, 53, was previously CFO at GE Lighting and also an executive at General Electric Co.
Szkutak reaped millions of dollars in compensation for his work. In the past five years, his compensation totaled almost $15.6 million, including $14.9 million in stock awards, according to data compiled by Bloomberg.
Olsavsky, who has held various positions in finance at Amazon, previously worked at Fisher Scientific International. He graduated from Penn State University.
Michael Pachter, an analyst at Wedbush Securities in Los Angeles, said Szkutak didn’t speak to investors beyond earnings conference calls, which differentiated Amazon from other technology companies.
Since the new CFO is an Amazon insider who worked with Szkutak for more than a decade, not much is likely to change, Pachter said.
“I don’t expect Amazon to become more investor-friendly and I don’t expect them to become more transparent,” he said. “I expect them to continue to run Amazon the way they want to run Amazon.”
Expenses at Amazon jumped 24 percent to $19.4 billion in the second quarter. Bezos has also been spending on content, including $100 million to produce TV shows to watch through Amazon’s Instant Video service, a music-streaming service and a book-subscription plan.
Last week, Amazon announced its second-largest acquisition ever, agreeing to buy Twitch Interactive Inc. for $970 million. The deal, which topped Google Inc.’s pursuit of the startup, gives Amazon an online forum of more than 55 million monthly active users, where people discuss video games or watch others as they play.
Hottovy, the Morningstar analyst, said Amazon may face challenges in international growth.
“The last couple of years, it’s been clear that Amazon is making international growth a priority, and to strategize the key markets is going to be key,” Hottovy said. “A lot of that will be in tandem with what Jeff decides, but the CFO will be key to helping that.”
In July, Amazon reported a second-quarter loss of $126 million, more than double what was predicted, even as sales climbed 23 percent to $19.3 billion.