Google CFO Reyes plans to retire by end of year
Google Inc said on Tuesday finance chief George Reyes plans to retire, ending a bumpy five-year ride for an executive charged with trying to manage ferocious growth while upholding a policy of refusing to give financial forecasts.
As chief financial officer, Reyes, a veteran Silicon Valley financial executive, worked out of the public spotlight in a company led by its two co-founders, Larry Page and Sergey Brin, and its chairman and chief executive, Eric Schmidt.
Reyes, 53, helped spearhead the initial public stock offering of the world's top provider of Web search and online advertising services in August 2004. The stock has risen fivefold in the three years since then.
But Google investors received a shock in July when a surprise 13 percent jump in second-quarter hiring and rising operating expenses led to a rare profit disappointment.
The stock, which traded upward of $550 in mid-July, has declined since then, closing at $506.40 on Tuesday.
"They need a higher-caliber CFO, many people on Wall Street will tell you," said Martin Pyykkonen, a financial analyst with Global Crown Capital. "He had a couple of snafus."
Pyykkonen said the recent quarter had exposed a lack of internal financial controls that could have helped to rein in Google's aggressive hiring and averted the disappointment.
As a financial manager, Reyes played a notably subservient role within a company famously led by and for engineers. Efforts by Google's leadership to keep Wall Street at arm's length further marginalized Reyes role as a senior executive.
Google's spectacular growth in revenue and profit served to mask investors' concerns about Reyes, the analyst said. Wall Street analysts expect Google revenue to more than double its 2006 level by the end of 2008, growing to $21.8 billion.
"When the machine has been running on autopilot, you can hide a lot of inefficiencies," Pyykkonen said.
Reyes will help in the search for his replacement, and the Mountain View, California-based company expects the transition to be completed by the end of the year.
His total compensation package was worth about $1.7 million in 2006, according to the company's annual proxy statement. He held stock options at the end of last year that would have yielded him $23.6 million, according to the government filing.
Reyes previously served as interim CFO of optical networking equipment company ONI Systems before it was sold to network communications gear maker Ciena Corp in 2002.
For 13 years, he held various financial executive positions at computer maker Sun Microsystems Inc .
Reyes serves on the boards of two Silicon Valley software makers: Symantec Corp and BEA Systems Inc . He was never a member of Google's 10-member board of directors.
He is the uncle of Gregory Reyes, the former chief executive of Brocade Communications Systems Inc , who earlier this month was found guilty on all counts in the first U.S. criminal trial for backdating of stock options.
As chief financial officer, Reyes, a veteran Silicon Valley financial executive, worked out of the public spotlight in a company led by its two co-founders, Larry Page and Sergey Brin, and its chairman and chief executive, Eric Schmidt.
Reyes, 53, helped spearhead the initial public stock offering of the world's top provider of Web search and online advertising services in August 2004. The stock has risen fivefold in the three years since then.
But Google investors received a shock in July when a surprise 13 percent jump in second-quarter hiring and rising operating expenses led to a rare profit disappointment.
The stock, which traded upward of $550 in mid-July, has declined since then, closing at $506.40 on Tuesday.
"They need a higher-caliber CFO, many people on Wall Street will tell you," said Martin Pyykkonen, a financial analyst with Global Crown Capital. "He had a couple of snafus."
Pyykkonen said the recent quarter had exposed a lack of internal financial controls that could have helped to rein in Google's aggressive hiring and averted the disappointment.
As a financial manager, Reyes played a notably subservient role within a company famously led by and for engineers. Efforts by Google's leadership to keep Wall Street at arm's length further marginalized Reyes role as a senior executive.
Google's spectacular growth in revenue and profit served to mask investors' concerns about Reyes, the analyst said. Wall Street analysts expect Google revenue to more than double its 2006 level by the end of 2008, growing to $21.8 billion.
"When the machine has been running on autopilot, you can hide a lot of inefficiencies," Pyykkonen said.
Reyes will help in the search for his replacement, and the Mountain View, California-based company expects the transition to be completed by the end of the year.
His total compensation package was worth about $1.7 million in 2006, according to the company's annual proxy statement. He held stock options at the end of last year that would have yielded him $23.6 million, according to the government filing.
Reyes previously served as interim CFO of optical networking equipment company ONI Systems before it was sold to network communications gear maker Ciena Corp in 2002.
For 13 years, he held various financial executive positions at computer maker Sun Microsystems Inc .
Reyes serves on the boards of two Silicon Valley software makers: Symantec Corp and BEA Systems Inc . He was never a member of Google's 10-member board of directors.
He is the uncle of Gregory Reyes, the former chief executive of Brocade Communications Systems Inc , who earlier this month was found guilty on all counts in the first U.S. criminal trial for backdating of stock options.
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