Dive Brief:
- Credit ratings firm S&P Global announced State Street CFO Eric Aboaf will be joining the New York-based company as its CFO, with the appointment expected to be effective in February 2025 or “and in no event later than March 25, 2025,” according to a Tuesday securities filing.
- Aboaf, 60, will remain with State Street Corporation through the filing of the financial services provider’s annual 10-K for its fiscal 2024, according to a filing with the Securities and Exchange Commission. State Street has begun both a formal “internal and external search process” for Aboaf’s successor, according to the filing.
- In a separate release, State Street also announced financial results for its third quarter Tuesday, reporting a 21% increase in total revenue to $3.2 billion.
Dive Insight:
The move to S&P Global represents a departure from the banking industry for Aboaf after a decades-long career in the sector.
Aboaf has served as the Boston-based State Street’s CFO for nearly eight years and was appointed to the role of CFO and Vice Chairman in May 2022, according to his LinkedIn profile. Prior to State Street, he served as CFO for Citizens, and previously logged a 12-year tenure at Citigroup, where he held roles including treasurer and CFO of the bank’s institutional client group.
The move to S&P Global comes with a pay bump for Aboaf, with the incoming CFO set to receive a one-time signing bonus of $2.4 million “in light of the compensation from his current employer that he will be forfeiting,” according to the credit ratings firm’s Tuesday filing.
He will receive an annual base salary of $825,000 as CFO, according to the company filing. He will also be eligible for a short-term incentive opportunity of $1.8 million and will receive equity awards for 2025 with a target incentive of $6.5 million, according to the filing.
As State Street’s CFO, Aboaf received total compensation of $7.8 million for the full year 2023, according to the bank’s latest proxy statement filed in April. His compensation was comprised of a $700,000 base salary, $4.7 million in stock awards, $2.3 million in non-equity incentives and $113,910 in other compensation.
For S&P Global, the CFO appointment comes after the credit ratings firm announced in June that its CEO Douglas L. Peterson would be stepping down from his role, with Martina L. Cheung appointed as his successor. Cheung is set to assume her roles as CEO and president at the start of November, with Peterson remaining with S&P Global until Dec. 31, 2025 as a special advisor, according to the announcement.
The State Street CFO “brings a wealth of experience in financial services having held CFO roles for multiple publicly traded companies,” Cheung said in a statement included in the company’s Tuesday press release. Aboaf also has a “well-established record of driving sustainable growth,” which will “help ensure we continue to deliver strong value for our shareholders in alignment with our strategy.”
Aboaf’s appointment also comes about a month after S&P Global announced a settlement with the SEC for recordkeeping violations, where the company agreed to pay a $20 million penalty. The settlement followed an industry-wide investigation by the SEC, which charged six credit ratings firms — including S&P Global, Moody’s Investor Service and Fitch Ratings — for improper handling of electronic communications, CFO Dive previously reported. Along with S&P Global, Moody’s also agreed to pay a $20 million penalty, while Fitch agreed to pay $8 million.
The fines were issued during a period of increasing enforcement by the SEC, which has imposed fines as high as $125 million for recordkeeping violations, CFO Dive previously reported. In late September, the SEC separately fined 12 investment advisors, broker-deals and financial service providers a collective $88 million for similar recordkeeping failures regarding electronic communications.
Aboaf cited “mixed feelings” about his move from State Street during the company’s Q3 earnings call Tuesday, where the company reported a boost in net income to $730 million, a 73% year-over-year jump.
His departure also raised questions related to the bank’s future strategy; during its Q3 earnings call, an analyst noted the bank had made “meaningful progress” in improving its profitability, but questioned executives on the durability of such improvements given that a new CFO will be taking the reins next year.
“I wouldn’t anticipate a new CFO signaling any kind of change in strategy,” CEO Ron O’Hanley said in response to the question. The search for Aboaf’s successor has already commenced, with the company engaging an executive search firm, he said, but State Street is “very confident, coupled with the plan we have in place, the four months of transition we have with [Aboaf], and just the overall performance of the firm, that we’re going to be in good shape for this transition.”
The rise in profit was driven by a combination of higher fee revenues and net income, with the bank reporting $2.6 billion in fee revenue for the quarter — an 11% rise year-over-year.
S&P Global declined to comment beyond its press release. State Street did not immediately respond to requests for comment.