The popular search engine Google announced Ruth Porat as new CFO (chief financial officer). The company is probably looking for a new strategy in order to cut down on expenses.
Google has invested important sums in recent projects, from self-driving cars to smartglasses. In 2014, the company recorded a 19 percent rise in income but the total expense saw a 23.4 percent increase. This phenomenon sparked concerns among some analysts.
This might be the reason behind Porat’s hiring. As Colin Gillis, an equity research analyst at BGC Partners explained, Google needs someone “to come in there and push back against the free spenders”. And Ruth Porat, 57, is the right person for that. She gained enough experience while working as financial chief at Morgan Stanley where she implemented a series of cost-efficient strategies.
She became a member of Morgan Stanley in 1987 being responsible for the company’s investment banking business for tech companies during the “Internet boom”, collaborating with clients such as Amazon.com Inc. and eBay Inc.
She later led the investment banking business on behalf of various financial companies. When the financial crisis broke out, she became the main representative in situations concerning regulators and government officials in Washington. She was the head of Morgan Stanley teams that advised the United States Treasury on Fannie Mae and Freddie Mac and the New York Federal Reserve Bank on American International Group Inc. during those difficult financial times.
She was a strong candidate to follow current Morgan Stanely CEO James Gorman. But she decided to go another way and join Google beginning May 26.
Porat is just one of several Wall Street executives to have left an industry that is becoming stiffened by regulations in favor of a more flexible business sector where great sums can be made overnight but lost just as fast.
Any Noto, for example, former investment banker at Goldman Sachs Group Inc., became Twitter’s new CFO. In 2012, an important Morgan Stanely tech analyst decided to leave the company to join Kleiner Perkins.
Google’s last CFO Patrick Pichette announced his resignation on March 10. During his three year stay, Pichette’s total income reached a sum double of what Porat had made in the same period: $62.2 million vs. $29.6 million. Porat’s future compensation has not been disclosed by Google.
Image Source: Fonds Professionell
