TO BE A VICE PRESIDENT of finance these days, you pretty much need a de facto degree in PR. That's right, it's not about bean counting. “Typically, what they're doing is building the lines of credit with bankers; they're doing road shows to raise equity; they're the guys who are communicating to Wall Street; they're coming up with creative solutions for how to structure deals for huge pieces of land,” says Bill Carpitella, CEO at the Sharrow Group in Rochester, N.Y.
Because of the dynamic and fluid role that the position has evolved into, two trends are simultaneously occurring: First, the turnover isn't unusually high. “It's a high-flying job,” says Carpitella. “You're creating a lot of value and there's high impact, so whoever is in that job is feeling pretty good about what they're contributing. It's usually never boring because whether you're going through an acquisition or raising capital or dealing with Wall Street, it's a sexy scenario to be in. And they're usually compensated pretty well, which is a turn-on.”
Second, demand for the talent is high. While the biggest builders likely have found (or developed) people to fill the role, many mid-sized players are discovering that they may not have anyone with the vast array of skills necessary to take the company to the next level. Those are the ones driving demand. “They need someone who can make an immediate impact on their business,” says Crystal Miller, search consultant for residential construction at Plano, Texas-based Kaye/Bassman International.
VPs usually have either a master of finance degree or an MBA, says Carpitella. Many came up through one of the “Big Four” accounting firms or from the investment analyst side—ideally covering home building.
CRITICAL NUMBERS The CEO and other executives inevitably rely heavily on the controller, who produces the reports that allow them to see precise costs of doing business. The controller also might be involved in determining return on investment on land purchases. “It's basically the guy who has payroll underneath him, payables, receivables, general accounting, general ledger—and they're the go-to person when it comes to the numbers of the business,” says Carpitella.
Typically, controllers have about seven years of experience, with a CPA or at minimum an undergraduate accounting degree. “It's somebody who came up through the auditing ranks usually, somebody familiar with GAAP [Generally Accepted Accounting Principles].”
Carpitella says that, while the booming home building industry of the last few years has created a lot of need for controllers, the high number of qualified people has kept salaries in check. Because of the number-crunching nature of the job, which can become tedious, Carpitella calls the turnover rate “moderate.” Controllers sometimes come directly from other industries, but a word of caution: Carpitella's firm has found that the probability of success is less when they come from outside the industry.
Because the accountant position is more entry-level, you might think that turnover would be high. Not the case, says Carpitella. Accountants typically are in paying-dues mode, confident they'll eventually have a good shot at controller. Still, Miller says that she has seen salaries increase by about $5,000 this year.
INTERDISCIPLINARY TRACK Perhaps the thing to remember about finance staff is that they are commodities with an invaluable knowledge base. In fact, they can be promoted clear up to division president, perhaps after spending time in other areas. “The flexibility in finance is rather exciting,” says Miller, noting that the discipline touches all areas of the business. Pulte, for example, will take a division finance VP and put him in a director-level position in its land operations to learn that side of the business, she says.
Sometimes, though, finance folks may not realize the knowledge capital they're sitting on. Recently, Miller had a builder client that had been turning over rocks in vain looking for a VP of purchasing candidate with a solid knowledge of finance. Miller called a controller at another builder, thinking he might make a great candidate because of his experience with the cost side of purchasing and estimating as well as his account management and analytical abilities. The initial reaction from the controller? Puzzlement, at the thought of being recruited for a purchasing job. But then, “A light bulb went off,” says Miller. “They said, ‘Hey, I can do that.' ”