Dive Brief:
- State Street CFO Eric Aboaf will join credit ratings firm S&P Global as its CFO, effective in February or “in no event later than March 25, 2025,” S&P said Tuesday in a filing with the Securities and Exchange Commission.
- Aboaf will remain with State Street through the filing of its annual 10-K for fiscal 2024, the Boston-based bank said last week in an SEC filing. State Street has begun a formal “internal and external search process” for Aboaf’s successor, the bank said.
- In a separate release, State Street also announced its third-quarter earnings Tuesday, reporting a 73% year-over-year jump in profit and a 21% increase in revenue.
Dive Insight:
Aboaf has served as State Street’s CFO for nearly eight years and as vice chair since May 2022, according to his LinkedIn profile. He came to State Street from Citizens, where he was CFO for nearly two years. He also logged a 12-year stint at Citi, where he served as treasurer and CFO of the bank’s institutional clients group.
The move to S&P Global takes Aboaf out of banking but gives him a compensation bump. He’s 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,” S&P said Tuesday. Aboaf is also in line for a one-time $5.9 million equity award from S&P Global.
Aboaf will receive an annual base salary of $825,000 and will be eligible for a short-term incentive for 2025 worth up to $1.8 million and will receive equity awards for next year with a target incentive of $6.5 million, S&P said Tuesday.
As State Street’s CFO, Aboaf received $7.8 million in total compensation for 2023, according to the bank’s April proxy statement. That broke down to a $700,000 base salary, $4.7 million in stock awards, $2.3 million in non-equity incentives and $113,910 in other compensation.
The CFO appointment comes after S&P announced in June that its CEO, Douglas L. Peterson, would be stepping down from his role. Martina L. Cheung, previously president of S&P Global Ratings, is set to succeed Peterson at the start of November.
Aboaf 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,” Cheung said in a statement Tuesday.
During State Street’s Q3 earnings call Tuesday, Aboaf cited “mixed feelings” about leaving.
“It has been incredibly rewarding serving as CFO of a global systemically important financial institution. I am grateful for the opportunity to have worked with State Street’s impressive leadership team during my tenure,” Aboaf said in a release issued by the bank Tuesday. “State Street is well-positioned with its strong financial foundation and strategy for success.”
State Street has made “meaningful progress” in improving its profitability, an analyst on Tuesday’s earnings call said but asked how durable those improvements would be with a new CFO taking the reins next year.
“I wouldn’t anticipate a new CFO signaling any kind of change in strategy,” CEO Ron O’Hanley said on Tuesday’s call. 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,” O’Hanley said.
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 and Fitch Ratings — for improper handling of electronic communications. Moody’s also agreed to pay a $20 million penalty, while Fitch agreed to pay $8 million.
