Google poaches Morgan Stanley's CFO
By Alexei Oreskovic and Lauren Tara LaCapra
SAN FRANCISCO/NEW YORK (Reuters) - Google Inc hired Morgan Stanley Chief Financial Officer Ruth Porat as its own finance chief, a sign Google is aiming to rein in costs as it invests in new businesses such as self-driving cars and internet-connected eyeglasses.
Porat has helped execute a sweeping cost-cutting strategy across several business lines at Morgan Stanley. The bank cut its expenses, excluding compensation, to 29 percent of its revenue last year, down from 34 percent in 2012.
Google's costs have jumped as the company embarked on an increasing number of ambitious projects. Last year, the company's revenue grew 19 percent, while total expenses rose 23.4 percent, a trend that alarmed some analysts.
"You want someone to come in there and push back against the free spenders," said Colin Gillis, an equity research analyst at BGC Partners, a brokerage, adding that investors hope Porat will be that person.
Google's shares rose as much as 2.5 percent on Tuesday after Porat's appointment was announced by both companies. She will start her new job on May 26.
Porat is the latest among a string of Wall Street executives to leave an industry that is increasingly regulated to move into the more free-wheeling technology sector, where fortunes can be built fast but businesses can also become irrelevant overnight.
Total compensation to Google's departing CFO was twice as much as Porat's for the three years through 2013 - $62.2 million vs $29.6 million, according to public filings by the companies. Google has not disclosed how much it expects to pay Porat.
She joined Morgan Stanley in 1987, and led Morgan Stanley's investment banking business for tech companies during the Internet boom, working with Amazon.com Inc and eBay Inc, among others. Continued...