The Kraft Heinz Company disclosed in an 8-K filing its CFO, David Knopf, will be departing the company, and “seasoned veteran” Paulo Basilio will assume his role, effective next month.
Kraft Heinz is one of a slew of businesses in the past several years to restate earnings. Among the others are Seneca Foods Corp., Camping World Holdings, Inc., and PPG Industries Inc., the Wall Street Journal reported.
- The CFO shift follows a year of troubles for Kraft Heinz. The company disclosed a subpoena from the SEC related to its accounting policies and internal controls and took a $15.4 billion write-down on two of its biggest brands.
Kraft Heinz announced last May it would restate its 2016-17 financials “after a review into its procurement and accounting procedures—prompted by the SEC subpoena—discovered employee misconduct,” CNBC said. No members of the C-suite were named in the review.
Under the announced CFO transition, Basilio, a past CFO at the company who serves as Kraft Heinz’s chief business planning and development officer, will work alongside outgoing CFO Knopf for about a month before taking over as finance chief, the company said in the filing. Knopf is slated to return to 3G Capital, where he has been a partner since 2015.
Knopf became CFO in 2017 at 29 years old, the youngest in the company's history. Knopf previously led 3G Capital's $11 billion Burger King-Tim Hortons acquisition and then joined Kraft Heinz following the two companies' $45 billion merger, according to a report by Fortune.
Kraft Heinz likely hired Knopf because he “really understood the private equity model, and at the time, that would’ve made sense,” Russell Raath, president of Kotter, a strategy execution and change management firm, told CFO Dive. “[Kraft Heinz] is a $30 billion market capital company, and [hiring Knopf] had everything to do with his experience.”
Raath told CFO Dive that following its 2015 merger, Kraft Heinz was likely searching for a CFO “specifically with private equity experience,” which Knopf had.
But given the run of troubles the company's had, it's now transitioning the role back to Knopf's predecessor Basilio to help restore confidence. “We do not view the CFO transition as surprising given the erosion of investors’ confidence, multiple impairment charges, and a tedious accounting investigation,” Wells Fargo analyst John Baumgartner wrote in a research note reported by Chicago Business. “Now is a good time for a reset.”
Nina Barton, president of Kraft Heinz operations in Canada and the executive in charge of the company's digital growth, will assume the new role of chief growth officer, according to the filing.
Earlier this month, Kraft Heinz “withdrew its outlook for the year” after writing down the value of Oscar Mayer and Heinz and restating financial results for “a near three-year period after an internal investigation into lapses in procurement practices by some of its employees,” according to a Reuters report.
Kraft Heinz has also been caught up in a wheat futures trading issue, which it settled last week with the Commodity Futures Trading Commission for $16 million.