Google Hires Wall Street Powerhouse Ruth Porat as CFO
Silicon Valley's notorious boys club just went a little more co-ed. On Tuesday, Google announced the hire of Morgan Stanley chief financial officer Ruth Porat, who has been called "the most powerful woman on Wall Street" as the company's new CFO. Porat, who starts at Google on May 26, replaces Patrick Pichette—he plans to retire to spend more time with his wife and travel.
"We're tremendously fortunate to have found such a creative, experienced and operationally strong executive," said Google cofounder and CEO Larry Page in a news release. "I look forward to learning from Ruth as we continue to innovate in our core—from search and ads to Android, Chrome, and YouTube—as well as invest in a thoughtful, disciplined way in our next generation of big bets."
Porat started at Morgan Stanley in 1987 working in mergers and acquisitions and has held many roles at the company, including leading both the Equity Capital Markets technology business and the Global Technology Group. Before being appointed to CFO and executive vice president in 2010, she also served as the global head of the Financial Institutions Group. During the recent recession, she also led a team that advised the U.S. Treasury on the Fannie Mae and Freddie Mac crisis.
As CFO, Porat will report directly to Page. Whether or not she will earn as much as her predecessor remains to be seen. Pichette's compensation of $62.2 million between 2010 and 2013 is reportedly double what Porat earned in that same time period. According to Reuters, Google has not shared how much Porat will be paid at her new post.
"I'm delighted to be returning to my California roots and joining Google," said Ruth Porat in Google's release. "Growing up in Silicon Valley, during my time at Morgan Stanley and as a member of Stanford's Board, I've had the opportunity to experience firsthand how tech companies can help people in their daily lives. I can't wait to roll up my sleeves and get started."
The shift from the white-shoe firms of Wall Street to the tech world has been an appealing one for many bankers and executives who have found themselves working under tight restrictions following the financial crisis. As John Lonski, chief capital markets economist at Moody's Analytics, told The Los Angeles Times: "If you're a CFO of a major bank, you are spending a good deal of your time dealing with compliance and regulatory issues. And you're doing that a lot less if you're at a dynamic and growing tech company. That's a big difference between the two."
Porat follows in the footsteps of other Wall Street alumni who have successfully made the transition. In 2010, Facebook CFO David Wehner left his banking job to work for the gaming company Zygna, the role he held before moving over to work for Mark Zuckerberg. In 2012, Anthony Noto left his position at Goldman Sachs to become Twitter's CFO. And just a few months ago, Snapchat poached Credit Suisse banker Imran Khan.
The hiring of a women to a prominent position at tech power like Google comes at a crucial time for Silicon Valley, which has faced criticism for its treatment or women—and lack of women altogether. On the same day of Google's announcement regarding Portal, a jury heard closing arguments in the case of Ellen Pao vs. Kleiner Perkins Caufield & Byers . Pao, the interim CEO at Reddit, was fired from the venture capital firm in 2012 shortly after filing a sexual discrimination lawsuit against the company. Pao's lawyer stated that the firm was run "like a boys club" and that Pao "drove the returns" but "the men received the promotions."