One month after Alibaba appointed a new CEO, it announced yesterday that it will replace its chief financial officer at the same time as well. Investors needn’t worry about the continuity at the top though – the new finance chief has been groomed for the job for a long time and the existing CFO is moving up in the organisation rather than stepping down.
In a report posted on Alizila, a website dedicated to news and commentary about the Alibaba Group, the company said that Maggie Wu will become its new CFO from May 10, taking over from Joe Tsai who will assume a new role as executive vice-chairman.
Wu has been with the Alibaba Group since July 2007 and is well-known by international investors already since she served as CFO of the group’s Hong Kong-listed online trading platform Alibaba.com. She was instrumental in setting up the financial systems and organisation for that subsidiary ahead of its IPO in Hong Kong in November 2007 and co-led the privatisation of the same unit last year.
After Alibaba.com was delisted in June 2012, Wu became responsible for overseeing key aspects of Alibaba Group’s finance organisation, including operations finance, reporting, internal control, tax and treasury. She was also appointed deputy group CFO under Tsai in October 2011, making it fairly clear that she was being groomed for the group’s top finance job.
During her time as CFO of Alibaba.com Wu was voted the best chief financial officer of a Chinese company by a FinanceAsia poll of investors and analysts in 2010.
She also knows Alibaba’s new CEO Jonathan Lu well since he took over as CEO of Alibaba.com in early 2011 and helped to oversee the privatisation of the company last year. As reported earlier, Lu will take over the CEO role from Alibaba founder Jack Ma on May 10. Ma will assume a role as full-time executive chairman and is expected to remain deeply involved in the strategic development and growth of Alibaba’s many individual businesses and the group as a whole.
Ma will now get some help in that job from the new executive vice-chairman. According to the Alizila report, Tsai will continue to oversee Alibaba Group’s strategic investments and will also focus on the firm’s external relations with financial and other key constituents.
Tsai is one of the 18 co-founders of Alibaba and its only CFO so far. He has also been a member of the board of directors since the company was set up in 1999 as a platform for Chinese exporters to connect with international buyers.
He is relinquishing the CFO job after a busy year. In addition to the privatisation of Alibaba.com through a $2.5 billion offer to minority shareholders, the group also repurchased half of Yahoo’s shareholding in Alibaba Group at a total cost of $7.6 billion. Tsai was deeply involved in the record-breaking debt and equity financing package needed to complete these two transactions and was named the Capital Markets Person of the Year for 2012 by FinanceAsia for his efforts.
Together with his team he has also led a number of other landmark transactions during his time as CFO, ranging from the early rounds of venture capital funding and Yahoo’s $1 billion investment in the company in 2005, to the $2 billion investment by major private equity and sovereign wealth funds in 2011.
Given his experience, it is somewhat surprising that Tsai is leaving the CFO job just as Alibaba is preparing for an IPO of the entire the group. However, one banker noted that if a transition is in the cards, it makes sense to complete it before the listing rather than wait until six months afterwards when it could risk upsetting new shareholders. It is also likely that Tsai will still be heavily involved with the IPO in his new role as executive vice-chairman.
The Alibaba IPO is expected to come either late this year or early 2014 and is one of the most anticipated listings in Asia at the moment, thanks to a talked-about equity valuation of up to $70 billion – some $30 billion more than the valuation implied by Alibaba’s acquisition of shares from Yahoo just over six months ago.
The appointment of a new CFO after 14 years is also in line with what Ma said when he announced his own decision to step down from the CEO role, namely that he wanted to make room for “the next generation of Alibaba people (who) are better equipped to manage and lead an internet ecosystem like ours”.
“We have built up a team of strong leaders who are ready to step up and take the company into its next phase,” Tsai said yesterday. “Maggie and her team are an extremely talented group, and I have full confidence that they will continue to strengthen our finance organisation and support the rapid growth of our business.”
Wu will have the support of senior vice-president Michael Yao, a former Rothschild co-head of Hong Kong who was hired by Alibaba in October last year to manage the group’s banking and capital markets activities, and vice-president Samuel Yen, a veteran of the group who is in charge of the company’s financial reporting and analysis. The finance team also includes vice-presidents Jessie Zheng, a former audit partner at KPMG who joined the company two years ago, and Angel Zhao, who has managed various finance operations within the group for the past eight years.
Before joining Alibaba, Wu spent 15 years with KPMG, where she was the lead audit partner for IPOs and audits of several large-cap Chinese companies listed outside the mainland and also provided audit and advisory services to major multinational companies operating in China.
