(Bloomberg) — Google Inc. said it hired Ruth Porat, Morgan
Stanley’s chief financial officer, to succeed Patrick Pichette
as its new CFO in May.
Porat, 57, will leave Morgan Stanley in April after 28
years at the firm, the New York-based company said Tuesday in a
memo to employees. Jonathan Pruzan, 46, co-head of global
financial institutions banking, will become Morgan Stanley’s new
CFO.
Porat, one of Wall Street’s most senior female executives,
pivots from a job in which she built up cash reserves for safety
to one where she must figure out how to use Google’s growing
cash pile. In five years as Morgan Stanley’s CFO, the Stanford
University alumna has helped stabilize an investment bank that
almost collapsed in 2008.
“I’m delighted to be returning to my California roots and
joining Google,” Porat said in a statement released by the
Mountain View, California-based Internet company. “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 first-hand how tech companies can help people in
their daily lives. I can’t wait to roll up my sleeves and get
started.”
Silicon Valley has tapped Wall Street bankers to help them
manage the finances associated with their rapid growth. Twitter
Inc. last year named Anthony Noto, 46, previously Goldman Sachs
Group Inc.’s co-head of technology, media and telecommunications
banking, as its CFO.
Long Ties
Google also has long-standing ties to Morgan Stanley, which
was the lead bank on its 2004 initial public offering. Morgan
Stanley and Goldman Sachs have battled in recent years for
supremacy in advising on the biggest technology mergers and
IPOs.
Google said earlier this month that Pichette, 51, who
joined in 2008, is retiring and would remain at the world’s
biggest search-engine company to assist with the management
change.
“I’m at a point in my life where I no longer have to make
such tough choices anymore,” Pichette wrote. “I wish to
transition over the coming months but only after we have found a
new Googley CFO and help him/her through an orderly transition,
which will take some time.”
Porat was a technology banker during the Internet stock
boom of the late 1990s and worked closely with Morgan Stanley’s
star analyst, Mary Meeker. Porat later advised financial
companies, which gave her a key role in navigating the worst
financial crisis since the Great Depression.
Advisory Roles
Porat advised the U.S. Treasury Department on its Fannie
Mae and Freddie Mac rescue in September 2008. After spending a
weekend trying to save Lehman Brothers Holdings Inc., she was
asked to help deal with the rescue of American International
Group Inc., Porat said in an interview five years later.
That AIG “could vanish that quickly and the impact that
could have throughout the country, and that nobody could see it
coming, was just staggering,” Porat said in the 2013 interview.
When Morgan Stanley was threatened, the firm survived by
borrowing $107.3 billion from the Federal Reserve in a single
day, selling a 20 percent stake and becoming a bank holding
company.
That experience shaped her time as Morgan Stanley’s CFO, as
she worked to stabilize the firm’s funding and convince
creditors it was safer than before the crisis. In the interview,
Porat said Morgan Stanley had accumulated enough cash and easy-to-sell assets to survive a year of dysfunction.
Cash Hoard
“Over the many hundreds of hours we have spent working
together, she has won my great affection and highest esteem,”
Morgan Stanley Chief Executive Officer James Gorman wrote in the
memo. “I respect her decision that now is the right time to
make a change in her career.”
At Google, Porat will oversee a burgeoning cash hoard,
which increased to $67.5 billion in the fourth quarter, fueled
by the company’s dominance of the online advertising market. Net
income rose 41 percent to $4.76 billion.
Finance chiefs at cash-rich companies like Google have to
strike a delicate balance as they seek to put tens of billions
of dollars to work for shareholders in a market where regulators
view large acquisitions with scrutiny. Adding to the challenge:
Google holds a large portion of its cash overseas and would
incur a tax hit by bringing it back to the U.S.
California’s Allure
Porat’s move to Google also reflects the growing allure of
Silicon Valley for professionals who once viewed a Wall Street
investment-banking job as the pinnacle of success. More
graduates are flocking to hot startups and established
technology companies, while shunning financial-services firms
blamed by some for the credit crisis a half-decade ago.
Google CEO Larry Page has been stepping up spending,
investing in areas outside of the company’s main search-ad
business, from high-speed Internet service and driverless cars
to digital-payments systems and Web-linked glasses. Porat will
report to Page in her new job, the company said.
“We’re tremendously fortunate to have found such a
creative, experienced and operationally strong executive,”
Page, 41, said in the statement. “I look forward to learning
from Ruth as we continue to innovate.”
