Snap's New CFO and VP of Investor Relations Both Quit; CFO Clashed With CEO Spiegel

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January 16, 2019
Updated 1mo ago

By Alex Heath

Snap’s Chief Financial Officer and Vice President of Investor Relations have both left the company after less than a year.

Snap ($SNAP) announced that its newly hired CFO, Tim Stone, was quitting in a filing with the SEC on Tuesday. The company’s VP of Investor Relations, Kristin Southey, quietly departed in late November after less than four months on the job. A Snap spokesperson confirmed her departure, which hasn’t been previously reported.

The quick departures of the two executives, who were both responsible for communicating Snap’s finances to Wall Street analysts and investors, come as the company is still reeling from a disastrous app redesign and is under federal investigation in connection with a class action shareholder lawsuit.

The sudden departure of Stone, a former senior finance executive at Amazon who was heralded as a marquee hire by embattled Snap, was mainly due to clashes with CEO Spiegel, according to a person familiar with the situation. The two butted heads over the departure of Snap's top business executive and Chief Strategy Officer Imran Khan in the fall of 2018, the person said. Stone wanted to be promoted to the role. Instead, Spiegel decided to split the role into two parts and hired two outside executives.

Stone joined Snap from Amazon in May 2018 with a $20 million pay package, the vast majority of which he will likely forfeit upon leaving. Details of his clashes with Spiegel were first reported by The Financial Times.

In a memo sent to employees on Tuesday and obtained by Cheddar, Spiegel said that Stone’s departure was “not related to any disagreement with us on any matter relating to our accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise).”

In late November, Southey said in a note to Wall Street analysts who cover Snap that she was leaving for “personal reasons,” according to a memo seen by Cheddar. She couldn’t be immediately reached for comment.

Snap also disclosed on Tuesday that it plans to report earnings results that are "slightly favorable to the top end" of its previously issued guidance for the fourth quarter of 2018. But the hopeful earnings preview didn't stop Snap's stock from cratering roughly 8% in extended trading.

"We find it odd that head of IR and CFO both leave abruptly for no clear reason after short stints at Snap," BTIG analyst and close Snap-watcher Rich Greenfield told Cheddar.

'We view it as a material negative that Tim Stone announced his intention to resign less than a year into the role," RBC analyst Mark Mahaney wrote in a research note downgrading Snap's stock on Tuesday. "With his relatively sudden departure, our confidence in a fundamental turnaround has been lessened."

In an October 2018 internal memo, CEO Spiegel gave Snap the goal of reaching profitability in 2019. After Cheddar published the memo, CFO Stone told investors that "an internal stretch goal is not a forecast and it's not guidance."

Since going public in March 2017, Snap has lost its Chief Strategy Officer, VP of Product, SVP of Engineering, two Chief Financial Officers, General Counsel, three VPs of Hardware, Chief Security Officer, VP of Content, VP of Sales, VP of Marketing, VP of Communications, and HR chief.

You can read CEO Spiegel's full Tuesday memo to Snap employees below:

"Hi Team,

I wanted to let you know that Tim Stone, our CFO, has decided to leave Snap.

Tim has made a big impact in his short time on our team and > we are very grateful for all of his hard work. I know we have > all benefitted from his customer focus and the way he has > encouraged all of us to operate as owners.

Tim will remain at Snap to help with the transition, including through our Q4 and full year earnings call on February 5th.

Tim’s transition is not related to any disagreement with us on > any matter relating to our accounting, strategy, management, > operations, policies, regulatory matters, or practices (financial > or otherwise).

Please join me in wishing Tim all the best in his future endeavors!"

This story was updated on January 16 with more details about Stone's departure.