Unleashing Your Curiosity in Treasury with Joe Meyer

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they build their careers, where they are now, where they see both themselves and the treasury profession going to next. And a special thanks to flywire, our fantastic sponsors. If you've ever wondered whether there was a way to ease your international transaction hassles, they're the guys to talk to. If you follow the link in our show notes, you can see me talking to my mate Greg Levin, their Senior VP of Sales. I get to ask Greg about who are Flywire and how they can help you and your treasury team with your cross border payment headaches. Just follow the link to the interview in today's show Notes. And now let's get on with the show. In this week's show, delighted to be joined by Joe Meyer, the partner and co founder at Claritas Financial llc. Claritas is an advisory firm that brings genuine experience working in and understanding the challenges to business owners and executives of tax, finance and Treasury. With decades of experience, they've helped steward and manage company's financial resources across industries across the world. And Joe will take us through that later on in the show. But what we're going to do is we're going to kick off by going back a couple of years now to how Joe first got started in finance, discovered the world of treasury and I'll shut up and let Joe get on with the talking. Joe, over to you sir.

Thank you Mike. The majority of my career was spent in treasury corporate finance, but I started out as a banker, specifically commercial real estate banking, and decided that banking just wasn't for me.

It wasn't? Why? What was it about that?

I personally didn't feel like I was bringing operational value to the job. So I left banking, then went to FMC Corporation managing their excess real estate portfolio and the cash manager of FMC Corporation left. So the assistant treasurer asked me to step into that role. That is certainly much more of a traditional corporate treasury position and I loved it. What I especially loved was the international aspect of it. FMC Corporation was at that time and probably still is very much of a multinational organization and being the cash manager was involved with cash management to a certain extent at that time with all of the foreign subsidiaries. In some cases the international subsidies would borrow directly with their local in country bank with FMC Corporation providing a parent.

Company guarantee until you got straight into fmc. I mean for those that don't know what FMC did or do, who Are they? What do they do?

At the time, FMC Corporation was a conglomerate of very disparate businesses. Chemical businesses, agricultural chemicals, industrial chemicals, machinery businesses, gold mining, defense equipment. FMC Corporation. Perhaps everybody has heard of the Bradley Fighting Vehicle. The Bradley Fighting Vehicle was created by FMC Corporation during my career with FMC Corporation. Then it began to divest of both subsidiaries and businesses that were less poor until the point when it was just two basic businesses, chemicals and machinery. And that's when we decided to split the company in two and spin off the machinery businesses into a company called FMC Technologies. And I went with FMC Technologies, and this was all in Chicago. FMC Corporation was headquartered in Chicago at the time of the spin of FMC Technologies, was also headquartered in Chicago. FMC Corporation relocated its corporate headquarters to Philadelphia because that's where the chemical businesses were headquartered. A big part of my job and tasks at that time was sourcing financing for the spinoff of FMC Technologies, but also helping FMC Corporation develop a corporate structure. They didn't have a corporate treasury department. Develop a corporate Treasury Department, hire corporate treasury professionals, et cetera.

Established corporation on the one hand, but obviously a blank sheet of paper on the other hand for Treasury. And I know it was a few years ago, but, you know, a lot of the same principles apply. How did you lay that out? How did you map it out? What, what was the. What was the structure then?

It ended up being two companies of, at that time, $2 billion of revenue each. Each company had all of the same needs for treasury, cash management, debt financing, insurance. It was finding people to step into those roles. And so I was helping the CFO and the corporate controller of FMC Corporation develop that structure and hire those people.

We're talking about the early 2000s and through to 2008, before you made your move treasury wise. What was it like for those that perhaps started in more recent years? What, what was treasury like?

It was like each function or each sub department within treasury was almost acting on its own. There was less cohesion on how the activity of cash management, debt financing may be affected by tax, which is not treasury, but may be affected by insurance, foreign exchange, especially for a multinational organization, the spinoff of FMC Technologies, that cohesion across the different functions within Treasury. We just needed to be more closely aligned at that time, especially cash management and foreign exchange. It was much more manually intensive then and how that was important for cash management because there was the settlement of the hedges that were required. Cash managers are settling their cash position Ideally then by 9:30am you never wanted the FX manager to come down and say, I've got to settle these hedges and I need $25 million to settle this group of hedges that I've netted after we've already set our position and issued commercial paper to fund that position. So it's especially important as junior people within any treasury organization to really understand what they do and how does it impact the other people within the organization.

And how do you measure that? I get asked sometimes when I'm recruiting, they say, or what technical tests do you recommend? Because a lot of stuff is now automated. Do you literally just do it as a quiz with people or how would you recommend people do it?

It's almost like a quiz, but it's really. Anytime you're interviewing with someone is really just chatting like we are here. Mike, I mentioned something and that raises your curiosity. Well, how do you manage that? And that's the same thing with really determining whether you're interviewing someone for a position, whether that person has the best interpersonal skills, frankly, to the job. Specific experience is nice and in some cases is especially important. But it's the interpersonal side. How do you work with a team? You know, I'm always checking for and evaluating people on their level of curiosity. Are they curious about what they do and how they do it? When did smartphones start coming out? I'd be in a meeting shortly after smartphones and something would be said in a meeting and I'd start Googling that because I was curious. I became known that within the organization people would make comments. Well, there's Joe Googling that again to make sure it's correct. I was always curious, is that correct? And more importantly, is there a better way to do it? Yeah, complacency within any organization and. But especially complacency within a department that manages the financial structure of the organization. Not the accounting structure, which is also very important, but debt finance, cash management. Are you paying attention to detail when you set up a wire transfer? You is the second person who is reviewing that and providing a second level of check and approval within the wire transfer system to ensure that all of those details are exactly correct. It's unacceptable to be approximately correct when you are transferring funds.

Yeah, yeah. Zero error.

There is, you know, if there is a mistake in an accounting entry, you can do a journal entry to correct that. And if you're up by a penny, it's not material, but it creates work for other people. Why is this wire transfer not matching the payable that we had? Why does the recipient Receive a penny less than what they're expecting. So they have to reconcile that. When I'm interviewing people positions within treasury to understand are you curious how is your attention to detail and do you find that important?

You were then the Director of Treasury Operations. You then made the step up and joined jpt. Can you explain who they were and what happened next with your career?

Well, JBT was another spinoff from FMC Technologies. So FMC Technologies being the spin off from FMC Corporation consisted of two sets of equipment businesses. One was oil field equipment and services. The other side of that business was food machinery and airport. And over that time, as FMC Technologies grew in revenue growing from $2 billion in revenue to roughly five and a half billion dollars in revenue by 2008, all of that revenue growth was in the oil field equipment business. The food machinery and the airport equipment business stayed constant level in revenue. But during that time it generated excess cash which was used to fund the growth for the oilfield equipment side. But JBT Corporation was spun off from FMC Technologies, maintained its headquarters in Chicago. And I moved to JBT Corporation as the treasurer. And JBT Corporation then being a smaller company than what FMC Technologies was, we consolidated some of the functions where we had separate people. Managing insurance, managing foreign exchange, managing cash management, managing the debt and capital markets. Being a billion dollar revenue company now multinational certainly continued to be multinational. We, we consolidated that activity. So as the treasurer, I was responsible for the entire Treasury Department leading that group and also providing training to the people that I had to bring into the organization from the outside. But I also asked the treasurer take on the full responsibility of managing the corporate insurance program. And JBT had a complicated set of insurance needs. And the most complicated part of that was the because of the airport equipment. Aviation insurance is very complicated. An assistant treasurer and manage the foreign exchange but also oversee all of the cash management responsibilities within Treasury. And he didn't have cash management experience. I had all of that. But I was providing him with guidance, discussions, training, etc. To help him develop that understanding and that skill set.

Is your hiring ethos to bring in people that fill in the gaps for yourself. Would you recommend that or do you think it's different to that or what do you say again, we've got people listening today go well, actually I don't have a strength in cash management. Should I, you know, should I train myself up or get stronger or should I just bring in the expertise? What would you. It sounds like you're saying in a plug and play sort of Thing in a good way.

It really depends. It feels like a cop out answer. Mike, every organization is very unique.

Yeah.

And what are your needs? For me, I got very little cash management training. I was placed in the job as the cash manager and the assistant treasurer said, here you go. So I learned cash management from my banks, asking them questions. We had a cash management, a cash structure, But I learned a lot from trial and error. Not on wire transfers, there was no trial and error on wire transfers. But on setting up a cash management structure and overseeing that and how important that is. And if I needed to, I could go to the assistant treasurer and ask questions.

But then when you were the treasurer at jbt, who could you go to?

Who could I go to? Google? You know, I also developed a lot of relationships with bankers, a lot of relationships with lawyers that I had worked with over the years and the insurance brokers. I was always calling them and asking them questions. They were willing to provide insight and answers or recommendations for other people to whom I could speak. That's what I think is especially important for treasury professionals, the junior people. As you're trying to understand how can you develop your career, take responsibility for your own development. It's nice if someone is looking after you to make sure that you are developing in a progressive way. But don't wait. Rely upon someone to tell you what to do or to give you guidance for what can I do and where can I go with this? The more proactive you are in your own career and a big part of your success is how do you bring value to the organization? Complacency is a death knell. A, it's boring, I hate being bored like, and B, complacency leads to mistakes. How can you look at your organization and where are there opportunities for you to bring real value? And it may not necessarily be what kind of value can I identify for the treasurer? Do you have opportunities to speak with the business units? If you don't, see if you can make those opportunities available for you to speak of the business units. Because the treasury organization, any corporate function really is in place to help the businesses run profitably and to build their profit and cash flow. And I was always focused on what can I, you know, who can I talk to out in the businesses? And a lot of times I would ask them, what are your challenges? How can I help?

You made a move yourself, physical location and everything else.

What happened next was I moved to Houston for an opportunity with an oil field services business called Tetra Technologies. That was thrust upon me, Mike, because JBT Corporation went through a restructuring of the company and there was much restructuring going on at the senior executive level. There was a new CEO and a new CFO brought on in late 2013. I enjoyed my career at JBT Corporation. I learned a lot, brought great value, but I was one of the number of people within the senior level that were restructured out of their position. I had been traveling to Houston significantly a lot prior to this, especially when I was at FMC Technologies. So I knew of opportunities in Houston and that's when I took the position with Tetra Technologies to move to Houston. Much different business than JBT Corporation. Less multinational, but it still had fair significance of a multinational organization. At that time I had a staff of more junior people and me as the treasurer. I did a lot of capital markets transactions. Being an oil field services company in 2015 through 2019, very challenging for all oil and gas companies, particularly oil field services companies, issuing new debt, issuing equity, restructuring that debt.

And as you say, when you're in that situation, you know, you've been in other companies where they're, perhaps they were welcoming you with open arms when it was a more challenging situation. What did you find was key there as a treasurer?

What was key there was especially to understand the businesses themselves and, and how are the businesses developing and how do the businesses make money. When you're spending time with your lenders and investment bankers on equity issuance, the lenders especially really want to understand how's the business going. The CFO doesn't always have time to speak with the bankers. As a treasurer being the primary mouthpiece with all the lenders, you know, it's important to, to explain to them what the business is, what's the outlook, where are the challenges. And in my opinion, a treasurer should be fairly open with truth and honesty of how your businesses are performing and what are the challenges are, what the challenges are and what the needs are. Because if you're not, that lender is going to remember and when you need help or you need a favor, because every company is going to need that, especially if you're running a troubled stretch, they're going to remember that, you know. So my experience with the bankers with whom I've worked during this period of time, they were more willing to stretch, you know, certainly within the guidelines of the federal bank regulations within the U.S. but they were more willing to stretch because they knew they could trust the people within the organization and then talk.

Us through from there to now sort of thing, walk us through if you like, the next moves and what happens.

In my next move was once again Mike thrust upon me in fourth quarter of 2019. The industry at the time for oilfield services firms, especially those that had exposure to the Permian Basin in West Texas, were struggling with revenue profitability. Many other people within the corporate function, not only at Tetra but across all of the oilfield services firms in Houston at the time were restructured out of their positions. That occurred in roughly fourth quarter of 2019. So I was trying to find another position within Houston. I moved my family to Houston. I had great connections but the response I got was very few people are hiring because everybody is restructuring out and they're all many people like me out there trying to find some. And then Covid hit in early 2012. Thankfully for me, the CFO of Technip FMC had contacted me asking for if I could help with some debt financing structuring needed done. You know, it's just a one off project. And I had worked with her previously at FMC Technologies as I'm looking at this domestic debt financing and I'm evaluating the financial statements, not only the public financials, but the internal financials of all the subsidiaries and identify for her opportunities where cash is located around the world. And mentioned to her that I see cash in these various jurisdictions. I think there's an opportunity here to consolidate that cash further. She connected me with another gentleman who was a consultant to the organization, who was a tax professional. And so I was working with him evaluating all of the opportunities for legal entity structure, intercompany dividends, intercompany loans and how can we do that from cash concentration, taking into consideration foreign currency withholding, taxes and positions of the subsidiaries. I had always known and worked closely with the head of techs at my previous companies, but it was even more so as I was this gentleman. Stewart and I were providing consulting services to Technip FMC and the CFO and Stuart and I to work together to evaluate this further. I guess it's coincidental, Mike, that I left treasury as an employed treasury professional and moving into consulting. And it stayed with that because I've been able to continue the opportunities with multinational companies on a project basis or consulting basis to help them improve their finance structure, tax structure, cash positioning and that's exciting for me. And as I had said before, complacency is a death knell for me personally. How boring it is being a consultant to different companies like this is not boring. Each one has similar challenges, but they're all unique. And so I've been doing the consulting now for almost four years.

If you reflect back over your career, obviously there's that very close knit relationship between yourself and tax. You know, you reflected when you're meeting maybe treasury junior treasury folks or mid level and they say, well look, you know, as you look back over what advice are you giving to those guys?

The advice, it really starts by, you know, asking questions, really understanding their position and asking questions. Have they, have they considered this? They have a client now. It's a publicly traded multinational organization, has more cash on its balance sheet outside of the US than what it would like. The CFO has contacted me, you know, knowing what my experience has been and success. Can we help them? This organization has a VP of Tax. That VP of Tax has more US experience and less international experience. They're looking to their external tax accounting firm for advice. Sometimes in those cases, those tax accounting firms, they understand the tax law very well in all of the jurisdictions, but they haven't worked at multinational organizations. So what's the practical side within any corporation to implement this or to understand it? That's why it's important for treasury professionals, treasurers and you know, corporate tax professionals to really understand what are your businesses within the organization doing, how do they perform, what's important to them? What can you do from a Treasury and a tax structure to help that business in Portugal, Angola, France, Norway, Malaysia, you name it. What kind of input can you provide to help them improve their profitability?

When you're in a Treasury team now, are we thinking that you need to go and be closer with your treasury, your tax guys and say, can we sit down over a coffee or is it just on a deal by deal basis or what are you thinking that.

Develop that relationship at the beginning? If you wait for it to occur on a deal by deal basis, then it's too late. There's an understanding with experience that comes by being proactive and developing that working relationship up front. Understanding what's the best way to fund Brazil from outside. Is your Brazilian subsidiary flush cash or short cash? If it's a significant subsidiary, there's probably going to be more than casual conversation going on within the Treasury Department, the cfo, the tax department, et cetera. You know, can we avoid making an intercompany loan to Brazil from one jurisdiction or another or entirely? Are there subsidiaries on intercompany transactions that have payables to Brazil, et cetera? There are so many opportunities to fund your international subsidiaries from either the parent or other subsidiaries. Yeah, the Netherlands, for example. If you have a, if you have a Dutch holding company or a Dutch cash pooling entity. I personally don't like to wait for a transaction to pop up before I start developing relationships within your organization. I do understand how for some people it may be a little difficult for them to reach out to develop that relationship.

How do they do it then?

For me, it wasn't hard. I was always curious. I always wanted to speak with other people. The advice that I'd given to the people that worked for me was just to reach out to this person. If they found it challenging to make a connection there, then I would facilitate that connection. Let's set up a conference call with the head of the business unit in Sweden for someone on my team for you know, when I was managing people, it was always important for me to help people within my team to develop their skill set careers. And so much of your career is not necessarily based upon your actual talent, but much of your career progression is really facilitated by how well you interact with people within your organization and outside of your organization. Are you approachable?

We'll put your LinkedIn details in the show notes. What takeaways are going to give people for today? You know, what are the if they're developing their treasury careers or you've had a rich career so far, what do you give them before they must. They're listening today.

Be curious. You know, try. Try to develop your curiosity and teach yourself or learn on your own. You can't rely upon other people to train you or to make sure that you are learning everything that you either need to or want to. You really have to take responsibility of your own development. And like I said, it's nice if you're the people within your organization or your manager is providing that direct oversight and direct guidance. But great success really comes to those people who are taking responsibility on their own actions.

Hello treasury professionals. Before you dive into the next episode, could you please help me continue to grow the world's only global treasury salary survey? That's right, our one. So you know your compensation is constantly benchmarked against the market. It's amazing, isn't it? Just go to treasurysalary.com takes less than two minutes to complete, start to finish. You then gain exclusive, regular, updated access to our salary survey, keeping you ahead of the curve. The survey is an evolving, breathing entity that constantly tracks the salaries of treasury professionals on a global basis. Currently, we have over 1100 participants taking part at treasury salary.