Coverage: Twitter names IPO banker to CFO post

The next chapter in Anthony Noto’s varied career will be as finance head at Twitter. The company announced Tuesday he would take on the CFO job after helping lead the company’s initial public offering.

The Wall Street Journal reported in a story by Anna Prior and Yoree Koh that Noto was slated to join a hedge fund, but is now stepping into his role at Twitter:

Anthony Noto will succeed Mike Gupta, who will take on the role of senior vice president of strategic investments at Twitter, a new group that will likely be responsible for outside investments the way Google Ventures operates at Google Inc.

Mr. Noto’s surprise appointment comes amid a management shuffle at Twitter as the eight-year-old company continues to adjust to life as a public company. Ali Rowghani, Twitter’s chief operating officer, abruptly stepped down from his role last month following a disagreement with CEO Dick Costolo. The San Francisco company also recently brought in a new vice president of product and replaced its head of engineering.

Mr. Noto left Goldman Sachs, where he served as its global co-head of Goldman’s technology, media and telecom group, last month. He was set to start a new job at hedge fund Coatue Management LLC this week. The New York money manager oversees $9 billion and counts pre-IPO startups among its investments.

A person familiar with the company’s thinking said Twitter was keen to bring Mr. Noto’s market expertise and deep connections to Wall Street in house. The 46-year-old is credited with winning the lead role in Twitter’s IPO ahead of Morgan Stanley, people familiar with the deal have said. The bank was praised for Twitter’s successful debut that avoided the missteps that tripped up Facebook Inc.’s IPO, led by Morgan Stanley.

Mike Isaac wrote for The New York Times that his salary isn’t huge compared with the typical banker pay:

At Twitter, Mr. Noto will earn an annual salary of $250,000, along with a one-time grant of 1.5 million restricted units of common stock, with an option to buy an additional 500,000 shares, according to the filing.

The shifting in the ranks come at a crucial time for Twitter, which has seen widespread criticism from investors and analysts for problems with attracting new users to the service. The company’s stock has lost nearly half its value since its record close of $73.31 on Dec. 26.

Thus far, Wall Street seems to have reacted positively to the major changes at the top of Twitter’s organization; Shares of Twitter have steadily risen since Mr. Rowghani’s departure last month, and were trading up more than 4 percent at $42.89 on the news Tuesday morning.

Bloomberg’s story by Reed Stevenson and Jing Cao detailed Noto’s career and also pointed out he was a regular user of the service:

A dot-com era Internet analyst, Noto has served as CFO before, at the National Football League. He was a star football player in college at the U.S. Military Academy at West Point, leading the team in tackles in 1990. Noto trained to be a member of the Army Rangers and spent time in the Middle East while serving as a signal officer in the Army’s infantry.

“I could not be more excited about joining the @Twitter team & helping them reach every person in the world,” Noto wrote on his Twitter account shortly after the appointment, which was disclosed in a filing today.

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One of the few investment bankers who tweet regularly, Noto rejoined Goldman Sachs from the NFL in 2010 and also helped to secure the IPO for Yelp Inc. (YELP) He was an analyst at Goldman Sachs from 1999 until 2008.

“He’s definitely a very solid hire for them,” said Benjamin Schachter, an analyst at Macquarie Securities USA Inc., who rates Twitter the equivalent of a sell. “As CFO, he’ll be likely the voice to Wall Street for the company, and he obviously understands very well what investors want to hear given his experience as an analyst.”

Noto joins a company known for its rocky internal dynamics. Costolo originally gave Rowghani control over Twitter’s products and services late last year but decided to remove the responsibility in April, precipitated by the hiring of Google Inc. maps executive Daniel Graf as vice president of consumer products, people familiar with the matter said at the time.

This year, Twitter’s head of consumer product and head of engineering both resigned amid pressure to expand the company’s business. In May, Twitter appointed a new head of engineering, Alexander Roetter, who was already at the company.

The Financial Times had a “five things you should know” about Noto by Arash Massoudi. This was the most interesting tidbit:

 He and two Goldman colleagues were known internally as the ‘three headed monster’

Mr Noto was one of three leaders of the TMT division at Goldman for the past few years, along with Ken Hitchner, now president of Asia-Pacific, and George Lee, now chief information officer for investment banking.

Turf battles were a feature of the TMT team for many years, according to people familiar with the matter. The most obvious tension was between Mr Lee, who worked in the San Francisco office, and Mr Noto, who was based in New York.

No matter how many heads he has, Noto brings a good breadth of experience to his new role. He’s already been the CFO of a large company (the NFL) and understands Twitter’s business after selling it to investors. I’m sure that the job was more interesting than working at a hedge fund since he seems to be forfeiting a bit of money to take it. His investment banking experience should also help him weather the constant management shakeups at Twitter – they’ll look familiar.