Ruth Porat: From Wall Street to Silicon Valley
Google’s new chief financial officer leads a reorganization that aims to make the company more transparent to investors.
“Driven” doesn’t begin to describe Ruth Porat’s work ethic.
Google’s relentless chief financial officer has taken client calls while in labor, worked a full schedule during treatment for breast cancer, and once delivered a presentation lying on a boardroom table after her back suddenly gave out.
Porat, 58, joined Google nearly a year ago to take charge of the company’s restructuring as Alphabet, a holding company for Google and a variety of other experiments and ventures funded or acquired with the search engine’s revenues.
Moving to Silicon Valley from Wall Street, where she had been chief financial officer of Morgan Stanley for five years, Porat is credited with bringing new transparency, structure and cost discipline to the internet giant, which has a market capitalization of nearly $500 billion.
Listed as one of the world’s most powerful women
Forbes lists Porat as #32 of The World’s 100 Most Powerful Women. Her pay for the first three years with Google is $70 million, making her one of the highest paid financial executives in the industry.
Porat had a long career at Morgan Stanley. She first joined the company in 1987. After working for Smith Barney from 1993 to 1996, she returned to Morgan Stanley and served in a number of roles, including vice chairman of investment banking, co-head of technology investment banking, and global head of the financial institutions group. She became chief financial officer in 2010, one of the highest-ranking women on Wall Street.
She led the Morgan Stanley team that advised the U.S. Treasury Department on the takeover of Fannie Mae and Freddie Mac during the financial crisis in 2007-08. She led some of the largest funding and initial public offering rounds in the tech industry, including E-Bay, Priceline and Amazon.
Porat earned a bachelor’s degree at Stanford University, a master’s of business administration from the Wharton School at the University of Pennsylvania, and a master’s in economics from the London School of Economics.
Working in the delivery room
Known for her relentless drive, Porat made calls from the hospital delivery room in 1992 when she was giving birth to her first son.
Diagnosed with breast cancer in 2001, she moved back to the United States from abroad for treatment but kept a full work schedule of long hours. “Working meant I had control of my life,” she said.
Once, during a presentation, her back gave out and she was unable to stand or move. Rather than rescheduling, Porat lay down on the boardroom table and gave her full presentation.
New structure aims for more transparency
Porat brought her Wall Street sensibility to Google while overseeing the transition of Google into the new parent company, Alphabet.
Under the reorganization, Google co-founders Larry Page and Sergey Brin left Google to head Alphabet, as did Google chief executive officer Eric Schmidt. Sundar Pichai was named CEO of Google while Porat is CFO for both companies.
Google had come under pressure from shareholders as it used its search engine advertising profits to fund a variety of expensive and speculative ventures including development of self-driving cars, intelligent household devices, and medical research.
Speculative costs reported separately
Under Alphabet, the company will report revenue and earnings for Google, which accounts for most of the company’s profits, as one category. In a separate category, the company will report costs and revenue for its other ventures.
The new category, called “other bets,” will include the company’s experimental projects, life sciences businesses, and investments. The new reporting practice is designed to give investors a clearer picture of how much the company is investing in experimental projects and how much they are contributing to the bottom line.
Investors should be able to more clearly evaluate Google’s core business while enabling Alphabet to highlight other assets, according to Colin Gillis, a technology analyst at BGC Partners.
Porat said within the new structure the company remains open to large acquisitions as well as smaller bets. Incremental change in technology risks irrelevance, she said.
The change “gives us an opportunity to provide greater insight,” Porat said.