Snapchat has received a timely boost with respected Amazon executive Tim Stone agreeing to come on board.
The share price of Snapchat-owner Snap Inc has been in free-fall over the past year, down more than 50%, but finally the social media company has something to crow about.
Its current Chief Financial Officer (CFO) Drew Vollero will step down on May 15 to be replaced by Amazon.com’s vice president of finance Tim Stone.
Stone, 51, has been with Amazon since 1998, and prior to his appointment as VP of finance, was vice president of the retail giant’s physical stores.
Crucially for Snap, Stone has experience in digital content and cloud services. Snap is already struggling to cover its expenses with Google Cloud and Amazon’s Web Services Cloud (AWS), and its AWS costs are set to increase by $75 million a year until 2021.
Stone was also pivotal in the integration of Amazon’s $13.7 billion Whole Foods takeover last year.
Vollero joined Snap in 2015 as the company’s first CFO, and helped CEO Evan Spiegel and co-founder and CTO Robert Murphy take it public.
But Snapchat has been dealt blow after blow in the past 12 months, culminating in the loss of 24% of its share value since it missed investor expectations by more than $13 million in its quarterly earnings report last Tuesday.
Kylie Jenner tweeted she was no longer using Snapchat, Rihanna criticised the platform for making light of domestic violence, and most detrimentally, the product redesign it rolled out in February was an expensive flop.
It has allowed Facebook’s version of Snapchat — Whatsapp Status — to establish a segment leading position. It now has 450 million daily active users compared to Snapchat’s 191 million.
Summit Insights Group analyst, Jonathan Kees, told Reuters, Vollero is the scapegoat for Snap’s poor results.
“I think somebody had to take the blame for Snap’s missing numbers and there was likely frustration with both the CFO and management team,” he said.
In the regulatory filing to the SEC on Monday, Spiegel commended Vollero’s “contributions to the growth of Snap”.
“He has done an amazing job as Snap’s first CFO, building a strong team and helping to guide us through our transition to becoming a public company. The discipline that he has brought to our business will serve us well into the future. We wish Drew continued success and all the best,” he said in the statement.
Vollero expects the financial strategies he spearheaded to pay dividends going forward, and will stay on as an advisor for three months after next week.
“I am proud of all that the finance department has accomplished leading up to the IPO and work done to streamline the company,” Vollero said.
“The financial strategies we have in place are gaining traction to grow margins, flatten costs, and reduce cash burn, and we have a talented finance team that can execute well.”
According to the filing, Stone will earn an annual salary of $500,000, and restricted stock units with a value of $20 million.