How Treasury Builds Credibility with Boards and Rating Agencies | Treasury Careers Podcast

Mike Richards, CEO, The Treasury Recruitment Company: I’m rejoin by Steven. Steve and I, we originally spoke way back in 2019 when he was the senior Vice President and Treasurer at Allergan. You’ll hear that show and then only catch up just recently with Steve. Now he’s the Vice President, Treasurer at Incyte. He’ll tell you a little bit more about them as a group pharmaceuticals, but have a listen to a couple of bits of gold.

Mike Richards: Steve,

Stephen Kaufhold, Vice President, Treasurer at Incyte: seven years ago, you never heard of ai, artificial intelligence and so forth. You didn’t have crypto. I think those are two big areas and what that may mean for treasury going forward, incorporating AI into processes and so forth. Those are two extremely important areas. The basic treasury stuff is still the blocking and tackling of what needs to get done on a daily basis.

Stephen Kaufhold: With evolving technology, you need to stay current, otherwise you end up being a dinosaur. What’s important is making sure that you’re always adding to your tool kit of skills and so forth, so that you’re always marketable out there in the marketplace.

Mike Richards: Welcome to this week’s Treasury Career Corner podcast, where I interview treasury professionals about their treasury careers. Each and every week, I’ll 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, let’s get on with the show.

Mike Richards: In this week’s show, I’m delight to be joined by Steven Kaufhold, the Senior VP and Treasurer Allergan. The Allergan, a global pharmaceutical company. Focus on developing branded pharmaceuticals, devices, biologics, surgical, and not all in the medical products world for patients around the world. Steven will actually explain that a little bit more later on the show.

Mike Richards: As always, we’re gonna leap straight in. You know, Steve, take me back if you like. How are you first ever discovered Treasury back at the beginning, and we’ll go through and then we’ll talk about your views on the future of treasury and everything else. Let’s perhaps go back to your degree days and how you discovered the wonderful world of treasury as it were, over to you.

Stephen Kaufhold: Thanks Mike, and first thanks for the invite to participate in this and I really look forward to the conversation regarding undergraduate school. I was a business undergraduate with a concentration in economics and finance and had a lot of accounting classes, advanced accounting, cost accounting, but I knew deep down I didn’t want to be an accountant.

Stephen Kaufhold: I really liked the finance aspect of it. I was kind of following the stock market and so forth. So I wanted to do something on that spectrum, whether it be in Wall Street or working for a corporation. So if you looked at my first resume out of undergraduate school. It would’ve said to get a job into treasury.

Stephen Kaufhold: Took me a few years, you know, I started out as a credit analyst, or actually I started working out in consumer finance for US Bank, which is no longer around, and then moved over to TNT Credit Corporation as it was known at that time as a credit analyst. There was a treasury job for a treasury analyst opening up.

Stephen Kaufhold: This was in January of 1988, and jumped at the opportunity, and I’ve been glad ever since.

Mike Richards: And then you sort of made some good early moves within treasury. Talk me through the development for you. You know, you said, well, it’s amazing, you know, I’ve not heard of many people. A lot of the time we say people accidentally discover treasury.

Mike Richards: You had this drive towards treasury, which is unusual in itself, but how did you then grow your treasury career? Did you then choose each of the roles saying, I wanna build out on this, or what happened?

Stephen Kaufhold: As we’ve thought about treasury back in those days, it was important for people to rotate through the various different treasury roles.

Stephen Kaufhold: So for example, in cash management, a lot of times when we hire people to treasury, that’s where they started. We kind of viewed that as. A good foundation, you know, cash management, bank accounts and understanding all that. And after that individual spent some time in there, then it was moving into one of the other roles within treasury, whether it was on the capital market side, which was really the debt execution, FX hedging, whether it was in securitization, we were as a leasing company, that was one of our financing tools.

Stephen Kaufhold: So we took the opportunity to rotate people through the various different disciplines within treasury. So really creating a well-rounded treasury professional. You know, they may not be an expert in everything, but again, they’re grounded in all those different functions.

Mike Richards: When we get later on the show, we’ll talk about technology in the future of treasury, and I’ve talked to people in previous shows about wire transfers and s fax machines and things.

Mike Richards: Obviously treasuries. Evolved over the time, but when you first started, when I first started recruiting in it, it was quite different at the beginning and it wasn’t something that you sort of, when you’re interviewing one of those cash guys, you weren’t saying right, which the systems have used or everything else, but how have you seen that sort of evolve since your early days?

Stephen Kaufhold: It’s a night and day difference. I remember there wasn’t really much in the way of bank systems back then. From a cash management perspective. You would be using whoever your lead bank’s system was to release wires. It was very primitive. A lot of times it was through phone calls to the bank. I remember on commercial paper when we were a big commercial paper issuance and those days trades would settle by runners running trade tickets back and forth.

Stephen Kaufhold: And today you kind of fast forward, everything now is done either through Bloomberg terminals, whether it’s trading fx, so you no longer getting FX traders on the phone. So it’s really leveraging technology today. It’s really a world difference from when I started.

Mike Richards: When you did start, so you made those moves.

Mike Richards: Was it a very planned progression? Did you think, you know, I’ve, now, I’ve been system manager, now I want to do the corporate financing. Now I’m gonna do global, but,

Stephen Kaufhold: and probably one of the things I regret was not taking an overseas role. Even though I had responsibility for international treasury, it was really all managed outta the US for example.

Stephen Kaufhold: Back in the nineties, we actually started an Australian commercial paper program, and we would trade that from the US So we had no people on the ground in Australia. We would be in the office Australian hours placing that paper. So as I. Progressed through my career and eventually became an assistant treasurer.

Stephen Kaufhold: Now you say, okay, Steve, what’s next? Do I wanna stay in treasury? Do I want to go into another finance role, whether it’s in business development, whether it’s in financial planning and analysis, or do I want to become a treasurer? At the time, the person who I reported to who was treasurer wasn’t much older than I was, and that individual was committed to the company.

Stephen Kaufhold: And again, for family reasons, it was working for them. So I really didn’t see them moving on. So then, you know, what do I do? Do I now just stay at at? And hopefully things work out within the company. And again, there’s no guarantee that. You know, if that person decided to move on, that I was gonna get the nod and that they weren’t going to bring somebody in from the outside.

Stephen Kaufhold: And that’s when I took the opportunity, when it rose of a much smaller company, that being Virgin Mobile, who was looking for a treasurer. They were building out their infrastructure because they were transitioning from a joint venture. To a public company and I said, Hey, here’s the opportunity to get the treasurer’s title.

Stephen Kaufhold: And secondly, here’s an opportunity to work on an IPO. And I think from a treasury perspective, that’s one of the things that, you know, a treasurer or a treasury professional would love to have on their resume is the opportunity to take a company public. And certainly, as you know, Mike, those opportunities are far and g between.

Mike Richards: And when you were sort of convincing them that you were the, that beauty parade of people. What did you do to enhance yourself? I was talking to a couple of candidates rather recently, and they were like, oh, what do you think of my resume? And I was like, it’s great. Really fills out, you know, ticks a lot, boxes.

Mike Richards: However, this client, these are their pain points. You need to highlight this or bring this out, you know, so people often say to me, oh, what’s my resume like and stuff. So look, it’s a great building block, but this is gonna be their issues. Now, as you said, you’ve not been through an IPO before, but they were like, right, we are gonna IPO.

Mike Richards: It’s great. Attractive to you. But what was Sure, you convinced to them what was saying? Oh. But why are you the best person then?

Stephen Kaufhold: I think, you know, when you looked at going from CIT group, we could talk about the various acquisitions. What led from at and t Credit to be the CIT group. Virgin Mobile was a much smaller company, 425 people.

Stephen Kaufhold: So it was very important that the people that were being brought on demonstrated some skills. One, they were very well-rounded. So as I view it from a treasury perspective, having spent time on cash management. In the capital markets international. So it kind of gave me that broad base treasury background.

Stephen Kaufhold: Okay. So that was the skill sets that I brought to the table. And what was also important too is from a personality perspective and also demonstrating that you’re a team player and it’s more of an entrepreneurial type of spirit. They were looking for at that point. And it’s really, again, drilling down on teamwork and being not afraid to roll up sleeves and help out wherever you can, but to move the ball forward.

Stephen Kaufhold: So I think it’s a combination of the skillset, even though I didn’t have the IPO, I had the capital markets experience, and then also the teamwork aspect.

Mike Richards: Talking about team, so probably a bigger team that you were leaving. Was it just yourself when you first started there, or how was it structured?

Stephen Kaufhold: When I moved on from the CIT, probably at the time we had about 40 people within treasury.

Stephen Kaufhold: The biggest, let’s say 20 of that, or a little over 20 of that would’ve been on the securitization side, whether it was on the execution or. The reporting that goes along with securitization that had to be done on the monthly basis. So the monthly securitized reports. When I went to Virgin Mobile, we were.

Stephen Kaufhold: A total of two people, myself and then one other person. Oh wow. Okay. So it’s a big night and day difference. But again, you know, for me that carrot was the treasurer’s job. And then also picking up that new skill of, you know, the IPO and certainly, you know, he kind of fast forward today to Allergan. When you look at the treasury organization here, including my admin, we are a total of eight people.

Stephen Kaufhold: Right. So I think. You know, people say the benchmark is about one treasury person per billion of revenue, and our revenue is a little over, you know, 12 and a half billion today. So it’s, it’s been a very lean operation.

Mike Richards: Just going back. So you, you dropped from that 40 to two and it was like, right. And again, we’ll have listeners to the show who were in that situation.

Mike Richards: How did you cope? How did you manage, what were your, you know, you’re blocking and tackling, but how are you doing it? What, what are your. Key things that you’re trying to make sure where you don’t drop the ball when you move into that. I know you love your priority list. How do you drive the treasury forward towards that?

Mike Richards: IPO?

Stephen Kaufhold: Yeah, I mean, it was a lot of long hours exploring taking the company public as well as through a sale, through a private sale. So, you know, the challenge was two different banks leading both processes. So as you’re working on the S one filing and getting that filed, the other banks chomping at the bid to you.

Stephen Kaufhold: Get on your calendar to get the pitch books together, get the information together for the private sale. When you get the initial S one filed, and you usually have about 30 to 60 days, you’re waiting for SEC comments, that’s usually a time to decompress. Unfortunately, the day we got the S one filed the next day, boom, now we’re dealing with the other bank on the private sale, being able to multitask and if you’re doing a job that you love doing, I really don’t look as treasury as a job, and it’s something I enjoy doing.

Stephen Kaufhold: You don’t mind taking on those additional hours and whether it’s working in the office or working at home at night just to get the job done.

Mike Richards: Went through the IPO, as you say, immediately thrown into the deep end, but how did then the role evolve and would you contrast the sort of private to the PLC environment and the demands on you as a T?

Stephen Kaufhold: So if I follow you correctly, joined from the Virgin Mobile, which was a private company, which was an interesting prospect because you have two masters. You have both JV partners, and this was a joint venture between Sprint and the Virgin Group out of the uk. So they both have their own. Priorities and so forth.

Stephen Kaufhold: So it’s really kind of managing their expectations and their deliverables. And then certainly going to Allergan. When I joined the company, it was known as Watson Pharmaceuticals, which was a Corona, California based US generic company. When Virgin Mobile was sold, sprint decided to purchase us. My manager of I then moved to Watson and I said to her, where are you going?

Stephen Kaufhold: I’ve never heard of the company. They’re in New Jersey. I made the transition then because they were looking to put in place the infrastructure, believe it or not. But this was a company with about 2 billion of revenues. You had the person who was a CFO. He was a controller. He was the head of tax, he was the head of business planning.

Stephen Kaufhold: Treasury was really a part-time job between himself and the head of fp and a. However, with the new CEO they bought on several years earlier, he wanted to really take the company to be international. And to do that, you need to have the infrastructure in place. You needed to have a patroller, you needed to have a treasurer.

Stephen Kaufhold: He needed to have a head of tax and so forth, and that was my door that I was able to come through. Thankfully, you hear a lot about pharmaceutical companies that they like to hire within the industry, but at least with Watson, they were open-minded to individuals from outside of the pharma industry.

Mike Richards: And you walked in the door, it’s, well, you’ve just described, it was, at least it was a blank sheet of paper.

Mike Richards: You could make it up as you went along.

Stephen Kaufhold: It was, and then, you know, this was back in 2010, and then we did our first large acquisition, which was in 2012. We actually closed it during hurricane. I believe it was Hurricane Sandy on November 1st, 2010. You know, that was an acquisition that probably in fruition took about a year or so as we worked through due diligence, doing the analysis and so forth.

Stephen Kaufhold: And at the time, you know, as I mentioned, this was a Corona, California based team. I was in New Jersey, the rest of my treasury team, you know, which was about four people. Were in Corona, California. I didn’t see them for 12 months, so it was very important to have some really good people. I did inherit a very good treasury team because I didn’t see ’em for 12 months as I was working on that acquisition.

Stephen Kaufhold: And then if you asked me at that time, I would’ve said, Hey, it would’ve been another two years for the next acquisition, but I would’ve been wrong because it was almost every year. We are acquiring somebody, whether it was in 13, it was Warner Chicot 14, it was Forest 15, it was Allergan. We changed our name to Allergan at that point.

Stephen Kaufhold: And then I thought at that point, because the Allergan acquisition was 72 billion, okay, we would be done. Lo and behold, we announced then we were selling our generic business to Teva for 40 billion, and potentially we were gonna merge the rest of the business with Visor. Had three things going on at one time.

Stephen Kaufhold: The integration of Allergan. The divestiture of the generic business and potentially the merger of the rest of the business with Pfizer. So let alone each one of those is a major transaction, but we had three of them going on at the same time.

Mike Richards: Talk us through the people aspects of that. So the people transition, you said you were East Coast, your other four guys were over in Corona and you were managing no cross there, but how has it transitioned and what have you been like as a.

Mike Richards: Manager, director of those people. Sure. The experience of doing it remotely, even though it’s, you know, one coast of the US the other, at least you’re nearly in the same time, you know, only three or four hours. Sure. Time wise,

Stephen Kaufhold: I was on the East coast because there was a new CEO. She lived on the East coast and of course headquarters is wherever the CEO is.

Stephen Kaufhold: So East Coast was the administrative headquarters. A lot of our finance function was still on the west coast. However, after that activist acquisition in 2010. The decision was to migrate the headquarters to the East Coast. Unfortunately, I did lose some good people. I was able to retain one and I still have her today.

Stephen Kaufhold: She’s been with the company for over 25 years. And does the work of 10 people it would then hiring you here on, in

Mike Richards: that case, I hope she’s listing you paying her 10 times as much. I mean,

yes,

Mike Richards: obviously, yes.

Stephen Kaufhold: I’ll even give her a shout out, Debbie Wong to. She is a phenomenal employee and a lot of the success of this company is due to her and the other individuals of the treasury team.

Mike Richards: What’s the key to her success? Why is she so successful?

Stephen Kaufhold: Well, I think she’s another person who. Loves treasury. Mm-hmm. And loves the work that we do. And I think, you know, when you look at treasury, treasury really has a current row seat to a lot that goes on within the business, whether it’s on the business development side, working on due diligence, working on integration.

Stephen Kaufhold: So it’s a good place to be at the core of the company. So I think that what drives a lot of people who like treasury, I think. You know, viewing treasury from outside, even business units or even other groups within finance, you know, who may be adjacent to where the treasury group sit is they view treasury as a black box.

Stephen Kaufhold: They’re not sure what exactly goes on within a treasury. What kind of puts the onus on us to you take the opportunities as other groups say, Hey, can you come into my team meeting? Spend 15, 20 minutes talk about treasury. What do you guys actually do? How can we help you? And again, this gives us the opportunity to present to them, educate them.

Stephen Kaufhold: And so, as I said, 15, 20 minutes, usually these conversations turn to be 40 minutes, 15 minutes, we run outta time and people walk away with a different impression of treasury. And we look to partner with these business units to move the ball forward. I’ve

Mike Richards: spoken recently to severing from European Treasurer over at Honeywell.

Mike Richards: One of she does a very similar thing and in a way she also takes it out to the masses in a little way. She sort of lectures at local university or engaged with the guys there to sort of educate those guys and then gets her junior employees a lot of the time from there. I’ve told her to stop doing that ’cause we are a treasury recruitment company.

Mike Richards: We do need the employees, so we’ve tried to stop that. Put a lid on that. But then again, one of the other things, just like yourself, she’s then also by involving so many other people, like the finance analysts and things, whenever one of her vacancy comes up, she doesn’t even have to go onto LinkedIn, she just puts on the internal job board and they’ve got people knocking out the door, oh, can I apply?

Mike Richards: Do you find that as well yourself?

Stephen Kaufhold: I have not lost anybody from a treasury perspective. Debbie, who’s on the West coast, has been with the company for 27 years. The rest, two of my treasury folks have been with me since 2010 as I hired them, as I mentioned earlier, as we moved to. Treasury and the finance functions from the west coast to the east coast, you know, so I, I haven’t had really to experience replacing people and having to go out and hire people to replace people who have left.

Stephen Kaufhold: I did hire several years ago, a treasury analyst. That was a person straight outta college, no treasury experience, dual major, both economics and psychology. And again, this was an opportunity to bring in a very junior person, put ’em through the same paces as I mentioned earlier, you know, starting out in cash management.

Stephen Kaufhold: Taking advantage of opportunities, whether it’s now fx. So this person is actually doing the FX trading for us on Bloomberg. Also getting involved in systems since it’s been relatively quiet on the acquisition front and integration, which. You can imagine there’s always just a constant state of change as you’re integrating businesses and so forth, bringing on treasury technology.

Stephen Kaufhold: So for example, you know, a year, year and a half ago, we brought on quantum and we’re implementing that. So this individual now is working on that as well. And as you think about it, in about three years timeframe, coming in with no treasury experience. Very good understanding of cash management, actually is D leading up our F bar, which is the foreign bank accounting reporting that we need to do here in the us.

Stephen Kaufhold: You know, he’s working with our outside consultants In doing those reports, he’s now doing FX trading on Bloomberg and also on the technology side, the PON implementation. So it’s really, you know, instead of trying to micromanage folks is really empowering people and letting them run with the ball. And, you know, again, I think that’s what makes it interesting for, for the folks as well, because always in a constant state of learning, always learning something new.

Mike Richards: And when you say learning, so well just, you’ve got the system side, you’ve got the sort of. Development for them? Where are you team developed? Is it just that they’re sort of taking on more responsibility, different areas, or how’s it been evolving sort of thing?

Stephen Kaufhold: It hasn’t been dull around here in that, you know, when we sold the te, you know, the generic business to Teva and, and you know, we got into approximately $40 billion of proceeds for that.

Stephen Kaufhold: So. Up until that point in time, and I think, you know, this is going back to my leasing company days and the CEO pounding on the table saying, you know, cash is an inefficient asset. We were managing the company with about $500 million of cash globally. Now you wake up and the next day you come in and now you got $28 billion of cash.

Stephen Kaufhold: Most companies grow into that cash over time, so you’re able to, you know, put in policies, put in procedures, and build out an infrastructure to manage that amount of cash. It was really for us, a clip of the switch, you know, 500,000,001 day, 28 billion the next day, and now. You know, you wanna get that cash invested, maximize the yield.

Stephen Kaufhold: Again, certainly not risking the principle. So again, that was a whole new opportunity for folks to learn and a whole new part of the business. So it’s always been something fresh. And then thinking about capital allocation. Are we gonna declare a dividend? Are we going to do stock repurchases? Managing that.

Stephen Kaufhold: And then we also had a position in Teva shares. Once the lockup expired, having to liquidate those shares. So it really wasn’t, alright, here’s the same treasury functions that we’re doing day in, day out the last nine years. But as this company continued to evolve, it’s new areas, whether it, like I said, managing large cash balances, stock repurchases, selling stock.

Stephen Kaufhold: Dividends and so forth,

Mike Richards: and looking at that evolution of the team as well. We’ve touched on, you’ve got a new system coming in there, you’ve got all these new things. Where do you see the evolution for treasury? Everyone’s going on about all the latest companies are AI and robotic learning and everything else, but is that the core of things that automate as much as you can get, get rid of the labor?

Mike Richards: Stop. And this,

Stephen Kaufhold: I think you’re absolutely right, Mike. I think that’s where it’s heading in the use of robotics ai. I think, you know, treasury is gonna become more digitized as we get into the digital world and so forth, and it’s really looking at those type of functions or areas. Really to automate as much as you can, especially the low hanging fruit and the non-value added aspects of treasury, consolidating bank statements and so forth, which then gives the ability for treasury to really focus on the value add.

Stephen Kaufhold: And at the end of the day, I believe the only way treasury is successful or how to, how to judge a treasury team is, is the group. Adding value to the business.

Mike Richards: Just take it back a stage and looking at, you say, new Virgin Mobile, as we talked about is you and one other. And there’ll be people listening today that there’s their, you know, there’s them and one other.

Mike Richards: And then, you know, we’ve talked and a lot of these shows about, you know, bringing some technology and do all this. And the guys like you, they’re all, all, you know, as you were back in. You know, 10 years ago, it’s just them. They go, hang on. I don’t want to add another two or three hours to my day to get this technology implemented.

Mike Richards: Or, and you talk about the low hanging pro. How do those guys do it? You know, what, what sort of advice would you give to them?

Stephen Kaufhold: Certainly undertaking any type of system implementation. It’s very hard for a treasury group to do it by itself.

Mike Richards: Hmm.

Stephen Kaufhold: It has to be sponsored. By the executive management, the CFO in particular of the company.

Stephen Kaufhold: You need to have it support, and especially in this day and age with internal control socks and so forth. You need the accountants, you need the tax folks, you need the Sarbanes Oxley folks. You need the internal auditors. You need the external auditors. So I wouldn’t recommend. A treasury group saying, Hey, we’re gonna go and implement now a new treasury system.

Stephen Kaufhold: You’re not gonna be able to do it by yourself. You need to have the buy-in of all the various disciplines within the company, and that’s the only way you’re gonna be successful. And we had that support here within treasury, so right from the CFO. As we prioritized what we’re gonna do from a technology perspective within the finance organization, the treasury system was one of two systems that had that sponsorship, and that’s critical because I’ve also been part of system implementations in prior careers, which never got out of the starting gate because again, the support wasn’t there.

Mike Richards: Yeah, you need everyone. Pointed that right direction and everything else.

Stephen Kaufhold: Yeah, and I think, you know, from an individual perspective too, as you start implementing these systems and you’re seeing, hey, wow, this is pretty cool, this is making my job more efficient and so forth, you see the benefits of that.

Stephen Kaufhold: So you don’t mind putting in the sweat equity

Mike Richards: and just looking to the future less about the stuff that you’re looking at now, you know, the AI and all that. In the US there are different challenges, you know, political and economic and everything else. But what are you looking at as a treasury? You’re thinking, right, these are the things on the horizon.

Mike Richards: Lot of the time, the CFOs probably pushing you forward, and we’ve heard that a lot from Treasury. Is that. You are the front man. You’re like right off you go, Steve, look at all this stuff. You know, what are they saying to you?

Stephen Kaufhold: Yeah. I mean, from a, a treasury perspective, the conversations I’ve had with the CFO here, it’s really about capital allocation is extremely important, and how are we deploying our cash?

Stephen Kaufhold: How are we investing in the business if we are divesting of an asset? Well then, let’s say it’s an accretive asset from an EBITDA perspective, taking a look at, okay, what are we gonna do with that proceeds? Is it going to be invested back into a business development opportunity? Are we gonna buy in stock from a dilution to managed dilution?

Stephen Kaufhold: Do we wanna pay down debt? One of the focuses for us is because of all the acquisitions that we’ve done over the years, have taken on our debt balances, have very dramatically leverage went up, you know, close to at 1.4 times, which was a little bit above what our ratings would dictate. So it was very important for us as we thought about.

Stephen Kaufhold: How we redeployed the capital really be leveraging the balance sheet to address stakeholder concerns, whether it was debt holders, equity holders, or the various rating agencies. Again, that’s where the focus has been for us, is really on the capital allocation.

Mike Richards: As we come towards the end of today’s show, we’ll put the LinkedIn profile for yourself into the show notes, so people wanna connect with you if you want them, but you look back over it and you know, I think a lot of people will look at your profile and see, wow, that’s a, you know.

Mike Richards: Great progression. We really got into some of the nuts and bolts there, but. What advice are you gonna give to the analysts, the managers, you know, maybe even some of your peers? What nuggets of advice would you give to people as we wrap up today’s show? What would you say?

Stephen Kaufhold: Sure. I mean, when I started in treasury, starting in January of 1988,

Mike Richards: there you go.

Stephen Kaufhold: Back in those days, a lot of times from a career perspective, it was cradle the grave with one company that has changed dramatically. And we didn’t talk about all the different ownership changes that we went through, and it almost seems like. Five years in one job is a lifetime, unfortunately. I think at the end of the day, we all become contractors at the end of the day, and it’s important that, as.

Stephen Kaufhold: Individuals progress from a career perspective. They’re really thinking about fulfilling or filling out that resume, taking advantage of opportunities within the company. When somebody comes to you and say, Steve, we want you to spend some time in cash management, and some people may think that cash management is not the exciting part of treasury, because I think if you give people most choices.

Stephen Kaufhold: They want to be on the capital market side, dealing with the banks and so forth. I think they would be doing a disservice if they’re not taking advantage of those opportunities and really kind of having that solid foundation from a treasury perspective. And then sometimes, in my case, I had to make the jump from the CIT group to Virgin Mobile to get that treasurer’s title, to get the experience of taking the company public, which.

Stephen Kaufhold: I would not have had within CIT group that, you know, sometimes you may need to take a look outside the company. Take that risk, take that leap of faith, knowing at the end of the day that you’re gonna be better off at the other end, no matter how that opportunity to turn out. Because now you’re adding new skillsets to your career development.

Stephen Kaufhold: And again, that’s just gonna make you more valuable as you progress and pursue other opportunities.

Mike Richards: So a portfolio of skills is what you’re

Stephen Kaufhold: Exactly.

Mike Richards: Yeah.

Stephen Kaufhold: Even though I had international experience, if you’re starting out and there’s an opportunity to take an international assignment for a year or two and you have that flexibility, that’s something that everybody should take advantage of.

Mike Richards: Well, thank you sir. Great advice as always. Hope you enjoyed today’s show. I definitely enjoyed it. It was great fun, and we’ll keep talking to Steve in the future as his career continues to grow. But thanks for your time today and look forward to. Seeing you soon over in the us.

Stephen Kaufhold: Thanks, Mike.

Mike Richards: So welcome back to this week’s Treasury Career Corner podcasts.

Mike Richards: You have just heard me speaking to Steve. Well, he was one of my early guests, episode 74 back in 2019. He rejoins me now beginning of 2026. Steve, if you would, you are the Vice President Treasurer Insight. When we last spoke, you were SVP Treasurer, elegant, if that’s the right way. You were at the heart of things, largest capital markets transactions going on at pharma.

Mike Richards: What was it like? Bring us up to date from there on when I handed the bat onto you. You were nice and busy then, but over to you, sir.

Stephen Kaufhold: Hey, Mike, it’s great to be with you again

Mike Richards: and you

Stephen Kaufhold: and I can’t believe it’s podcast 74 and here we are today, and when we last spoke in 2019. I would say it was kind of a little bit of a quiet period.

Stephen Kaufhold: I mean, when you look at the history of Allergan, and especially my career going from Watson Pharmaceuticals and starting in 2012, and it seemed like every year we were doing a new acquisition. At the end of the day, we went from a US generic company to an international brand business. So it seemed like a new transaction every year.

Stephen Kaufhold: And so in 2019 it was kind of a little bit of a quiet period, and so I was able to focus more on my team. From a career development perspective, making sure, understanding what they needed for their next roles, whether it was a senior manager director, in one case being qualified to be a treasurer of another company and so forth.

Stephen Kaufhold: And so that was my primary focus in 20 19, 20 18. I think right around that time, probably right after we spoke, or maybe right before. We did do a Euro issuance, which was a leveraged neutral type transaction where we raised Euro. We took advantage of the low interest rates in Euro, paid off a like amount of US dollar debt, and those two transactions generated about 180 million a year in interest rates savings, and figure that over 10 years, that’s 1.8 billion US dollars.

Stephen Kaufhold: That’s meaningful. That’s money that then can be used for r and d and so forth. So 2019 focused on team and then it was announced that Allergan was going to be acquired by AbbVie and that transaction closed in May of 2020. Right during the COVID period of time.

Mike Richards: Yeah.

Stephen Kaufhold: Still felt, still had a little left in the gas tank.

Stephen Kaufhold: And you know, while I could have easily moved on and retired and so forth, a great opportunity came up that insight, and in a lot of ways the culture. Where the company is and its history kind of reminded me of my Watson Active and Stay and so forth. So I’m excited to be here at Insight.

Mike Richards: And who are insight, if you would, your NASDAQ quoted and things like that?

Mike Richards: It’s similar but very different. Or, you know, describe

Stephen Kaufhold: it’s a brand business. You know, it’s been around since 1995. It kind of traces its roots to DuPont. We have three main businesses, which is in hematology, oncology, and immunology. Our biggest product is Jakafi. Which generates a couple of billion dollars of revenues per year.

Stephen Kaufhold: We are gonna lose exclusivity in 2029. And so now it’s really about focusing on the pipeline and bringing our next products to market.

Mike Richards: Again, a period of transition for you. You had a big team before. We were just talking about before that

Stephen Kaufhold: Sure.

Mike Richards: Was it, you know, so you’ve gone from. Big team to, you know, bring us up to date with that as well.

Mike Richards: ’cause that’s a change for you.

Stephen Kaufhold: Yeah, Mike? I wouldn’t say it was a big team. I mean, when you look around to a lot of pharma companies and so forth, you know, I always hear the benchmark of one treasury person per billion of revenue. And I don’t know how true that is, or whether that’s been pressure tested or not.

Stephen Kaufhold: You know, at Allergan there was 13 of us, including my admin. And here at Insight, that’s currently myself, and I rely on some of the folks in accounting, whether it’s in the US or in Europe when it comes to the cash management side. Because again, you still need to have those necessary controls in place in releasing wires and so forth, and we require approvers.

Stephen Kaufhold: So you know, it takes a team to do that.

Mike Richards: And I know it’s thinking back a while, but what surprised you first when you got there? You got transition. Company and things, but any other things that surprise you? Again, for the listeners out there, if they’re making a similar move, what should they prepare themselves for?

Stephen Kaufhold: Yeah, I think when I made the move from Allergan to Insight, again, Allergan was big Pharma insight, market cap is about 20 billion. So I would classify this as more of a midsize farmer, and the company traces its roots to DuPont and. So it feels like we’re in that transition period of going from mid to a larger size pharma company, a much more complex business with multiple products versus just being a single product shop.

Stephen Kaufhold: So it just that transition, and I think that’s one of the skill sets that I bring to the table is coming from a larger pharma to a smaller size pharma.

Mike Richards: Your views on capital structure, how do you manage that or talk us through some of the stuff that’s been going on.

Stephen Kaufhold: Yeah, I mean when we look at, again, we’re very cash generative here at Insight, and you know, the focus is because our largest product is we’re gonna lose exclusivity in a few years.

Stephen Kaufhold: It’s really the focus of r and d. And that’s really our first call on capital is r and d. Second would be, you know, from a business development perspective, if it makes sense and it’s in one of our core competencies and so forth. Yeah. That’s where our primary call of capital is. We are currently debt free here at Insight and so.

Stephen Kaufhold: That’s where the focus is because of where the stock price was because of higher cash balances. A year, year and a half ago, we did do a stock repurchase through a Dutch auction where we purchased $2 billion worth of stock. I think in hindsight, it was a very good transaction. I think the price of the stock back then was about $65 a share, and today we’re up around a hundred dollars a share.

Mike Richards: And you sent me some very good notes. We were talking about your transition. One of the things you, your words, you know, it is been a career mark with transformation change, constant thing. Not all was by design, but you’re grateful for. Why are you so grateful for it? Some treasurers, they’re like, they want a steady ship and things that, but you are loving the changes and things just through that

Stephen Kaufhold: change is good, right?

Stephen Kaufhold: I mean, and we’ve got so ingrained to change that if there wasn’t a transaction, like we weren’t being acquired or we weren’t acquiring somebody. It felt like nobody loved us, you know, and nobody wanted us. So, and as you, you know, made mention, Mike, you know, again, I’ve been privileged to work in three different industries, financial services, wireless communications, and pharmaceuticals.

Stephen Kaufhold: Again, we were purchased by Numer Securities. We were then purchased by Nucor Credit. We were then purchased by C-I-T-C-I-T was purchased by Tyco, and that’s when Tyco blew up. There was the accounting scandal and so forth. Our debt costs went through the roof, and so we were the backbone to a lot of other captive finance and private label finance, and so we had to separate from them as quickly as possible.

Stephen Kaufhold: We took CIT public again, and at that point, that’s when you know the opportunity came up with Virgin. You’re going from a large financial services company that dates back to the early 19 hundreds. To a company that’s only been around for a couple of years, a joint venture, but the attractive part, hey, got me the treasurer’s title and also there was the opportunity to take the company public, which we did a list in the New York Stock Exchange, and then we got bought out.

Stephen Kaufhold: By Sprint. We wanted to then combine us with their other prepaid mobile offerings and so forth. And then I joined Watson Pharmaceuticals, and then in 2012 we started going on this acquisition. So by doing all these transactions, it’s getting all this exposure to the rating agencies working with the banks.

Stephen Kaufhold: As our debt portfolio grew, when I joined Watson, we had about $850 million of debt on the books. By the time we acquired Allergan, we probably topped at at about $45 billion. So now you have to start getting creative as. Your debt capacity starts shrinking. You got more debt on the books, making sure now you’re using all the tools out there, whether it’s term loans, whether it’s fixed bonds, whether it’s mandatory converge, straight equity issuances and so forth.

Stephen Kaufhold: I could have stayed there, but you know, taking a leap of faith, going to, you know, a company that was only around for a few years and knowing, Hey, I’m gonna pick up skills there that I’m not gonna get at CIT, so I’m kind of adding to my resume, which then. Allowed me to move to pharmaceuticals. I don’t think I would’ve been able to made the move from financial services to pharmaceuticals directly, especially if I was still at the CIT group and especially, you know, back in that time, you know, I think the belief was pharmaceuticals higher within their own industry and so forth.

Stephen Kaufhold: But, you know, I was fortunate enough that, you know, Watson took a chance on me and so forth. I was very fortunate enough to be in the right place at the right time.

Mike Richards: So you are an experienced treasury professional now that we can see this. How is that then your relationship, for instance, with your CFO and the board and the C-level, you know, compared to earlier roles?

Mike Richards: Yes. Do you find more comfortable with that? Are there any secrets for any people listening today? What do you do? What do you do different?

Stephen Kaufhold: How’s it changed Back in Allergan got a lot of face time with the board, especially around acquisitions. I would be the person who would then be presenting to the audit committee, to the board.

Stephen Kaufhold: Okay. We have this transaction and this is how we’re going to finance this transaction and laid that out To me personally, I think it’s very important that the treasurer is very involved in it. I’d rather be in the driver’s seat on that, which means that you have to be credible.

Mike Richards: Yeah.

Stephen Kaufhold: In front of the CFO, in front of the executive leadership team, in front of the board and so forth.

Stephen Kaufhold: So it’s very important. For me to always have my finger on the pulse of the capital markets. That if, for example, we had to finance a transaction, how we would do that. It’s interesting, the speed execution. I remember doing one of the first transactions at activists. It seemed like we worked on the transaction for almost a year before it was announced.

Stephen Kaufhold: Yeah. Now it seems like. Okay, we’re about able, you know, we work on a deal midweek, we’re looking to announce this Monday morning when the market opens and so forth. So it just seems time spans have compressed dramatically. So, you know, I’ve had instances previously where, hey, we’re gonna acquire this company.

Stephen Kaufhold: We gotta a board meeting on Saturday. We need to present how we’re gonna finance this. So it’s imperative that. As I was saying that I have my finger on the pulse of the market. I understand if I have a transaction, let’s say up to a quantum of a couple of billion, how we’re gonna finance that because I’m gonna then present to the board and say, this is how we’re going to finance it.

Stephen Kaufhold: The worst thing is. I go and present something, then I go and speak to our banking partners and they say, no, that was news six months ago. Things have changed. Now I gotta go back and say, Hey, forget what I told you. This is how we’re gonna do it. At that point, I lose credibility and that’s not a good thing.

Mike Richards: And you touching on that credibility for boards and things, you’ve got external boards and sitting on those boards as well. How has that influenced you, as you know, with treasury accountability or you just talked, touched on it a little bit there. Can you just take us to the next stage? So again, if someone is, you know, in their treasury seat and they say, Hey, come on, on board, you’re doing various bits, how has that influenced you?

Mike Richards: How has that changed you as a treasure?

Stephen Kaufhold: It makes me more aware, you know, personally and so forth. And I think relationships are important and. Building good communications and getting, I would recommend people, you know, if they’re at an AT level or another senior level within Treasury, and if there’s an opportunity for them to tab along with their treasurer or their CFO, you know, to attend an audit committee meeting or be part of a presentation to them.

Stephen Kaufhold: I think,

Mike Richards: oh yeah,

Stephen Kaufhold: I would certainly recommend that versus, okay, now I got a treasurer’s job and now I’m presenting to the audit committee or the board for the first time. And I also think, Mike, what’s important is, you know, when you mentioned credibility and you mentioned boards and things like that, it’s also credibility with the banks as well too.

Stephen Kaufhold: I mean, it is a partnership. The one thing is I always pride myself on is transparency with my banking partners that, you know, I’m good at my word and so forth when I said we’re gonna do something. And I think that’s imperative as well too.

Mike Richards: And you very kindly came to our Treasure Career Corner life and yes, we had one of our previous podcast guests predict to Bagchi from Zimmer.

Mike Richards: Yes. He was one of our onstage guests and he was brilliant. But also, yeah. He was crediting you as one, you know, his best ever boss, you know, and it was a big love in we we there we

Stephen Kaufhold: not because I was there. Okay. And that certainly took him by surprise. He wasn’t expecting me to be there ’cause I didn’t tell him ahead of time.

Mike Richards: But What made you his best boss? Or what? I know ’cause I was there in the room, but he was sort of crediting you with bringing him along to some of those meetings as well, you know, what’s your ethos there?

Stephen Kaufhold: I think Pradeep does a brilliant guy. I have so much respect for him when he joined. Allergan as my eight.

Stephen Kaufhold: The one thing, and I think he was thinking longer term, that eventually, and he worked for some very large multinational companies prior to joining Allergan, that he wanted to, thinking ahead five years, Hey, I want to be a treasurer of a company. I’ve done a lot of these things, but I’m still missing a couple of things.

Stephen Kaufhold: One was rating agency exposure and board exposure as well. So I remember, and we went to the rating agencies. It was a pretty large team. We kind of traveled in teams, even when we did the Euro due diligence for our bond offering over there, it wasn’t just me and him. You know, we had the CFO, we had the chief accounting officer, we had a couple of people from investor relations.

Stephen Kaufhold: So that enabled us part of the day to break up into groups and to cover more investors and so forth. So when we went to the rating agencies, you know, I presented. To the first two agencies. And when we went to the third one, you know, and since Perdido helped me put together the deck and so forth, I said, Perdido, why don’t you present this?

Stephen Kaufhold: Yeah. And you know, I’ll listen in and so forth. So again, getting him out to the agencies and then I remember him and me being in the city, and then we got a call from the CFO that there was a board meeting going on at the same time, and we had to be there as well. And I said, pita, why don’t you come with me as well too, and sit in on the board meeting.

Stephen Kaufhold: So you know, it’s. I think it’s important for the, the treasurer right to, to share the experiences, not to say, Hey, you know, I’m sorry you can’t come. And I think that kind of helped him to, to get where he is today.

Mike Richards: And just so you, we talk about getting there today, you and I last spoke, but we recorded it, you know, six, seven years ago.

Mike Richards: The world has changed a little bit when the things had moved on a little bit. What do you think treasury professionals should be thinking about now? You know, looking out to the world, it’s, it’s, you know, we’ve got all technology coming along. We’ve got lots of different, other challenges, but what are the things you think should be upper most in treasury professionals’ minds?

Stephen Kaufhold: This has been kind of crazy, right? Seven years ago you never heard of ai, artificial intelligence and so forth. You didn’t have crypto. I think those are two big areas and what that may mean. For treasury going forward, incorporating AI into processes and so forth. Those are two extremely important areas.

Stephen Kaufhold: The basic treasury stuff is still the blocking and tackling of what needs to get done on a daily basis. With evolving technology, you need to stay current, otherwise you end up being a dinosaur. What’s important is making sure that you’re always adding to your tool kit of skills and so forth, so that you’re always marketable out there in the marketplace.

Mike Richards: And how do you do that? What things are you seeing? What are you doing if you like, you talk about that toolkit, and I’ve talked about that with lots of treasurers that they’ve gotta keep adding. And I feel for you guys sometimes you’ve got like a full-time job. Yeah. And in addition, they expect you to keep developing everything else and sometimes coach and run a team, but what do you think?

Mike Richards: How do you do it?

Stephen Kaufhold: Yeah. And the third thing too is cybersecurity. Again, these are three big areas and it’s just a matter of keeping abreast of all the latest developments out there, cybersecurity, making sure that, Hey, what are the tools out there that treasury should be using, especially when it comes to cash management to protect the network of fraud detection and so forth.

Stephen Kaufhold: And so you just can’t rest on your laurels and think that your skillset that you have for tomorrow is gonna carry you forward. Again, you just need to stay abreast of what’s out there and. Is there something out there, whether, you know it comes to crypto or whatever. Is it? Is it, is it, is there any application within the business?

Mike Richards: And as we did last time, we’ll put your LinkedIn details. Yeah. And what are the takeaways from today? If you are, again, speaking across the range of treasury professionals, junior guys through senior, what do you think those guys should be thinking about or doing?

Stephen Kaufhold: Well, I think especially with all these different ownership changes that I went through and while each of ’em were good.

Stephen Kaufhold: It always seemed to be that the treasury team that I was associated with always ended up to be the treasury team of the combined company. So I think what’s very important is as an individual, making sure that you’re taking advantage of opportunities within treasury. I know sometimes, you know, people think, oh, the great area of treasury is the capital markets.

Stephen Kaufhold: I get to work with the banks. I get to do the execution and so forth. There’s other areas within treasury, there’s cash management. If you’re in a finance company, there may be securitization or other things that may not be as cool as, Hey, I get to hang out with the bankers and, and do a debt deal, and things like that.

Stephen Kaufhold: I think it’s very important to have a solid foundation, build on that foundation, add to your skillset. It just makes you more important within the organization and also builds on your skillset and that way that. Enables you to take advantage of opportunities. Now, sometimes you get comfortable being in a job, especially if you’ve been there for a number of years, that’s fine, but take a chance.

Stephen Kaufhold: I’m gonna take this opportunity. I’m gonna pursue this. This is what this opportunity’s going to get me incrementally that you may not currently have. And you know what? If it doesn’t work out in a couple years, well you know what you added to your skillset and that’s just gonna make you that much more marketable.

Stephen Kaufhold: For your next opportunity and so forth. And I think also what’s also important too is, and I tell this to people, it’s not bad as a treasury person to spend some time as a non-investment grade rated company. That’s CIT, at and T Capital. We were double a single, A rated and so forth at Virgin Mobile. We were non-investment grade and pretty low down on the totem pole there.

Stephen Kaufhold: You get to see things that you don’t see as an investment grade rated company. And I think it’s a great experience that treasury folks could operate in different investment grade rated entities just to see all aspects.

Mike Richards: Great. Final words. I’m gonna leave it there. Thank you very much, sir. You’ve been very kind and looking forward to seeing you once again.

Stephen Kaufhold: So the next time, I guess we’ll be at Podcast 800 when we next talk

Mike Richards: Podcast 800 or treasure curriculum live in the month, actually in New York. So when we’re recording this, we’ll do that at the beginning of Mars.

Stephen Kaufhold: We’ll see you then.

Mike Richards: Thank you, sir.

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