Dive Brief:
- Bill Holdings this week announced a management shuffle affecting product, technology and strategy roles as the business payments software company comes under pressure from activist investors to improve profits.
- Bill’s president and chief operating officer, John Rettig, will assume a new, expanded role as chief strategy and transformation officer, the company said in a Tuesday press release. San Jose, California-based Bill also plans to appoint a new chief revenue officer in the coming weeks.
- The software firm is at “a pivotal moment,” Bill founder and CEO René Lacerte said in the press release. Bill is becoming “an AI native company” and “evolving our leadership team and organizational structure to align with our highest priorities and position Bill for the future,” he said.
Dive Insight:
Bill also promoted two executives to new roles as part of the changes. Executive Vice President Michael Cieri, general manager of software solutions, will become chief product officer, a new role that will combine “software solutions, payments and financial services under unified leadership,” according to the release.
Eric Chan, a 20-year Bill veteran and an engineering fellow at the company, will become chief technology officer, replacing Ken Moss, who will depart. Chan previously had served as Bill’s first CTO, according to the press release.
“The profound shifts we are just starting to experience have the potential to drive great things for humanity if harnessed in the right way,” Moss wrote Tuesday on LinkedIn. “But change of this magnitude is rarely linear nor without risk.”
Moss said he’ll spend more time with family “and then be able to think and act more broadly about AI.”
Chief Customer Officer Sarah Acton will also exit the company, as will Mary Kay Bowman, who has been general manager of payments and financial services. Moss and Bowman will continue to work with Bill in “advisory roles,” according to the release.
Bill said the changes will become effective by the end of the current quarter.
Bill provides software services to small and midsize companies to help handle payment, invoicing, accounts receivable, spending and expense management and other functions. Some of Bill’s competitors include AvidXChange, Intuit, Ramp and Tipalti.
The management changes come three weeks after Bill announced a “hard decision” to shed 30% of its workforce, or about 600 people, by the end of next month as it embraces artificial intelligence across the company. AI heralds “a transformational impact for any software developer,” Lacerte said last week at JPMorgan’s Global Technology, Media, and Communications Conference.
Bill’s workforce restructuring “will give a lot more clarity on what it is that we’re going to be doing from a profitability perspective,” Lacerte said.
Ahead of the layoffs, Bill is offering a voluntary separation program for those who “may not feel aligned to these changes, along with our evolving strategy, culture and operating model,” Lacerte wrote in a May 7 blog post. The same day, Bill announced a share repurchase program of up to $1 billion.
Last year, Bill agreed to shuffle its board to add four new directors, including two proposed by activist hedge fund Starboard Value, which disclosed an 8.5% stake in Bill. Two other activist investment firms, Elliott Investment Management and Barington Capital Group, also acquired stakes in Bill last year.
Barington Capital, a New York-based hedge fund, has called for Bill to sell itself because it’s not valued sufficiently by the public market. Bill, which Lacerte founded 20 years ago, went public in late 2019.
Bill is focused on achieving the “Rule of 40” financial metric, Lacerte said, meaning a goal for the company’s revenue growth plus its profit margin to equal 40%, or greater. The metric is viewed as a way for technology companies to balance their investments for overall growth with the need to be profitable.
Beyond attracting new customers, Bill is also intent on spurring more spending from its existing client base, Lacerte said at the investor conference.
“We have this combination of software and payments, and I think for us part of the (market) expansion is just getting more penetration of our existing payment products,” he said. “There is no shortage of opportunities to drive growth in the business.”
