Deloitte Top 200: CFO of the Year - Steve Gray, Port of Tauranga

Steve Gray is not afraid of a challenge and it is that tenacity and staying power that has seen him recognised as the Massey Business School Chief Financial Officer of the Year in the 2017 Deloitte Top 200 awards.

Gray has been CFO at the Port of Tauranga for 10 years and with the company for 30 years.

He joined the firm in 1987 when it was under the Bay of Plenty Harbour board. After a few restructures he became the finance manager, then the IT manager left and he took on that role too.

In 2007 he was appointed chief financial officer. Gray says it was a great privilege to take on the role.

Since then the biggest challenge has been to continue to grow the company's total shareholder returns.

The company has averaged around 18 per cent per annum in the past 10 years and 19 per cent over the last five years.

Deloitte Top 200 judge Jonathan Mason said the market respected Gray and he was seen as a competent CFO who made prudent investments.

Mason said Gray was a "long-term performer" which was very important in the chief financial officer's role.

Gray has been integral to developing the port's strategy over the last 10 years and says it is great to now see the results coming to fruition.

"We had this five-year strategy to be big ship-capable."

The port spent $350 million to make this happen and it finally came to pass this year.

Gray says his biggest challenge to date has been the shipping contract he helped negotiate with Kotahi — the logistics company owned by Fonterra and Silver Fern Farms — for a 10 year lock-in.

"We were spending all this money — we needed an agreement with Fonterra that they weren't going to chop and change ports."

Gray led the team that negotiated with Kotahi in 2014. He says they kept chief executive Mark Cairns in reserve in case they needed to bring out the big guns. "We didn't use consultants. It took us six months. It had never been done before."

One of the sticking points was that Kotahi wanted shares in the company in exchange for the deal. The port was initially opposed this but it did happen.

Since doing that deal back in June 2014 Gray says the market cap of the Port of Tauranga has risen by $1 billion.

It was a major shake-up for the industry, which also required a delicate balance so that other customers were not upset by it, Gray says.

"It is by far the biggest deal I have done and will ever do."

But the deal means the port will have Fonterra's business for 10 years.

Kotahi will put cargo through Port of Tauranga's Timaru Container Terminal in return for 1.5 per cent equity stake in the port company and 49.9 per cent ownership of its Timaru terminal.

At the time, Port of Tauranga chief executive Mark Cairns said the volume the 10-year deal delivered to Port of Tauranga "was a $5b-$6b deal, to put some context around it".

He has been CFO for the same amount of time Cairns has been CEO and the pair have a great working relationship, something that was noted by the Deloitte Top 200 judges.

"Part of being a good CFO is being close to the CEO. I am a sounding board for Mark," he says.

Gray is 58 and says he has no plans to retire soon. He jokes that he wouldn't be welcome at home if he left soon.

"I don't think my wife would want me around home," he says.

He is also really proud of the capital return and share split which the company has gone through in recent years.

Gray said analysts had criticised the company for being too conservative with its balance sheet. He came up with the idea to pay back shareholders $40m over three years.

The board wanted it to be paid out all at once but Gray convinced them to spread it out and says "it went down really well with shareholders".

The company had been asked by a few different people about a share split because of a lack of liquidity.

It did a five-to-one share split in October 2016. Since then daily trading in the company had increased significantly.

"A couple of shareholders thanked me because now they can buy shares for their grandchildren."

Gray said though the share split didn't seem to make much sense at the outset, after looking at the downsides there didn't seem to be any reason not to.

Convincing the board was another thing.

But Gray says he likes those sort of challenges. "I like that. I like a challenge."

He says the port business has a great culture: "It's a great company and has great people."

He is not the only longstanding employee and says quite a few others have been there 25-plus years.

"I always say I have got Port of Tauranga running in my blood."

Finalist: Paul Chambers, Meridian Energy

Meridian Energy chief financial officer Paul Chambers has been instrumental in helping to list the company on the share market and its strategy since then.

Chambers joined Meridian in 2009 from Transfield Services New Zealand after a varied career covering ports, manufacturing and retail in both the United Kingdom and France.

He told the Herald in 2013 that he was attracted to the role at Meridian not only for the complexity of the power generation business, but also the emotional response consumers have to power.

"I think the role of CFOs generally in large organisations has shifted a lot so I think the expectation is the CFO will have much more involvement in the operational management of the business and also, depending on their particular inclination, in the strategic management of the business."

That's reflected in the diverse nature of his role at the company.

Chambers has responsibility for strategy co-ordination, performance measurement, external reporting, funding, risk management coordination, procurement and financial transaction services.

"I see it as being the role that holds the banner for the commercial aspects of every part of the business. Every decision that is made you have to have some finance involvement and I'm the person that leads that off."

Meridian Energy was listed on the NZX in October 2013 as part of the Government's share offer programme and the company has grown substantially since then.

Its was initially valued at $3.84 billion and now has a market capitalisation over $7.4 billion.

The judges said Meridian had also done well in growing its retail arm Powershop alongside its traditional generator business.

They said the company had made good capital market moves and had increased its commercial paper.

Finalist: Grant Ellis, Restaurant Brands

Restaurant Brands chief financial officer Grant Ellis is rated highly by the market and is seen as an integral part of the company's success story.

Ellis has been with Restaurant Brands since its sharemarket listing in 1997, helping it grow from a $200 million business into a company with revenues of $518 million.

Restaurant Brands operates the KFC, Pizza Hut, Starbucks Coffee and Carl's Jr franchises in New Zealand, KFC franchises in New South Wales, Australia and Taco Bell and Pizza Hut franchises in Hawaii.

Starting with the company at the time of its initial public offer, Ellis was given a challenging task right from the beginning.

He had to set up all the accounting systems from scratch, an entire department, establishing funding lines, and all other financial and administrative aspects of a public company's operation within a three month time frame.

Since then he has been actively involved in overseeing the financial aspects of the business including the acquisition and building of the Starbucks Coffee and Carl's Jr franchises, the acquisition and conversion of the Eagle Boys pizza chain, the entry (and exit) from the Australian Pizza Hut business, the resurgence of the KFC brand and the most recent major expansion into the Australian (KFC) and Hawaiian (Taco Bell and Pizza Hut) markets.

He has also been a critical part of negotiations with the company's franchisors in renewing the franchises the company holds.

Judge Jonathan Mason said Ellis was a "steady, well-regarded part of a success story."