WHERE CAN THEY GO?

There's not much hard data available on turnover rates for corporate development officers, but based on anecdotal evidence from recruiters and practition­ers, the job market for experienced dealmakers is strong. Recruiters are doing more searches -- Heid says she did very few corporate development searches between 2000 and 2005 but has done more than a dozen in the last 18 months.

Some dealmakers are recruited for new jobs, while others seek out new opportunities because there's not much room for professional growth inside a small corporate development department. Either way, their experience in strategy and deal execution, together with their industry expertise, makes them attractive hires. "That's a valuable accumulation of skills that would allow one to be successful in other professions," says Burke St. John, vice chairman and head of the financial services practice at CTPartners in New York. "When you boil it down, it's a supply-and-demand issue driven by a few factors: the available population with the right skill set and where we are in the economic cycle. We're coming off a huge PE boom, followed by strategic buyers being more active. These are leading the demand for talent."

Much of that demand comes from middle-market companies looking to build in-house deal expertise. It's less likely, says St. John, that an investment bank would recruit from a corporate development group, partly because selling skills are so much more important in the banking world. PE firms, meanwhile, tend to be more interested in operational and finance specialists than in corporate dealmaking talent. After all, they already have plenty of dealmakers.

Because corporate development executives work so closely with the business units, a common exit from the field is to transition into an operational role. This can be a good thing both for the business unit and for corporate development, particularly if the corp dev function rotates in a promising operations executive. The more time dealmakers spend gaining experience in other areas of the company, says ­KPMG's Gottlieb, the higher the rate of deal success for that company. That's backed up by the firm's 2004 survey data. About 20% of the 221 corporate development groups studied had rotational programs in place. Most of those achieved 75% or more of their expected synergies, and deal success was 30% higher than in companies where corporate development executives never leave the department. The most successful programs, says Gottlieb, trade a corporate development executive for a business unit manager for a period of 18 months to two years. The same programs can also be used to attract top talent, which over time could lead to more young talent choosing corporate development as an entrée into the corporate world.

"It can be difficult for very old, sleepy companies to attract the best people from Harvard or Wharton into their businesses," Gottlieb says. "It's hard to compete with the banks and consultants. But M&A is sexy right now, and they can attract top talent into M&A, then rotate those people out into the company."

It's easy to see how experience in a different job can give a dealmaker (or a line executive) a deeper perspective. Take the case of Meredith's chief development officer, Zieser. After six years as a lawyer with Sullivan & Cromwell LLP, he joined the in-house legal department at First Data and then quickly transitioned into corporate development, where he spent three years. He then became group president for the company's $450 million, 1,000-employee merchant services business.

"When I became an operating group president myself, my attitude totally changed around deals because I had to manage a budget and all this deal was going to do was add to my incentive bonus and cause the risk of disruption if the deal didn't work out," says Zieser. "It's interesting looking back how much I changed from thinking, 'I'm bringing these deals that I think make sense, but these fellows won't sponsor them' to 'Now I'm one of those embedded managers, and I'm not sure I'm so open-minded either.' "

HOW MUCH DO THEY EARN?

Despite the recent strong demand for corporate development talent, headhunters and compensation consultants say they haven't seen a general surge in salaries. This may seem anomalous, but it's consistent with the other trends we've noted. With even large companies preferring smaller deal teams, job growth is coming more in the lower-paying middle-market world. Meanwhile, there's no way that the majority of corp dev leaders who report to CFOs are going to outearn those CFOs or get paid at a rate that upsets the broader corporate pay scale. "I believe that the constraint on salary increases is related to internal equity considerations rather than market dynamics," says Frederic W. Cook's Ryterband.

Returning to the figures from Mercer Human Resource Consulting, the mean base salary for a company's top M&A executive is around $230,000, based on the firm's 2006 "Finance, Accounting & Legal Compensation Survey," which collected data on more than 120,000 employees worldwide. Factor in bonus pay and long-term incentives, and the mean jumps to about $350,000. That squares with data from KPMG and Heidrick &å Struggles.

It's important to note, though, that just as a corp dev leader's responsibilities can vary considerably depending upon what company he or she works for, so can pay. "We've done corp dev searches for jobs with a $200,000 base and a million-dollar base," says Heidrick & Struggles' Heid. "The size of the company is always relevant, but there are other factors. Where are they in their growth strategy? What kind of competitive pressures are they under? If they need to make moves based on the competition and they need to do something fast, they're willing to pay somebody more because the amount of shareholder value this person can create if done correctly is enormous."

Genzyme Corp.'s executive vice president for legal and corporate development, Peter Wirth, who also serves as chief legal officer and secretary, comes down on the high end of the pay scale. His total compensation last year, according to the company's proxy statement, was nearly $3.2 million -- including base pay of $675,500 and bonus and long-term incentives of $2.51 million -- making him the second-highest-paid executive in the company behind CEO Henri A. Termeer.

Structuring a corp dev leader's compensation is no easy task. Various prickly questions emerge around bonus pay and long-term incentives -- especially as companies trend away from stock options now that they have to expense them. Linking pay to performance is tricky for any corporate staff position because those departments don't make or sell anything other than their services to operating units. It can, however, be particularly tough in corporate development, where executives may have little control over measurable long-term deal outcomes such as revenue or cost reductions.

Further complicating things is the difficulty of benchmarking the pay scales. "When you have a very defined position such as CFO, general counsel or human resources manager, it's easier to develop a set of compensation data," says Gregg Passin, principal with Mercer. "In corporate development, where the roles and responsibilities of the position and its prominence within the company vary, it's more difficult to do so."

The result is that there is little comparative data available to CEOs and compensation committees setting salaries for corporate development executives. Many companies link bonuses and long-term incentives to the effectiveness of the deal process and measurable due diligence outcomes. The corporate development executive at the Fortune 500 industrial giant mentioned earlier says his bonus is 35% to 50% of his base salary. Long-term stock incentives are another 35% to 50% of base. Both the cash bonus and stock are influenced by overall company performance (40%) and individual performance (60%). Individual performance, he says, is measured on how smoothly the functional deal team ran, whether the stated timeline was met, and whether the assumptions developed during due diligence were accurate.

WHAT'S NEXT?

The cyclicality of the M&A market is never far from any dealmaker's mind, corporate dealmakers included. And for good reason. "The bust of 2000 had a significant impact on corporate development departments," says Adam Lehman, who helped build America Online Inc.'s corporate development function in the late 1990s. "Corporate restructuring occurred within major companies, which led to downsizing of corporate development. Corporate development is always vulnerable because it's often viewed as a luxury rather than a necessity."

Is that perception changing, though? The evidence we've gathered suggests that it is. Despite the heated deal market, most companies haven't gone crazy building big in-house deal teams. The teams they have built are more disciplined and tightly woven into the organization. And with external growth initiatives -- whether M&A, joint ventures or strategic alliances -- now better understood by CEOs and boards as central to success, the skills being honed inside corporate development departments are sure to remain in demand.

And yet corporate development positions are likely to remain more subject to change, for better and sometimes for worse, than many other kinds of executive positions. Just for starters, the post comes with all the political complexities that some corporate staff jobs are known for. What's more, the jobs can also be closely identified with particular strategies -- which, of course, are subject to change.

Stats are hard to come by, but anecdotal evidence suggests that turnover in senior corp dev positions is high compared with other functions. On the other hand, some senior corp dev leaders have been in place for a while and expect to spend their careers in the field, perhaps in that very job. In different ways, both kinds of shops face the problem of making sure they have adequate experience on hand while also providing career paths for the smart, ambitious people they need.

Given that challenge -- and the nature of the work itself -- bringing in outsiders may always be a significant part of the mix. And corporate development career paths, while they may become a bit more predictable, may never be terribly linear.

But why would they be? The corp dev function, after all, is the chief mechanism through which companies are learning to interact with the most dynamic parts of the economy. On a fundamental level, it's about change. And corp dev folks seem quite comfortable with that. - Suzanne Stevens

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A treasurer turned oil-patch dealmaker

Al Richey has been one busy buyer and seller in the past 18 months. Last year, he simultaneously spirited through Anadarko Petroleum Corp.'s $22.5 billion acquisitions of Kerr-McGee Corp. and Western Gas Resources Inc., the first double merger in the industry. He followed that up by leading a $13 billion to $15 billion asset divestiture program to pay off the deals' debt and more finely tune Anadarko's assets (the company has sold $13 billion to date, with its Venezuelan assets still to go). Richey is an industry veteran who earned an M.B.A. from the University of Virginia's Darden School of Business in 1974. He held a variety of dealmaking and financial posts at Transocean Inc., United Energy Resources Inc. and privately held Sandefer Oil & Gas Inc.

He joined Anadarko as treasurer in 1987, a year after the company was spun off from pipeline giant Panhandle Eastern Corp. "Anadarko was small, with about $10 million in net income, and was primarily a drilling company," he says. He added vice president to his title in 1995 and in 2005 was tapped by new CFO Al Walker to become vice president of corporate development. "He asked me if I would like a change, so I left the comfortable confines of treasury to do this. Six months later, we did a double merger." Richey manages a team of 23, half in acquisitions and divestitures and half in development. While the company is not a serial acquirer, the corporate development team is always open to offers. "You have to kiss a lot of frogs before you find your prince," says Richey, who celebrates his 20-year anniversary with Anadarko this year. "It seems like I just came here for a cup of coffee," he quips. "I'll let my wife pick the award." -- Claire Poole

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Law, AOL in the 1990s and now venture capital

dam Lehman has been a lawyer, a playwright, an entrepreneur and a corporate dealmaker, who spent much of the 1990s helping to build a fledgling America Online Inc. into an Internet titan.

A graduate of Harvard Law School, Leh- man spent nearly three years at Skadden, Arps, Slate, Meagher & Flom LLP before landing in 1995 at AOL, which, at the time, was third in the market behind Prodigy Communications Corp. and CompuServ.

"There wasn't a tremendously deep corps of dealmakers embedded inside the company. I took the job on the legal side, and the first couple of years were an absolute whirlwind. We did literally hundreds of deals."

Lehman moved into business affairs (which eventually absorbed AOL's corporate development function), where he helped scale the department from 15 to 150 people. As a senior vice president, he also had responsibility for building AOL's international presence. "I probably made 20 trips to Europe one year seeking new opportunities where we could plant a flag through acquisitions or joint ventures." It was about the time of the AOL/Time Warner merger in 2000 that burnout began to set in. "It became eminently clear to me that AOL was not going to be highly nimble at a time when it was important that it be highly nimble. At the same time, I was coming off 7-1/2 years of really intense work and a huge amount of international travel."

After taking a sabbatical, during which he wrote 40 plays, many of them performed in community theaters or off, off Broadway venues, Lehman tapped his entrepreneurial side, co-founding seven companies and the venture firm Rock Ridge Ventures in 2002. So does he miss corporate dealmaking? "When AOL was in high-growth mode, and I had all the resources and momentum of AOL at my back, it was crazed in terms of lifestyle, but it was a fantastic stretch." -- Suzanne Stevens

The 17-year itch

It's not unusual for an in-house legal counsel to transition to corporate development. What is a bit unexpected is for the change to take place after nearly two decades. That was the case for Aqua America Inc.'s Mark Kropilak who after 17 years working on the company's legal team, earned an M.B.A. from Villanova University in 2002. He became vice president of corporate development later that year and in February was promoted to senior vice president. He also serves as the company's corporate counsel.

The Pennsylvania native, who earned his law degree from Columbia University, joined Aqua America after a stint at Philadelphia law firm Morgan, Lewis & Bockius LLP, where he practiced public utility, environmental and administrative law.

The combination of skills needed to succeed in corporate development--finance, law, marketing, communications--can overwhelm newcomers to the field, says Kropilak, who in his 22 years with Aqua America has worked on hundreds of deals. Beyond valuing and structuring deals, he says, "there's the whole psychology of working with the other party."

That is why at Aqua, which is aggressively buying up municipal water systems, a sense for the politics in each locale is also highly valued. To that end, the company has eight to 10 corporate development people covering the 13 states in which it operates, plus three to four additional staff at its headquarters in Bryn Mawr, Pa. "It's a lean department," he says, "but we form teams as deals arise, tapping local experts to work on them." -- Christine Idzelis

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A Goldman guy turned Cisco Kid

Heading up the most active dealmaking unit at one of the most active and successful technology acquirers has got to be one of the coolest jobs in corporate dealmaking. It's a fact not lost on Charles Carmel. As senior director, corporate business development at Cisco Systems Inc., he directs the corporate development unit that oversees many of the company's most important markets, including the consumer and service provider sectors and digital media, security, wireless and unified communications technologies. "As one person working in a large company, it's pretty unique to have an impact on an entire industry," Carmel says. "When we get it right, we can change the direction of an entire market."

Many of the deals led by Carmel have indeed been groundbreaking, starting with the 2003 purchase of home networking equipment maker Linksys Group Inc. for $500 million, which marked Cisco's first departure from the enterprise and service provider market and into the consumer market. He also led the networking equipment maker's efforts to buy set-top box maker Scientific-Atlanta Inc. for $6.9 billion and WebEx Communications Inc., a maker of conferencing technology, for $3.2 billion earlier this year.

Before arriving at Cisco, Carmel spent three years working on technology deals with Goldman, Sachs & Co., then started an M.B.A. program at Stanford University that led to a summer internship at Cisco in 2000. He was hired full-time as senior vice president for strategy and corporate development that September. The switch from banking to dealmaking at Cisco has allowed Carmel to get more deeply involved in strategy as well as presenting a few obstacles. "Cisco has lots of different stakeholders, and it's sometimes challenging when you have your own vision of the right way to push a strategy. You have to take into account the internal and external elements. Its not a lone-bandit kind of job." -- Olaf de Senerpont Domis

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In vino veritas -- and a varied career

Paul Hetterich, executive vice president for business development and corporate strategy at Constellation Brands Inc., has played many different corporate roles in his career. The one constant has been wine. After graduating with a degree in business administration from Le Moyne College in Syracuse, N.Y., Hetterich landed a job selling wine for Wine Merchants Ltd. A few years later, he moved into product development for Canandaigua, N.Y.-based Widmer Wine Cellars, acquired in 1986 by Canandaigua Wine Co., which in 2000 was renamed Constellation Brands Inc. At Constellation, the world's largest wine company, Hetterich has worked in a variety of departments, from product marketing to brand management to business administration.

"Constellation, going back to its roots of Canandaigua Wine Co., was always acquisitive," he says. "So exposure to facets of acquisitions goes back to my marketing roles." Besides, growing in-house means he's gained an "intimate knowledge about the company's culture, values, and structure." Hetterich became SVP of corporate development in 2001 and led a number of major transactions, including the formation of the Pacific Wine Partners venture with BRL Hardy Ltd. in 2001. In 2003 he was promoted to EVP of business development and corporate strategy, leading an eight-person team that among other deals negotiated the purchases of Robert Mondavi Corp. in 2004 for $1.03 billion and Vincor International Inc., Canada's largest wine company, for $1.31 billion in 2006. Strategy plays an increasingly important role for the corporate dealmaker, says Hetterich, especially as the industry becomes more competitive. "Our group has always been involved, but as Constellation Brands has become larger, the stakes become larger and there is little room, nor tolerance, for error." -- Amy Wu

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Coming home to corporate dealmaking

Richard Walker, senior vice president of corporate development at Colorado-based IHS Inc., is a native of the Denver area. And though he has spent years bouncing around the country, Colorado keeps luring him back. After a four-year, post-collegiate (University of Colorado) stint in accounting with Arthur Andersen LLP in Atlanta, Walker returned to Denver in 1991, earned his M.B.A. through the University of Denver's executive program and then signed on with regional Bell US West Inc., moving from operations to marketing to investor relations before landing in corporate development.

When US West paid $12 billion for Continental Cablevision Inc. in 1996 and split its fixed-line and mobile-cable groups, Walker went to Boston with the latter, which became MediaOne Group Inc. He was eventually routed back to Denver and stayed on board until Media- One's $44 billion sale to AT&T Corp. in June 2000. Of those megadeals, Walker says: "I had a role," but he says the important thing for him was the opportunity to work with M&A mentors, something he deems an essential part of becoming a corporate dealmaker.

Walker went on to test the private equity waters and later operations with online car seller Autobytel Inc., spending three years commuting to California before taking his leave to spend time with his four daughters and enjoy Colorado's year-round riches, like skiing, biking and golfing. "In that period of reflection," he says, he kept returning to one conclusion. "I really enjoy creating value through M&A."

Up popped an opportunity with Englewood, Colo.-based technical information provider IHS Inc. Reporting to IHS CFO Mike Sullivan, Walker leads a four-man team--which has closed six deals since he joined in December--charged with evaluating and pursuing M&A activity companywide. "The big ones are a lot of fun," he says. "But it's the smaller transactions where you really learn M&A and you really learn where value is created or destroyed." -- Carolyn Murphy

From softwear to software

Alex Lintner's path to his post as senior vice president, strategy and corporate development at Intuit Inc. was paved with a little serendipity, a lot of non-technology-related consulting work and a great deal of sexy lingerie. Before joining Intuit two years ago, Lintner was a vice president and director of the Boston Consulting Group's West Coast consumer practice, where he helped transform Victoria's Secret Stores Inc. into the largest retailer of intimate apparel. When Intuit signed on as a BCG client, Lintner became the company's consultant, in large part because he was one of the few partners who hadn't done work for Microsoft Corp., the firm's largest client.

After two years, Intuit hired Lintner as senior vice president of strategy and corporate development, overseeing a team of 39 and reporting to chief executive Steve Bennett. In engineering the $1.35 billion acquisition of online banking service provider Digital Insight Corp. in February, he showed how a company like Intuit can use its top-selling products--in its case, Quicken--as a springboard to growth.

Not that the strategy works every time. Intuit's plan to get into payments processing to round out its small-business accounting offerings was put on hold in December, when its $142 million deal for Electronic Clearing House Inc. fell through. Intuit killed the deal after the target became part of a federal investigation into online gambling, triggering a material adverse change clause. "That was certainly a disappointment, because we believe very much in payments processing for credit and debit cards, and we want to acquire these opportunities," Lintner says. He and Intuit aren't about to give up. "We will announce a deal before the end of the year," he says. -- Olaf de Senerpont Domis

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'You need to be able to park the legal degree'

Chris Dewees tread a common path into corporate development. Before being named senior vice president, corporate development, at communications equipment maker JDS Uniphase Corp., he worked as an attorney, first at Morrison & Foerster LLP and later as corporate counsel at JDSU, which he joined in 1999. In 2002, he was promoted to general counsel. He says the legal background comes in handy when negotiating deals, but that it must be balanced with people skills and business savvy. "You have to be a very business-focused attorney in this line of work," he says. "You need to be able to park the legal degree."

Dewees has seen JDSU fall from a high-flying optical equipment maker that got caught up in the 1990s bubble to a down-and-out company in need of a turnaround and, more recently, to a company that is growing again. In the boom times, JDSU acquired as many as 15 companies in a single year. Although it makes fewer purchases these days, acquisitions remain central to its ongoing turnaround strategy. "Over two years, I've seen more transformation than many people see in a career," says Dewees. Key to JDSU's return to growth was its acquisition of Acterna Inc. in 2005, which brought it entrée into a new business selling testing equipment used in the installation of optical networking gear.

Dewees attributes the success of his corporate development team in part to the group's diversity. The staff includes a few "gregarious, extroverted types," as well as some more technologically savvy people to facilitate technical reviews, and sales and marketing types who may rotate out of his department and into senior roles at one of the company's business units. "Corporate development is a highly desirable place for people who have been with the company for a while and are looking for something different," he says. "I get a lot of inquiries." -- Andrea Orr

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A Goldman guy turned Cisco Kid

Heading up the most active dealmaking unit at one of the most active and successful technology acquirers has got to be one of the coolest jobs in corporate dealmaking. It's a fact not lost on Charles Carmel. As senior director, corporate business development at Cisco Systems Inc., he directs the corporate development unit that oversees many of the company's most important markets, including the consumer and service provider sectors and digital media, security, wireless and unified communications technologies. "As one person working in a large company, it's pretty unique to have an impact on an entire industry," Carmel says. "When we get it right, we can change the direction of an entire market."

Many of the deals led by Carmel have indeed been groundbreaking, starting with the 2003 purchase of home networking equipment maker Linksys Group Inc. for $500 million, which marked Cisco's first departure from the enterprise and service provider market and into the consumer market. He also led the networking equipment maker's efforts to buy set-top box maker Scientific-Atlanta Inc. for $6.9 billion and WebEx Communications Inc., a maker of conferencing technology, for $3.2 billion earlier this year.

Before arriving at Cisco, Carmel spent three years working on technology deals with Goldman, Sachs & Co., then started an M.B.A. program at Stanford University that led to a summer internship at Cisco in 2000. He was hired full-time as senior vice president for strategy and corporate development that September. The switch from banking to dealmaking at Cisco has allowed Carmel to get more deeply involved in strategy as well as presenting a few obstacles. "Cisco has lots of different stakeholders, and it's sometimes challenging when you have your own vision of the right way to push a strategy. You have to take into account the internal and external elements. Its not a lone-bandit kind of job." -- Olaf de Senerpont Domis

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Engineering M&A and communications, too

Barry M. Abzug, senior vice president for corporate development at Iowa-based aerospace firm Rockwell Collins Inc., boasts three engineering degrees, including a Ph.D. But he says he has always been trending toward his current role. "Even early in my career, I was almost always on the border between the technical world and the business world, working with marketing folks on how to define new products and services for customers," Abzug says. "I have always been a concept guy and a future-looking guy, and not a design-detail guy."

Abzug rose through the ranks at the engineering and manufacturing provider ITT Corp. before joining Rockwell Collins in 2001, just as it was being spun out of Rockwell International Corp. He had little direct experience doing deals at the time.

"When Rockwell Collins put me into this position, they were much more interested in someone with strategic background than someone with detailed nuts-and-bolts experience with acquisitions," Abzug says. "They said, 'We believe you can learn the M&A talk, but what we need is someone who can chart our strategy.' " His 65-person department manages not only M&A and strategy tasks but investor relations, advertising and public relations as well. "When I came in the door, our CEO said, 'I want to know there is one place where it all comes together in terms of our communications with all constituents,' and that is our role."

Abzug oversees one to two transactions a year but says his biggest career highlight to date came during his time as an engineer. Early work he did developing speech compression algorithms found its way into Texas Instruments Inc.'s Speak and Spell toy.

"It is certainly the part of my career my kids talk about," he says. -- Lou Whiteman

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