Walmart Hires PayPal’s John Rainey as CFO to Succeed Biggs

(Bloomberg) -- Walmart Inc. named PayPal Holdings Inc. Chief Financial Officer John Rainey as its new finance chief, turning to a company outsider as it seeks to build a financial-technology venture and a membership program. 

Rainey will start his new job June 6, Walmart said in a statement Tuesday. A veteran of United Airlines who jumped to PayPal in 2015, Rainey will replace Brett Biggs, who last year announced plans to leave Walmart by early 2023.  

The new CFO will take over as the world’s largest retailer grapples with soaring inflation, supply-chain headaches and rising U.S. labor costs. The company has also seen healthy sales gains during the pandemic period, although its performance has fallen short of rivals such as Target Corp. and Costco Wholesale Corp.  

Two big projects await Rainey. One is Walmart’s plan to provide a fintech app that enables customers to save, borrow and receive money. The other is expansion of its paid membership program -- Walmart+ -- that is widely seen as an answer to Amazon.com Inc.’s Prime. 

“John’s mix of financial and digital acumen, coupled with his experience leading finance in complex, highly competitive industries, will help us deliver for our customers and shareholders as we continue to transform our company,” Walmart Chief Executive Officer Doug McMillon said in the statement. 

Walmart was little changed at $153.36 after the close in New York. Paypal fell 1.5% to $106.65 at 5:22 p.m. 

PayPal Search

Rainey will remain with PayPal until late May, when Gabrielle Rabinovitch, senior vice president for corporate finance and investor relations, will take over as interim CFO. 

The payments giant’s board has started a formal search process to replace Rainey, who was also the executive vice president for global customer operations at PayPal. That team will now join the risk, legal and customer operations organization led by Aaron Karczmer. 

“We’re not surprised that one of the world’s top brands has recognized John and his contributions to building PayPal into one of the most innovative technology and financial services companies in the world,” PayPal CEO Dan Schulman said in a statement. 

Alongside Schulman, Rainey helped refashion PayPal into a financial behemoth that ended last year with more than 420 million active accounts. The San Jose, California-based company now processes more than $1 trillion a year in payments. 

PayPal -- long known for its payment buttons on retailers’ online checkout pages -- has added savings accounts and the ability to buy and sell cryptocurrencies to its app. It’s now exploring stock trading to customers.

Fintech Goals

Still, Paypal has struggled in recent months as growth in spending on its platform continued to slow compared with the flurry of activity it saw in the early days of the pandemic. The technology giant’s former parent, EBay Inc., has also continued to move its own payments offerings away from PayPal faster than the company originally expected. 

That’s weighed on shares. PayPal has dropped 43% this year, compared with the 15% decline in the S&P 500 Information Technology Index. 

In recent quarters, PayPal has sought to boost the number of active accounts on its platform and was spending more on marketing campaigns. But in February, it announced a review of its business and uncovered 4.5 million accounts it now believes were illegitimately created to reap the benefits of those campaigns. The firm announced it will focus on improving engagement with existing customers.

“The timing of the CFO departure is unfortunate, given the material pivot PayPal is undergoing,” Daniel Perlin, an analyst with RBC Capital Markets, said in a note to clients. “The fact that management did not use this opportunity to reiterate guidance, in the face of such a material event, does call into question if a reset could be necessary.”

Fintech Efforts

Walmart, meanwhile, has been vocal about its desire to expand into financial technology. The Bentonville, Arkansas-based retailer last year formed a new fintech startup with the investment firm Ribbit Capital that it said was meant to “develop and offer modern, innovative and affordable financial solutions.” It later hired two Goldman Sachs Group Inc. executives to help lead the effort. 

In January, Walmart’s fintech venture agreed to buy two small companies, rebranding them as ONE. As part of the CFO transition, Biggs will continue to represent Walmart on the startup’s board. He will also serve as an adviser at Walmart until leaving on Jan. 31, 2023.

Airline Background

Before his tenure at PayPal, Rainey spent 18 years in the airline industry, at United and Continental Airlines. He’s not the only leader at Walmart with a background in airlines: Lead director Tom Horton is a former CEO of American Airlines. 

Rainey started his career at Ernst & Young. He serves on the boards of Nasdaq Inc. and Baylor University’s Hankamer School of Business. 

“I am incredibly excited about my next chapter with the largest company in the world,” Rainey said in a post on LinkedIn. 

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