Ex-chamber leader to run top executive search firm
By JEFF HARRINGTON
© St. Petersburg Times, published May 26, 2001
ST. PETERSBURG -- Paul C. Reilly, head of international operations for KPMG International and onetime president of the St. Petersburg Area Chamber of Commerce, is leaving St. Petersburg to run the world's biggest executive search firm.
Korn/Ferry International said Reilly, 47, will become its chairman and chief executive July 1 as the recruitment firm ended a five-month executive search of its own. Reilly succeeds Windle B. Priem, who will stay on as a director and recruiter.
Reilly is well known in St. Petersburg, having served as a chamber president in the early 1990s while he was local partner in charge of KPMG's consulting practice, then known as Peat Marwick.
As a civic booster, Reilly promoted Bay Plaza, the ambitious and ultimately unsuccessful effort to revitalize downtown St. Petersburg in 1991. His activism on the project came under fire when it was discovered that Reilly made money with several business partners on the deal after he advised the city to pursue it as a financial consultant.
At the time, Reilly said his consulting was unrelated to the real estate deals on which he made about $2,500. "I'm not going to sell my soul for $2,500," he said.
Reilly continued to work out of St. Petersburg, even after being named CEO of KPMG International in 1998. Now, he will move to Los Angeles, Korn/Ferry's headquarters city, according to company spokesman Daniel Margolis.
By most accounts, Korn/Ferry will need the hands-on attention.
After setting records last year, the executive search industry hit a slump, with businesses curtailing hiring and taking longer to commit to searches when vacancies arise.
"The outlook for executive search is about as clouded as it's been in close to a decade," said Arnold Ursaner, managing director of CJS Securities. "Corporations are sitting on their hands."
Reilly told the Los Angeles Times he views the slowdown as cyclical and that Korn/Ferry can capitalize on an increased demand for executives in the next 10 years as baby boomers retire.
"There is going to be a shortage of senior executives," he said. "Any time you have those shortages, there's a high demand and need for services."
Korn/Ferry and its close competitor, Heidrick & Struggles International, benefited from unprecedented demand for executive searches last year, fueled in large part by the need for people to lead high-tech start-ups. Both firms saw revenues pass the $500-million mark for the first time. In the end, Korn/Ferry retook the No. 1 position, ending fiscal 2000 with revenue of $500.7-million, up from $356-million the year before.
Despite the slowdown in the job market this year, Korn/Ferry reported $504.4-million in revenue for the first nine months of fiscal 2001 and projects year-end revenue of $650-million. Net income for the nine months was $23-million, compared with $20.4-million in the first nine months of 2000.
Industry analysts credited Korn/Ferry's acquisition of several boutique firms and the global expansion of its Internet-based recruiting arm, Futurestep, with helping it retake the industry lead.
Priem said the board was attracted to Reilly's experience running a global professional services business. KPMG has more than 100,000 employees in 156 countries, with annual revenues exceeding $13-billion. Korn/Ferry has 2,400 employees worldwide.
- Jeff Harrington can be reached at (813) 226-3407. Information from the Los Angeles Times was used in this report.
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