Good morning, CFOs. McKinsey names one of its smallest partner classes in recent years; the FASB will explore accounting on crypto transfers; Target plans to invest billions to upgrade its stores; and highlights from the CMO Council Summit.

Ascending to the highest ranks of McKinsey is becoming more challenging.

The details: The elite consulting firm on Wednesday named one of its smallest classes of partners in recent years, elevating 224 people to the much-coveted position, according to an internal note viewed by The Wall Street Journal.

Though an uptick from last year, when about 200 people made partner, the number remains sharply lower from a few years ago, Chip Cutter exclusively reports. In 2022, the firm elected nearly 400 people to its partnership class, buoyed by a pandemic-era boom in demand for its services.

McKinsey has since downsized its annual induction of new partners as it looks to tighten its leadership ranks and change how it is managed. The “bar for distinctiveness this year—and every year—is unapologetically high,” Bob Sternfels, McKinsey’s global managing partner, wrote in a memo to staff announcing the new partners.

The context: Becoming a partner at McKinsey, like similar promotions at law firms and banks like Goldman Sachs, can transform a career, bringing higher pay and prestige. This year’s partnership class includes 66 women, the highest share in the firm’s history; in North America, women make up 38% of those elected to partner this year.

📆 Earnings

• Copart
• Intuit
• Jacobs Solutions
• Ross Stores
• Veeva Systems
• Walmart

📈 Economic Indicators 

The National Association of Realtors reports existing-home sales for October.

The Financial Accounting Standards Board voted to explore companies' accounting for transfers of cryptocurrency assets, including wrapped tokens.

The board will add a project to its standard-setting agenda that would cover accounting for crypto lending, which could eventually result in new requirements. The board in October added a project to the agenda to clarify whether certain digital assets may be classified as cash equivalents.

The move follows public feedback seeking more crypto standards and a recommendation from a working group President Trump set up to support the crypto industry.

The FASB in 2023 set a new requirement for businesses to use fair-value accounting for bitcoin and other crypto assets. That rule excluded nonfungible tokens, or NFTs, and certain stablecoins.

—Mark Maurer

Here are some highlights for finance executives from the annual event held in New York this week.

Ryan Linder, global CMO of advertising company Stagwell, stressed the importance of the relationships among everyone in the C-suite:

“The only way that you’re going to succeed is if you are a member of that leadership team—sitting with the CEO, sitting with the CFO, sitting with your counterparts in communications, you name it, making sure that they value marketing, because if they don’t, no attribution, no campaign, no anything else is going to allow you to succeed. You’re failing out of the gate, so set yourself up to win.”

Laura Jones, CMO at Instacart, on proving out the return on investment on Super Bowl ads and running it by the CEO and CFO:

“Last year we went to the Super Bowl for the first time, and it was a big deal because I’ve been at Instacart now four-and-a-half years and when I arrived, we were basically just lower-funnel. We were pretty much doing search ads. So much of the journey was building that business case for more investment in brand and it started with expanding into different streaming services, audio, social. We’d been working our way up the funnel—linear television, then starting to buy higher-reach linear television placements. We did the Olympics. And each time we’re looking at: What are the returns? Are we getting value out of this, and what we saw is that actually that channel diversification strategy was hugely impactful for us because we had been so saturated in the lower funnel, and based off the strength of our prior NFL regular season buys and the Olympics, we went to our CEO and CFO and said, look, this is, this is our time. We’ve got to go to the Super Bowl.”

Target’s plan to fix its continuing sales slump involves billions of dollars in investment.

Incoming Chief Executive Michael Fiddelke said the retailer would invest about $1 billion more next year to improve stores, its merchandise selection and digital capabilities, bringing total new investment next year to $5 billion.

📰 Other headlines

• Fed’s October Rate Decision Fueled Pushback Over Possible December Cut
• Exclusive: AIG Withdrew Executive Hire After Inquiry Into Alleged Inappropriate Workplace Relationship
• Paramount Spoke to Middle-East Funds About Investing in Warner Deal
• Oracle Was an AI Darling on Wall Street. Then Reality Set In.
• Labor Department Won’t Publish October Unemployment Rate
• U.S. Appeals Court Halts California Rule Mandating Climate Risk Reporting
• Exclusive: Brookfield Is Raising $10 Billion for New AI Infrastructure Fund
• Musk’s xAI and Nvidia to Develop Data Center in Saudi Arabia
• Exclusive: Santander Exposure to First Brands and Its Founder Rises to Around $300 Million
• Exclusive: U.S. Approves Deal to Sell AI Chips to Middle East
• Trump’s DEI Slayer Is Just Getting Started

📈 Earnings wrap-up

• T.J. Maxx Owner Still Drawing Budget-Conscious Shoppers Ahead Of Holiday Season
• Nvidia Profits Soar, Soothing Investor Jitters Over AI Boom
• Palo Alto Networks to Buy Chronosphere for $3.35 Billion, Posts Higher Revenue

Xerox Holdings, the Norwalk, Conn.-based printer maker, appointed Chuck Butler as CFO, effective Dec. 3. Chief Financial Officer Mirlanda Gecaj plans to leave the company to pursue new opportunities. Before joining Xerox, Butler served as senior vice president and CFO at Lexmark, where he helped guide the company through its acquisition by Xerox in July.

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