Bank Of America Says Google's New CFO 'Mixing In Some Wall Street Culture'

In a report published Tuesday, Bank of America analyst Justin Post said that Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)'s new Chief Financial Officer Ruth Porat has significant technology banking and financial management experience and seems well prepared for her new job, although the cultural change from Wall Street to Silicon Valley will be "substantial."

"With five years of experience as Morgan Stanley's CFO, Ms. Porat also has significant regulatory expertise," Post wrote. "Initial reaction to the news was positive, the street likely hopes that Ms. Porat could lead Google to be more investor friendly (Morgan Stanley has had a round of cost cutting, pays dividends, and has a buyback authorization)."

Post said that the language Google used in its CFO press release suggests there could be a "change in trends relative to the above-trend hiring and capex spend in 2014."

Post also noted that Google is a "founder driven" company and it is difficult to predict any impact Porat may have on the company's culture. Nevertheless, the analyst suggested Google's new executive consider the following changes:

• Provide forward guidance for non-operational items like tax rate and potential impact from foreign exchange.
• Reverse a negative trend of growing stock-based compensation as a percent of revenue.
• Revisit financial reporting lines and disclosures so investors have a better idea of the search business and that it's time to disclose YouTube data.
• Provide regular updates on Google's capital return outlook.

Shares of Google remain Buy rated with an unchanged $650 price target.