A Blueprint for Balance

Stephen Rivera, vice president, global technical accounting advisory services and policy, Johnson & Johnson (J&J), isn’t a typical number cruncher. He’s happy to crack a joke, he welcomes people into his office if they need something, and he’s eager to jump out of his seat to display a CBI Life Sciences Financial Series Industry Trailblazer Award in order to underscore his accomplishments. His energy is undeniable, and he has used this superpower to bring people together throughout his career. For years, he has been helping to shape the accounting side of biopharma, both at J&J and as a chairperson of the Pharma-Biotech Accounting & Reporting Committee, a grassroots consortium of accounting professionals in the biopharma industry.

REFRAMING A PASSION FOR CARING

Rivera started from humble beginnings. He was born in Brooklyn, and his dad was a sanitation worker. From an early age, he had a passion for taking care of people. Initially, he thought that would lead him to become a pediatrician or family physician. However, he realized that blood and cadavers “weren’t for him” when he was exposed to the medical profession in the 1980s.

Looking to pursue an alternate service-minded profession, he saw accounting as a way to advise and help people. He studied at St. John’s University and became a certified public accountant (CPA) in 1984. Since transitioning from public accounting to the pharma industry, he has been able to leverage his profession to aid and represent fellow accountants to better understand, influence, and change the status quo in biopharma. He has helped create positive change, not just for his own company but for the industry at large by advocating for better accounting policies that make it easier for users of the financial statements to understand the economics of a transaction.

“At the end of the day, it all goes back to the accounting and making sure that you are shaping things in a way that helps investors and is compliant,” he says. “My role has always been getting closer to the economics of what the transactions represent so that investors have a better way to explain if it makes sense. Sometimes, accounting is so theoretical that it doesn’t tie into economics, and people get very confused. This is where I think the industry has come together to bring things closer and make that happen.”

Rivera’s goal is to uphold biopharma’s life-saving mission and support business innovation and opportunities that can benefit the future of humanity.

“When the accounting and economics are misaligned, it gets in the way of cures, and that’s not a good day for anybody,” he says. “It’s not good for the industry, and it’s not good for the profession.”

APPRECIATING AN OUTLIER

When Rivera started his career at Coopers & Lybrand in the 1980s, the mission of a public accountant was to be a business adviser. His job was to deal with clients and build business, and his personality helped him excel at the job.

At the same time, he felt somewhat out of place because he was extroverted and didn’t fit the typical accountant profile.

“People never saw me fitting in because I had empathy for the clients,” he says. “I was never black and white, telling clients what to do. I would try to understand what they were trying to do and be a good listener. And the people I worked for in those days looked at that as a weakness.”

But Rivera never let that deter him and kept true to himself. In retrospect, he realizes that may have held him back. Many of his peers who were promoted had a personality that drove clients in a certain direction. But that just wasn’t Rivera’s style.

After six years, he started working for a small utility company in New Jersey as his initial transition out of public accounting.

One day, Rivera received a phone call to work at AT&T in a financial reporting position. The hiring manager was someone Rivera previously worked with on an audit.

She appreciated his personality and passion for accounting and took him under her wing.

“She was way ahead of her time when it came to looking for diversity and uniqueness,” he says. “She knew the profession needed more of that, and when she met me, she said, ‘This is great—someone who can really speak honestly and feel comfortable,’ as opposed to coming in and telling people what to do.”

Rivera went to Lucent Technologies through the AT&T breakup and then eventually made his transition from telecom to the life sciences industry. His move to another highly regulated industry was seamless because he was skilled in technical accounting and generally accepted accounting principles, transferrable skills that are always in demand.

His first job in the pharma industry was at Aventis Pharmaceuticals, which later merged with Sanofi. When the French company asked Rivera to relocate to Paris, he declined. Through word of mouth, J&J heard that Rivera was looking for a job in the US and brought him on board.

“It was a lateral move, which I didn’t care about because J&J is a great company,” he says. “Our Credo at J&J aligns with my beliefs—how we think about caring for people [and] how we think about reputation. It all made me want to come here.”

Rivera started in a technical role and then moved into a director role. When the person who was leading his group retired, he took over and started managing the accounting for the entire enterprise, which he still does.

Rivera says accounting doesn’t drive the value on when to buy things but reveals how the company reports and discloses it for investors. He describes technical accounting as being the foundation of the company.

“It’s like a house,” he says. “It’s the cement underneath the entire company. Without having the accounting right, everything falls apart, and you lose your reputation. You can fix broken products; you can fix broken buildings; but when you have bad accountants who do bad things and it’s in the media, that’s something you can’t get out of. You can never lose sight of the reputation of what the company represents.”

OVERCOMING OBSTACLES

Shortly after Rivera started in the industry in 2000 as director of financial legal accounting at Aventis, the Enron accounting scandal occurred. The energy corporation had been hiding entities offshore. To prevent further abuse of this nature, new regulations and legislation were issued, most notably the Sarbanes-Oxley Act of 2002.

“This hurt all industries and stifled innovation, because every time somebody made an investment in R&D, they had to look to these consolidation rules,” says Rivera. “Companies were walking away from opportunities because the accounting was too punitive. We used to do so many deals. But there was one year [around 2005] at J&J where we had almost no deals other than a true acquisition. No one could get a deal done. Every deal was a consolidation accounting issue, and the concern was that companies would have to consolidate an entity that they did not legally own.”

With the support of others in the industry, Rivera developed a dialogue with policymakers. He asserted that while it was important to recognize what happened with Enron, not everything benefitted from being consolidated. Together, they were able to get the pendulum swinging back toward the middle.

“We’re in a much better place today,” says Rivera. “We understand [the rules] and always look to them, but not in the way we used to.”

For the past 14 years, Rivera has used his voice as the chair of the Pharma-Biotech Accounting & Reporting Committee to discuss a variety of industry issues. The group has grown to include more than 100 accounting professionals from small biotechs to Big Pharma. They discuss emerging issues in accounting and topics unique to biopharma, such as business acquisition vs. asset acquisition, revenue recognition, sales-based milestone payments, collaboration agreements, in-process R&D, and goodwill impairment analysis.

Bringing these industry minds together is where Rivera shines. His mild, cheerful manner puts people at ease. His ability to listen makes people feel welcome. His ebullient personality is contagious.

“I have the skill of creating an atmosphere and getting people to talk,” he says. “I get people to feel comfortable and let their guard down, and then we can talk [candidly] about what’s going on and what’s at stake.”

TACKLING HOT TOPICS

Rivera is proud to be involved in shaping the accounting that exists today through his work on the committee. He has been able to create collaboration and consensus across the industry quickly, especially when issues arise that could have widespread negative impacts.

One of the topics currently being addressed by the committee is sustainability. Companies are conflicted about what it means for them and who owns it.

“As soon as there’s a number, people automatically say, ‘The accountants know how to do it,’” he says. “But this is way beyond accounting. We don’t know environmental laws. We don’t know all the metrics around climate and emissions. But we can help with developing processes and controls to help get that data and include it in a financial report.”

Another timely issue is whether accounting rules need to change as new concepts and ideas arise, such as crypto currency. There are various viewpoints on how to evolve, but Rivera believes that no accounting rule can ever be static.

“As the environment changes, as the industry changes, as work execution changes, so will accounting,” he says. “It’s another change-up that we might have to disclose to investors because of the way things have been done, and we have to prepare to be current on that.”

The committee also has discussed how increased automation might impact the workforce. Although technology can perform much of the information gathering that accountants have traditionally been responsible for, Rivera has confidence that the judgment of humans is irreplaceable. In fact, leaving the heavy lifting of data generation to technology can allow accountants more time for analysis.

“In the old days, I would spend hours working at night [tracking down data],” he says. “This is where accountants get a bad rep because we spend so much time finding stuff. Everything is manual, information is not readily available, you have to make phone calls, [and] you have to send emails. Artificial intelligence lets us flip the pyramid and make sure that the time spent on analysis is on top and information gathering is at the bottom.”

THE COURAGE TO BE DIFFERENT

Rivera brings his true self to work each day. Raised in a Puerto Rican-Italian household, it is his nature to talk with his hands and speak fast, he says, and he is proud of it.

“It’s okay to be you,” he says. “It’s okay to be authentic. It’s okay to have transparency. And vulnerability is okay, too.”

Though he’s always had a bold spirit, Rivera didn’t always advocate for himself. That was something he learned to do eight years ago when he was diagnosed with pancreatic cancer and was given six months to live. From that experience, he gained a newfound courage that signaled a turning point in his career.

Rivera decided it was time to speak up after he was still in a middle-management position after years of hard work. He felt he wasn’t getting the opportunity and recognition he deserved at the midpoint of his career.

“If you believe that you’re not being recognized fairly where you are, it’s time to move on,” he says. “People need to reassess their balance sheet value. I knew that my balance sheet value outside of the company was worth more than I felt internally at that time.”

Fortunately, someone who worked with Rivera at J&J noticed his frustration and talent. That advocate couldn’t understand how Rivera could go so long without being recognized because he had seen his value firsthand.

“I think a big part of my [stagnation was due to] how people think about me,” he says. “But this person came in and was open to me—was okay being with someone who is extroverted, caring, and different.”

With internal support, Rivera received his due and was promoted within one year, ultimately elevated to the executive level.

“It wasn’t about being threatening,” he says. “It was about taking care of me and finding happiness. I’m glad that someone stuck their neck out for me. I think that being happy and having positive energy means a lot to the people you work with and your family. I think that’s part of why I survived cancer.”

SUPPORTING DIVERSITY

Based on his experience rising through the ranks, Rivera worries about diversity in his profession. In his 40 years in accounting, he says he’s never had a diverse mentor. He hears from minority students that they don’t see accounting as a profession where they can excel or advance, particularly when the current leadership doesn’t represent them. From companies to standard setters to regulatory bodies, this lack of diversity often results in a one-dimensional way of thinking throughout the profession.

To counter this, Rivera has built a staff at J&J that includes talent and diversity of all types, such as professional, gender, and ethnic. His open-door policy allows his staff to share opinions and positions that may sometimes seem controversial, but he strongly believes that having people of different backgrounds brings original ideas and opinions to the forefront, which results in smarter decision-making. He also advocates for and promotes his staff to add to the diversity that J&J wants to see in its finance leadership.

While participating in employee resource groups and corporate diversity programs can be helpful, Rivera knows the value of having and being an advocate. He now pays it forward by sharing his story with college students and reaching out to young professionals and others in need of support. When a Mexican cafeteria worker saw Rivera’s name tag and asked how he could move up from serving coffee in the executive conference room to working for him, Rivera offered his advice. The man listened, went back to school, and received his MBA in accounting. He is now working at J&J and is in the process of taking the CPA exam.

“I always reinforce to other leaders that we need to be intentional,” he says. “There are people who are qualified, but we need to open the door and let people in.”

BRINGING PEOPLE TOGETHER

Rivera loves having people around him, whether that’s co-workers, friends, or family. He and his spouse raised four children— including a set of triplets—so get-togethers are always lively.

He has found that sharing his passion for cooking is a great way to gather people. Rivera is particularly fond of baking and enjoys bringing his creations into the office. He is known for his homemade crumb cakes, which have earned him the nickname “Stevie Cakes.” His chocolate-and-vanilla variety with dark chocolate crumbs on top is popular. He also makes plain, apple, blueberry, and peach versions. Another favorite is his tropical carrot cake, which includes pineapple and coconut.

“Food always seems to get people together to talk,” he says. “They come in and they can chat, which is fantastic. My motto is: I keep all the cooking in the kitchen, not on the books.”

— Elaine Quilici is a freelance content specialist based in New Jersey.