CFO pay is increasing, and the CEO-to-CFO pay gap is shrinking.
Here are 15 findings on CFO compensation from three recently released reports.
CFO pay is increasing
1. Total direct compensation for CFOs at 159 companies in the S&P 500 increased a median of 6.7 percent in 2014 compared to 5.6 percent the year prior, according to a recent Mercer report. Mercer's analysis is based on compensation data from 32 S&P 100 companies and 127 other companies in the S&P 500.
2. Short-term incentives for CFOs increased a median of 8 percent in 2014, and CFO base salary increased a median of 3.2 percent. Although these pay elements also increased in 2013, growth rates were generally lower across the board, according to Mercer.
3. The median base salary for CFOs at the 159 companies in the S&P 500 increased to $624,000 in 2014.
4. The median base salary for CFOs at S&P 100 companies grew to nearly $800,000 in 2014, according to Mercer.
5. Long-term incentives for CFOs increased a median of 7.2 percent to nearly $1.8 million in 2014.
6. CFOs at S&P 100 companies received median long-term incentives of $4.1 million, while CFOs at the other 400 companies received median long-term incentives of $1.5 million, according to Mercer.
CFO vs. CEO salaries
7. When looking across all industries, the median CFO salary grew more than the median CEO salary last year, and salary increases were provided more frequently to CFOs than CEOs, according to a report by Compensation Advisory Partners. The findings were based on 108 companies, each with the following: at least $5 billion in revenue; a fiscal year ended in the fourth quarter; a proxy filed before April; and a CEO and CFO who each served in their respective roles with the companies for three years or more.
8. In the last two years, about 70 percent of CFOs received salary increases, while about half of CEOs received salary increases, according to Compensation Advisory Partners.
9. The median salary increase for CFOs was 3 percent last year, while the median salary increase for CEOs was just 0.3 percent during the same time period.
10. The higher pay growth for CFOs was partially driven by higher annual bonus target opportunities in 2014, according to Compensation Advisory Partners.
11. As a percentage of median CEO pay, compensation for CFOs increased to 35 percent in 2014, compared to 32 percent in 2012, according to Mercer.
12. Regarding the pay gap between CEOs and CFOs shrinking, Ted Jarvis, global director of executive compensation data, research and publications at Mercer, said, "A number of factors are likely at play, but the chief impetus may be pressure on the CFO position due to increased regulatory requirements and focus on financial risk."
13. Mr. Jarvis also said the narrowing gap may be due to the role of CFO being viewed increasingly as a strategic one. He said the prestige of the CFO role has risen since the onset of the current economic recovery.
14. CFO total compensation continues to be approximately one-third of CEO total compensation, according to Compensation Advisory Partners.
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7 key notes on CXO salaries
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