Print this article | Return to Article | Return to CFO.com
Finance chiefs derived the bulk of their income from bonuses last year: so what happened to pay for performance? Plus: Tight job market making it tough on older executives.
Lisa Yoon, CFO.com | US
September 23, 2002
Care for some salary with your bonus?
According to a study of CFO bonuses released today by executive-benefits consultancy The Todd Organization, finance chiefs continue to make the bulk of their compensation off bonuses. The study revealed that on average, CFOs took home cash bonuses that were 64 percent of base pay, or $194,923. The median bonus was 36 percent of cash pay, or $100,308.
The information was obtained from 2001 fiscal year proxy statements for all U.S.-based publicly held companies with revenues of $250 million or more.
"Chief financial officers have a high amount of compensation at stake as the traditional period known as 'bonus season' approaches," says Ron Roth, a senior vice president at The Todd Organization.
"With most companies about to enter their fourth quarter and soon to report third-quarter results, now is the time when companies will have a better gauge on how their corporate performance compares with last year," notes Roth.
Not surprisingly, larger public companies generally provided CFOs with a higher percentage of salary in bonus than others. What was surprising: despite recent public outcry over excessive executive compensation—despite lackluster performance—CFOs still derived a sizable amount of their compensation from corporate performance-related bonuses last year.
"Corporate as well as individual performance are the chief factors that typically determine a CFO's annual cash bonus," says Roth. Other factors include the executive's length of service with the company.
Survey: Age Discrimination on the Rise
According to a recent survey by online career-services center ExecuNet.com, age discrimination is on the rise in today's soft executive-employment market.
The survey of 340 executives nationwide found that 61 percent believe age discrimination is a greater problem today than it was just one year ago. More than one-third of respondents (35 percent) report encountering age discrimination in their most-recent job search.
"With demand for executive talent down, there's increased competition for every opening," says Dave Opton, CEO and founder of ExecuNet.com. "Unfortunately, in this type of a market, age bias becomes more pronounced."
Of those surveyed, 42 percent believe age becomes a significant factor in a hiring decision at or below the age of 50; an additional 42 percent see discrimination in the 51—55 age range; and 16 percent report age becomes an issue after age 56.
CFOs on the Move
Nationwide Mutual Insurance Co. said Robert A. Oakley is retiring from his posts as EVP and CFO, as well as from the same posts at Nationwide's subsidiary Nationwide Financial Services Inc. Oakley was named CFO in 1993. Company also announced appointment of Robert A. Rosholt as EVP for finance and investments. Rosholt comes to Nationwide from Chicago-based Aon, where he was EVP and operations chief of the risk-services unit... Kyle Wescoat was named finance chief of apparel-brand licensing company Cherokee Inc. Wescoat was previously CFO of sneaker manufacturer Vans Inc…. Commercial receivable-management specialist The ABC Cos. promoted Christine Newhouse to post of director of accounting. With ABC since 1979, her previous jobs included controller and accounting manager…