In one sense, CFOs did better than their bosses on the pay front in 2014, enjoying a 5.2% median hike in “actual total direct compensation” compared with a 3.2% gain for CEOs, according to Compensation Advisory Partners.

MoneyIn the consulting firm’s annual pay evaluation, it was the fourth year in the past five when finance chiefs had a higher pay increase on a percentage basis. The exception was 2013.

That doesn’t mean, though, that the pay gap between the two titles narrowed. Because CEOs continue to earn about three times as much as CFOs, on average, on a raw-dollar basis the top dogs pulled even further ahead.

The study included CFOs and CEOs at the 108 public companies that met the following criteria: at least $5 billion in revenue for fiscal year 2014; fiscal year-end between Sept. 1 and Dec. 31; proxy statement filing before March 31, 2015; and no change in CFO and CEO incumbents in the last three years.

Compensation Advisory Partners defines “actual total direct compensation” as salary, plus annual incentive pay received, plus the grant-date value of long-term incentives.

CFOs had the edge last year in pay-hike percentage in each category: salary (up a median 3.0%, vs. 0.3% for their bosses); annual bonus (7.8% vs. 4.3%); and long-term incentive pay (4.2% vs. 3.7%). The big gap in annual bonus was driven partly by greater opportunities for CFOs, whose median target bonus increased to 100% of salary, from 90% in 2013. The median target bonus for CEOs, meanwhile, was mostly flat at 150% of salary, compared with 147% a year earlier.

Among finance chiefs, 72% received a salary increase last year, compared with 51% of chief executives.

Across nine business sectors, the salary-gain disparity on a percentage basis was the greatest in favor of CFOs at consumer discretionary companies (4.3% vs. 0.0%). In two sectors, both positions registered the same salary trend (3.0% at utilities and 0.0% at financial firms). CEOs’ salary hikes did not outpace those of CFOs in any of the sectors.

Explaining the research results, Kelly Malafis, a partner in Compensation Advisory Partners, notes that in addition to the greater bonus opportunities for CFOs in 2014, “CFOs are more likely to receive salary increases that are generally in line with other company executive increases on an annual basis, while CEO salaries are increased less frequently. Compensation committees are more likely to give CEOs increases in the form of performance-based and at-risk compensation.”

Malafis adds that “given the level of scrutiny around CEO pay, total compensation for CEOs may be impacted to a greater degree than other executives when performance is below expectations.”

Photo: Jericho, Wikimedia Commons, CC BY 3.0. The image is unaltered from the original.

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