Smaller salary increases were the norm for finance professionals in 2018, including CFOs.
Treasury and finance professionals got an average 3.5% base salary increase last year, according to the Association for Financial Professionals, compared with 4.3% the year before. Staff-level finance team members saw bigger increases in base salary (3.9%) than those in the management and executive tiers.
Base-salary increases for both executive and management tier finance professionals fell about 1 percentage point from 2017. The data was produced by the Association for Financial Professionals for its annual compensation survey, which polled nearly 3,600 finance professionals holding 22 different job titles.
Among the executive positions — CFOs, vice presidents of finance, treasurers and controllers — controllers garnered the highest average base salary increase in 2018, 3.6%.
Chief financial officers got a particularly low base salary increase of 2.9%. That was compared with the more than 5% boost they saw in 2017. CFOs’ average base salary for 2019 was $234,433 (see chart). At organizations with $1 billion or more in revenue, the average was considerably higher — $395,603. CFOs in the Northeast and in the West also drew higher salaries.
Despite smaller salary boosts, CFOs and other executive titles saw higher average bonuses last year — a jump of 23% over 2017. The average bonus for executive-tier professionals was $81,731, or 42% of base salary (for CFOs it was $119,501).
Bonuses were most often awarded based on operating income or EBITDA (earnings before interest, taxes, depreciation, and amortization) targets (61% of companies). Completion of specific projects (48%), profit or increased profit (46%), and sales or increased revenue (33%) were also popular measures determining bonus awards.
Given all the talk about finance department skills, the AFP asked its members about which competencies finance professionals need most. More than half (55%) of respondents cited “strong analytical skills,” and more than one third said “leadership and people management” (37%). “Communication skills with internal and external stakeholders” was the third most chosen, at 32%.
Although leadership and other people skills were judged essential, a large share of survey respondents — 37% — said financial professionals at their organizations lack leadership skills. In addition, one third ( 33%) also perceived a dearth of “strategic and innovative skills,” and almost one third (32%) said finance executives’ interpersonal skills were wanting.
When asked about what led to upward mobility and career advancement in finance, respondents most often cited “increased job responsibility,” at 86%. Other factors high on the list were contribution to profitability (69% of respondents), earning a professional certification (36%), earning an MBA or other advanced degree (30%), and becoming a CPA (24%).
The AFP survey, conducted in February 2019, collected data on total compensation earned by financial professionals during calendar year 2018 as well as data on base salaries effective January 1, 2019.