Human Capital & Careers

SURVEY: Eight Tables Show Gap Between CFOs and CEOs Narrowing

Top CFO paychecks at small firms, how they compare to the boss, how much they're growing, and more.
David KatzJanuary 16, 2001

CFO compensation at small- to medium-sized firms has been surging over the last four years, both in absolute terms and in comparison to what CEOs are making, according to a survey of executive compensation by Frederick, Maryland-based Panel Publishers.

A breakdown of the top five earners among the chief financial and accounting executives at the 885 firms studied shows two from the electrical and electronics industry. The firms analyzed for the study ranged from about $2 million to $200 million in annual sales.

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“Total compensation” (or “total direct compensation”) refers to either the sum of base salary and bonus or the total compensation amount reported for the period by the survey respondent. (Tables 1 through 4 were provided to CFO.com by executives of The Segal Company in New York who worked on the survey; the remaining tables are based on those found in the 2001 Officer Compensation Report, recently published by Panel.)

Table 1: The Top 5 Highest-Paid CFOs Surveyed*

Total Comp. Base Salary Bonus Industry Group State Company Revenues (000) Profit Margin/ Loss
1. $984,000 $353,000 $631,000 Electrical & Electronics New York $157,104 11%
2. 758,000 319,000 439,000 Heavy Equip & Trans Ohio 187,400 5
3. 668,000 400,000 400,000 Business Services Florida 4,952 8
4. 542,000 175,000 367,000 Electrical & Electronics Michigan 229,261 16
5. 463,000 300,000 161,000 Tech Services New York 185,154 50

*Figures are projections for 2000.
Source: Panel Publishers

Over the last four years, CFOs’ median total direct compensation as a percentage of what their CEOs earn rose 10 percentage points at the surveyed firms.

Table 2: CFO’s Median Pay as a % of CEO’s Pay

Year

% of Base Salary (incentive/bonus ineligible)

% of Base Salary
(incentive/bonus eligible)

% of Bonus

% of Total Direct Compensation

2000* 73% 60% 34% 56%
1999 70 59 36 52
1998 62 58 34 49
1997 61 53 31 46

* Projected
Source: Panel Publishers

In absolute terms, CFO median pay has been surging at the companies analyzed for the Panel survey.

Table 3: CFO Pay Trends from 1997 to 2000

Median Pay

Year

Base Salary
(incentive/bonus ineligible)

Base Salary
(incentive/bonus eligible)

Bonus

Total Direct Compensation

2000* $116,000 $120,000 $25,000 $144,000
1999 114,000 113,000 27,000 145,000
1998 108,000 101,000 25,000 132,000
1997 116,000 95,000 25,000 128,000

* Projected
Source: Panel Publishers

CFO stock option awards as a percentage of salary have shown strong growth

Table 4: CFO Stock Option Awards from 1997 to 2000

Year

Average Options Awarded

Options as a % of Salary

2000* 41,457 248%
1999 322,235 1,873
1998 32,226 276
1997 21,213 129

* Projected
Source: Panel Publishers

Like other top executives, CFOs tend to own a smaller piece of the firm the larger the firm gets.

Table 5: % of Company Stock Ownership by Officer*

Company Size by Sales (in $Millions )

Title <$2 $2- 5 $5- 9 $10- 14 $15- 24 $25- 39 $40- 59 $60- 99 $100+
CEO/ Pres. 34.8% 30.4% 22.6% 20.3% 18.8% 15.6% 18.9% 12.0% 15.0%
COO 20.2 10.1 16.2 6.8 7.9 5.2 5.3 3.4 5.3
CFO 10.6 4.0 6.6 5.4 4.8 2.8 2.3 1.4 3.9
Sales/ Mktg Exec 7.5 14.2 10.1 4.2 3.1 2.1 1.2 1.7 4.2
Mfg/ Prod Exec 16.3 7.6 5.5 4.0 6.0 12.6 0.9 1.0 3.2

*Median Figures
Source: 2001 Officer Compensation Report, Panel Publishers

The same percentage of eligible CFOs as that of CEOs were awarded stock options last year.

Table 6: Incentive Plan Eligibility and Payout by Officer

Short-term Plans
Long-term Plans
Title Total Sample Size Sample SizeEligible % Receiving Annual Bonus Sample SizeEligible % Eligible Awarded Stock Options
CEO/President 879 751 71% 572 58%
COO 358 329 66 230 52
CFO 583 527 72 394 58
Sales/Mktg Exec 390 353 74 226 60
Mfg/Prod Exec 207 191 75 84 38

Source: 2000 Officer Compensation Report, Panel Publishers.

Bonuses paid to CFOs were much higher at companies above $100 million in yearly sales.

Table 7: Compensation of CFOs by Company Size

Company Size by Sales (in $Millions )

<$2 $2-5 $5-9 $10-14 $15-24 $25-39 $40-59 $60-99 $100+
Incentive/Bonus Ineligible
Base Salary 2000* (000’s)
Sample Size 5 12 9 13 8 9 2 5 2
Average $155 $103 $89 $105 $134 $129 $151 $144 $149
Median 135 105 98 106 129 120 151 148 149
1st Quartile 133 84 68 75 109 97 140 125 140
3rd Quartile 185 122 108 125 157 165 162 155 157
Incentive/Bonus Eligible
Base Salary 2000* (000’s)
Sample Size 18 38 55 57 65 43 62 54 101
Average $118 $89 $93 $108 $111 $129 $131 $134 $172
Median 100 69 82 104 110 126 130 126 170
1st Quartile 75 52 60 70 79 107 104 109 137
3rd Quartile 134 110 120 135 128 146 156 156 197
Bonus 2000* (000’s)
Sample Size 14 34 41 44 48 31 46 44 77
Average $35 $35 $32 $28 $30 $33 $48 $200 $81
Median 23 8 12 15 11 12 14 20 62
1st Quartile 10 4 6 7 11 12 14 20 25
3rd Quartile 34 20 33 32 43 41 52 64 100
Total Direct Compensation 2000* (000’s)
Sample Size 18 39 54 57 65 43 62 54 99
Average $143 $120 $119 $131 $133 $156 $168 $299 $239
Median 118 81 106 117 124 146 150 155 210
1st Quartile 85 56 70 80 98 125 130 131 168
3rd Quartile 177 130 161 157 157 186 194 205 273

* Projected

Source: 2001 Officer Compensation Report, Panel Publishers.

CFOs were paid much more in the Northeast than in any other region of the country last year.

Table 8: Avg. 2000 Total Direct Compensation of Incentive/Bonus Eligible Execs By Region*

Title Northeast Mid- Atlantic Southeast Midwest South West
CEO/ President $329,000 $204,000 $264,000 $334,000 $365,000 $293,000
Sample Size 177 22 55 147 57 192
COO $220,000 $198,000 $239,000 $242,000 $277,000 $218,000
Sample Size 56 5 30 67 16 69
CFO $238,000 $105,000 $163,000 $169,000 $163,000 $170,000
Sample Size 112 14 30 88 26 130
Sales/Mktg Exe $176,000 $120,000 $150,000 $180,000 $131,000 $171,000
Sample Size 64 13 17 62 14 75
Mfg/Prod Exec $143,000 $126,000 $186,000 $118,000 $101,000 $148,000
Sample Size 32 6 12 23 8 24

* Projected
Source: 2001 Officer Compensation Report, Panel Publishers.

Tables compiled by Joseph McCafferty