CFO Pay: Going Up Again?

According to a new survey, finance chiefs were the only execs to see a bump-up in compensation last year.
Lisa YoonSeptember 5, 2002

Never mind that the most well-known finance chiefs in the U.S. are well-known because they’ve been pictured on the evening news being led off in handcuffs. No, despite all the court cases and plea bargains and SEC cease-and-desist orders, it’s still shaping up to be a relatively decent year for CFOs.

That is, on the compensation front. According to a recent survey of executive pay conducted by executive-recruiting firm Christian & Timbers, compensation dropped dramatically last year for all senior managers — except finance chiefs. CFOs actually witnessed a four-percent increase in overall pay.

That number’s intriguing, considering the results of’s most recent compensation survey (conducted in conjunction with Mercer Human Resource Consulting). That survey looks at the salary, bonuses, and long-term incentives of 234 finance chiefs working at 350 of the largest U.S. companies ($1 billion in revenues and up) that filed proxies between July 31, 2001 and April 5, 2002. According to that survey, compensation for top finance chiefs dropped one percent last year.

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(To see the 2002 Compensation Survey, click here.)

But the Christian & Timbers seems to indicate that CFO salaries (for newly filled positions) have started to head back up. The study did reveal a 13-percent dip in bonuses, the smallest bonus decrease for all executive positions surveyed. But CFOs blew other execs out of the water in base salaries, with a 12 percent jump up. Conversely, base salaries for all other positions (except COO) decreased anywhere from three percent (VP of sales) to 21 percent (CIO, VP of marketing). COO salaries increased by five percent.

Average annual compensation packages (including salary and bonuses) for finance chiefs rose from $272,250 in the first half of 2001 to $282,015 in the first half of 2002.

Christian & Timbers CEO Steve Mader says he was surprised by the survey results. He noted that compensation doesn’t usually follow current economic trends this quickly. He attributes the rise in CFO compensation to an increase in job-hopping. “In harsh economic times you’re going to see a lot of transition, but especially in positions like CEOs, CFOs, and sales officers,” says Mader. He asserts that these positions often have the most immediate impact on a company’s performance.

Mader acknowledges that there is increased suspicion of CFOs in light of the year’s many accounting scandals. “The CFO image had come a long way — until now,” he says. “People see CFOs as worried about following the CEO’s instructions more than financial efficacy.”

Hence, Mader believes CFOs will have to jump through greater hoops, such as tougher background checks, to land higher-paying positions. But, Mader notes, a finance chief with an untarnished rep is becoming a hot commodity.

That’s something to keep in mind during a salary negotiation, says Mader. “CFOs tend to be conservative,” he notes. “This is the time to put on your assertive hat. You’re worth more than you think.”

CFOs on the Move

>> Tooth-whitening specialist BriteSmile Inc. appointed John Dong acting CFO, replacing Peter Hausback. Dong worked as controller and CFO at Computerland, Vectra Technologies, and D.V. Capital. Hausback recently moved his family to Spokane, Wash., apparently too long of a commute to BriteSmile’s Walnut Creek, Calif., headquarters… Carmine J. Napolitano named VP and CFO of Computer Access Technology Inc.. He was previously VP of administration and CFO Centric Software… Time-share operator Sunterra Corp. appointed Steven E. West CFO to succeed Lawrence E Young. West joins Sunterra from Coast Asset Management, a Los Angeles-based hedge fund where he was VP of finance. Young has been with Sunterra since October 2000 when Alix Partners (previously Jay Alix & Associates) were appointed as consultants to Sunterra. He will return to Alix Partners.

(Editor’s note: What do John Dong and Carmine Napolitano have to look forward to at BriteSmile and Computer Access Technology? See how those companies are faring with the CFO PeerMetrix interactive scorecards.)

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