Human Capital & Careers

Ad-biz Finance Execs Get Bigger Raises

Advertising folks scored a whopping 8-percent average hike — compared with 4.75 percent overall — but survey-takers at FEI aren't optimistic about ...
Stephen TaubMay 5, 2008

The average corporate financial executive received a 4.75-percent salary increase last year, with those in the advertising business emerging with the top boost: 8 percent.

Public-company companies slightly outdid their private-company counterparts, drawing 4.96 percent more for the year, according to the second annual Financial Executives International (FEI) study, done with its affiliated Financial Executives Research Foundation (FERF) and released at FEI’s Phoenix conference today.

Coming in just behind ad-industry finance executives with the biggest raises were execs in metals, who scored an average 7.5-percent raise.

FEI doesn’t sound sanguine about prospects for similar overall pay boosts this year, however.

“While the current economic conditions and market turmoil are likely to impact the C-Suite this year, our results show that the salaries of the overall financial professional group are still up,” FEI/FERF CEO and President Michael P. Cangemi said in announcing the survey results.

Completed by the financial executives themselves, rather than by human resources or executive search firm executives, the survey questionned a total of 1,931 financial executives. Nearly half the total respondents (48.2 percent) identified themselves as a chief financial officers. The two industries most frequently represented were manufacturing, with 290 responses or 15.7 percent, and technology or software, at 160 responses or 8.7 percent.

The average total annual cash compensation for those identifying themselves as corporate CFOs was $373,100, of which $257,900 was base salary. Overall, total annual cash compensation for public-company CFOs was proportionate to the annual revenues of their employers, the survey said.

The median base salaries of public-company CFOs were also typically proportionate to company revenue. The median base salary of a CFO from a public company with less than $25 million in annual revenues was in the $201,000 to $225,000 range, a slight increase from the prior year’s survey.

The median base salary of a CFO from a public company with more than $5 billion in annual revenues was more than $401,000, also a slight increase from the prior year.

Interestingly, no CFOs from public companies with annual revenues of less than $25 million earned more than $400,000 per year.

When it came to bonuses, annual bonuses of private-company CFOs were lower than those of public company CFOs. Most bonus percentages for public-company CFOs fell within the range of 21-70 percent, while those of private company CFOs fell within the range of 11-60 percent, according to the study.

The most common performance measures used to determine annual compensation continued to be company and individual goals and objectives, FEI noted. These were followed by department, group or business unit goals or objectives; revenue growth; net income; and earnings-per-share growth.

Other interesting findings: The most popular perk continued to be company car or car allowance, which 29 percent of CFOs receive. The least popular perk? Housing or other living expenses, received by 2 percent of CFOs.

Job descriptions for public-company respondents included some specialized functions that their private-company counterparts often do not have. For example, public-company finance executives have more responsibility for mergers and acquisitions than do their private-company peers. Other areas of responsibility, identified by 5 percent or fewer of public-company respondents, include legal, purchasing, operations, investor relations, planning, mergers and acquisitions, and Sarbanes-Oxley compliance.