Even though CFOs are among the most highly paid executives at large companies, the CFO position also has the highest turnover rate.
According to research by Datarails — based on complete filings of company records of 2,056 of the biggest U.S.-listed companies between 2016 and 2021 — over half (56%) of the companies experienced one CFO turnover, and 16% had more than one CFO turnover in the five-year span.
Among their fellow executives, CFOs had the shortest tenure. On average, organizations saw their CFOs last an average of 3.5 years. While CEOs stayed for just under four years, other executives were likelier to stick around. Both marketing and technology executives, for example, averaged well over four-and-a-half years in their roles.
Digging deeper, Datarails found that nearly three-quarters (72%) of companies had multiple CFOs in the past five years. Three publicly listed companies had five CFOs between 2016 and 2021: manufacturing company Superior Industries International, retailer Sally Beauty, and marketing services company Harte Hanks.
Near the Top in Compensation
Despite high CFO turnover, CFO salaries are some of the highest among executive leaders. Datarails found that the average CFO compensation among the companies researched, including salary, bonuses, stock awards, and options, rose from $ 2.4 million in 2016 to $3.5 million in 2021 — a 40% increase over five years.
With the increasing demands of the job, compensation is important to CFOs and will likely remain important. Recent outside data shows that, despite their hefty pay, nearly three-quarters of executives were stressed about their personal finances.
However, in recent conversations with Tim Zue of the Boston Red Sox and Andre Maciel of Kraft Heinz, who have been with their employers for 20 and 10 years, respectively, the veteran CFOs said culture and people were why they chose to remain in their positions for extended periods. Rather than compensation, technology, work environment, or perks, CFOs who like where they’re at feel that way because of the people around them.
Companies that wish to retain financial talent — including the person at the top — must be vigilant in creating (1) an environment for finance to grow and succeed and (2) a culture that will be attractive to a CFO over the long term.