CFOs are confident that their companies will do better this year, according to a recent survey from audit firm Grant Thornton. Sixty percent of 134 CFOs said their firms’ financial prospects will improve in 2007. That’s an improvement over last fall, when the audit firm last surveyed finance chiefs and found that only 37 percent predicted their companies’ performance would improve.
CFOs were also upbeat about the U.S. economy, with more CFOs predicting the economy will improve this year than said so last fall. This brighter outlook and increased confidence is similar to the sentiments expressed in the most recent Duke University/CFO Business Outlook survey, which found that 35 percent of CFOs are more optimistic about the economy than they were last quarter. Those results were worth nothing — it was the first time that CFO optimism about the economy had risen since hitting a five-year low in September 2006.
Still, the Grant Thornton survey suggests that CFOs have more confidence in the future of their own companies than the strength of the U.S. economy. At the same time, they believe inflation will remain flat. Seventy percent believe that to be true, while 33 percent of finance chiefs expect to raise prices or fees at their own companies. CFOs also don’t expect to plan to do much hiring — 53 percent expected no change in hiring levels, while nearly 10 percent expected to cut back.
As for their own jobs, CFOs saw plenty of room for improvement when it comes to the discrepancy between their pay and that of their CEO. Nearly half of the survey respondents said the gap is too large, although only 22 percent believe their company’s chief executive is overpaid. Salary envy doesn’t necessarily mean all CFOs want to be in the corner office, however. Slightly more than 43 percent said they want to be the CEO someday.
The audit firm’s survey also gauged CFOs’ take on a variety of corporate finance topics. Nearly 70 percent believe the Securities and Exchange Commission should require companies to disclose why they stopped using an auditing firm’s services. Nearly three-fourths of them believe shareholders should have more access to proxy statements. And 40 percent said they are not aware of XBRL, an Internet-language method of tagging financial data that is a pet project of SEC chairman Christopher Cox, who is pushing for widespread adoption by public companies (the latter result is an improvement over the fall 2006 survey results, when 47 percent of CFOs said they were unfamiliar with extensible business reporting language).