While the role of finance chiefs continues to expand into uncharted territory, their take-home seems to be lagging behind.
On top of running the finance realm, more companies expect their finance chiefs to take an active role in other areas of business, such as HR. But the increased responsibility hasn’t translated into a sizable salary bump for most CFOs.
In fact, around 30% of finance execs reported that they didn’t receive a salary increase in 2008 — almost two times higher than what was reported in 2007.
These figures are taken from a recent study by Financial Executives International, the leading association of CFOs.
But the study did reveal an interesting contrast in exec pay between public and private firms. For example, average annual compensation for finance execs at public companies increased by 10%; exec pay at privately held businesses dropped by 2%.
Moreover, the study also found discrepancies between public and private companies in the amount of bonus pay that CFOs received:
- Bonus pay of CFOs at public companies who received bonuses: 21%-70% of their annual salaries.
- Bonus pay of CFOs at private companies who received bonuses: 11%-50% of their annual salaries.
Experts expect this salary trend to continue until economic conditions improve because, despite the example of firms such as AIG, executive pay is supposed to mirror the overall financial health of a company.