CEO pay rises faster than CFO pay

Chief executives’ compensation has risen more than that of CFOs the past two years at midsize public companies in the US.

Average CEO pay across eight sectors grew 19.2% between fiscal 2010 and fiscal 2012, and CFO pay grew 17.4% in the same period, according to data from two BDO USA surveys. The average pay for all sectors was $2.79 million for CEOs and $1.09 million for CFOs.

Chief executives got slightly larger pay raises than CFOs in the past year, the most recent survey shows. CFO pay at 600 companies in eight sectors grew 5% in the past year alone, according to BDO; CEO pay grew 6%.

“The CFO role is undergoing a period of notable change, as even more is expected of today’s CFOs,” Randy Ramirez, a senior director at BDO, said in a news release. “CFOs are no longer just the keeper of the numbers, but instrumental to executing the broad business strategy, from growth through acquisitions and maximising existing assets, to navigating an increased financial and industry-specific regulatory environment. As the position evolves, pay rates across some industries are starting to meet those new demands.”

CFOs made the biggest gain on CEOs in the banking sector. Finance chiefs in retail, real estate and energy also saw their pay rise as a percentage of CEO pay.

Overall, the highest pay for executives was in the real estate sector, according to proxy statements filed between May 15, 2012, and May 15, 2013, BDO said.

The average pay for real estate CEOs was $3.97 million, and the average pay for real estate CFOs was $1.49 million.

CFOs make 39.1% of what CEOs make, with banking CFOs the closest to their chief executives in terms of percentage of pay (45%). The percentage is smallest in retail, where CFOs make 33.6% of what CEOs do, according to the more recent survey, which examined the pay data for companies with annual revenue between $25 million and $1 billion.

In larger companies, the discrepancy between CEO and CFO pay is greater, according to another survey. Mercer research showed that, among S&P 500 companies, median CFO pay as a percentage of CEO pay was 31.4% in fiscal 2011.

In its survey two years ago, BDO found that CFOs earned an average of 39.7% of CEO pay.

Sector highlights from current BDO survey

  • Banking CFOs’ salaries rose 18% in the past year, compared with 10% for CEOs. In retail, CFO pay rose 6%, compared with a 1% pay decrease for CEOs.
  • Manufacturing pay dropped for both executives: 12% for CFOs and 6% for CEOs. Pay also dropped slightly (1%) for health-care CFOs.
  • In the technology sector, CEO pay rose 16%, compared with 5% for CFOs. That was the biggest percentage discrepancy between the two categories. Technology executives were second behind real estate in terms of overall pay, with CEOs making $3.7 million and CFOs making $1.46 million.

Related CGMA Magazine content:

Five Tips on Setting Compensation for Senior Execs”: C-suite compensation has drawn increased scrutiny for several years. Here are five tips for remuneration committees to use as a guide in setting executive pay levels.

CFO Pay Rises, but Subjective Bonuses Rankle Finance Chiefs”: CFOs are dissatisfied with the amount of bonuses awarded subjectively, according to the AICPA/Arizona State University 2013 CFO Incentives and Compensation survey.

Neil Amato ( is a CGMA Magazine senior editor.