Good morning. Because the CFO position grows extra advanced, demand for high finance leaders is rising.
As such, CFO wage will increase stay regular as public corporations navigate financial uncertainty. New information launched this morning by Compensation Advisory Companions (CAP), a consulting agency, examines 2024 compensation outcomes for CFOs relative to CEOs. The evaluation covers 155 public corporations with a median income of $12.6 billion and financial years ending between Aug. 31, 2024, and Jan. 1, 2025.
In 2024, the median base wage enhance for CFOs was 4%, whereas CEOs noticed no change—mirroring 2023. In 2022, median base wage will increase had been 3.8% for CFOs and a couple of.9% for CEOs.
“We had been anticipating wage will increase to begin shifting downward, given the labor market,” Kelly Malafis, founding associate at CAP instructed me. “However wage will increase are prone to stay regular for CFOs.”
This stability is pushed by excessive turnover as a consequence of retirements or departures and robust demand for finance chiefs. The CFO position stays a key management place and strategic associate, contributing to increased pay, in accordance with CAP.
As corporations face challenges comparable to cybersecurity and AI implementation, CFOs have change into central to those methods, Malafis stated. Organizations are looking for finance chiefs with the skillsets to deal with this, along with core finance experience to arrange for the longer term, she stated.
Wanting again at 2024, some distinguished CFO hires that come to thoughts embrace Alphabet’s recruitment of Anat Ashkenazi from her CFO position at Eli Lilly, bringing her on because the tech firm’s finance chief. Sarah Friar, former CEO of Nextdoor and ex-CFO of Sq., joined OpenAI. Karen Parkhill turned CFO of HP, coming from Medtronic. These are only a few notable examples.
CAP’s evaluation discovered that for executives within the information set who did obtain a bump to their wage, the median enhance was 5.7% for CFOs and 4.1% for CEOs. The earlier yr, CFOs’ median enhance was 5%, and 5.1% the yr earlier than that. Likewise, CAP doesn’t count on a big decline in CFO wage will increase subsequent yr, Malafis stated.
An LTI pattern
Though CFOs are presently seeing larger wage will increase than chief executives, CEOs nonetheless lead in whole compensation, in accordance with CAP information. Over the previous decade, CFO whole compensation has averaged about 33% of CEO compensation, the agency’s analysis exhibits. The median tenure for these positions is often round seven years, stated Roman Beleuta, principal at CAP. “Each time there’s a reset, you’re form of resetting the bar once more,” he defined. “That’s why that ratio stays at a few third.”
At public corporations, long-term incentives (LTIs) for executives are often delivered by means of time-vested restricted inventory, performance-vested inventory, or inventory choices. “One pattern we’ve highlighted is the discount within the variety of corporations utilizing all three automobiles,” Beleuta stated. 5 years in the past, 33% of corporations surveyed used all three, in comparison with simply 22% at present.
Efficiency-based fairness plans stay the biggest element of LTIs for each CFOs and CEOs. LTI awards elevated a median of seven% for CFOs and 5% for CEOs in 2024. Over the previous decade, LTI awards have grown by a median of 6% yearly for each roles.
Bonus payouts in 2024 rose 2.6% for CEOs and 5% for CFOs in 2024. Complete direct compensation elevated 3.5% for CEOs and 6% for CFOs, primarily as a consequence of increased long-term incentive awards.
With demand for expert finance chiefs rising, CFO compensation is predicted to stay sturdy.
Leaderboard
Fortune 500 Energy Strikes
Jesus “Jay” Malave was appointed EVP and CFO of Boeing (No. 63), efficient Aug. 15. Brian West, who served as Boeing CFO for the final 4 years, will change into a senior advisor to Boeing President and CEO Kelly Ortberg. Malave was most just lately CFO of Lockheed Martin and earlier than that held the positions of SVP and CFO at L3Harris Applied sciences. He spent greater than 20 years at United Applied sciences Company, together with serving as vp and CFO of Provider Company when it was an working unit of UTC, and vp and CFO at UTC Aerospace Methods.
Each Friday morning, the weekly Fortune 500 Energy Strikes column tracks Fortune 500 firm C-suite shifts—see the newest version
Extra notable strikes
Pierre Revol was appointed CFO of FrontView REIT, Inc. (NYSE: FVR), efficient July 21. Revol brings greater than 20 years of expertise. Most just lately, he served as SVP of Capital Markets at CyrusOne. Earlier than that, Revol served as SVP of company finance and investor relations at Spirit Realty Capital, Inc., previously a publicly traded net-lease REIT.
Marc Grasso was appointed CFO of Kyverna Therapeutics, Inc. (Kyverna, Nasdaq: KYTX), a clinical-stage biopharmaceutical firm, efficient June 30. Grasso brings greater than 25 years of expertise to the corporate. He succeeds Ryan Jones, who will transfer to a strategic advisor position. Most just lately, Grasso served as CFO of Alector, Inc. Earlier than that, he held the place of CFO and chief enterprise officer of Kura Oncology.
Massive Deal
Thomson Reuters, a worldwide content material and know-how firm, has launched its 2025 Way forward for Professionals report, revealing a big hole between organizations with formal AI methods and people with out.
Drawing on insights from 2,275 professionals in authorized, danger, compliance, tax, accounting, audit, and international commerce, the report finds that organizations with an outlined AI technique are twice as prone to report income progress from AI and three.5 instances extra prone to understand important AI advantages, in comparison with these with no important AI adoption plans.
Regardless of these benefits, solely 22% of respondents say their organizations have a transparent AI technique. In consequence, many companies could danger falling behind in each returns and aggressive progress, in accordance with Thomson Reuters.
Going deeper
“How Personal Fairness Corporations Are Coping With Tariffs” is a report in Wharton’s enterprise journal. Tariff disruptions supply non-public fairness traders alternatives to amass undervalued belongings, however additionally they problem their reliance on predictable earnings, in accordance with Wharton’s Burcu Esmer.
Overheard
“The way forward for collaboration just isn’t man versus machine, however man with machine—in an open, seen course of the place each contributor can see, study from, and be pretty assessed for his or her effort.”
—David Ferrucci, managing director of the nonprofit Institute for Superior Enterprise AI on the Middle for International Enterprise, writes in a brand new Fortune opinion piece.
