Given the general backlash, companies drastically cut back on options programmes in favour of performance-based cash and share rewards. In the UK, for example, only 37% of companies today offer employees stock options, compared with 72% ten years ago, says Towers Perrin.
Whatever the mix of base and incentive-based pay, overall pay packages for CFOs have risen steadily, reflecting the role’s rising profile. “Most good finance directors now are effectively deputy managing directors,” says Venables. For his part, he is responsible not just for finance but also for M&A, IT and investor relations.
And CFOs are demanding more from their teams. But that’s easier said than done. Venables notes that the biggest challenge is finding finance managers with “good people instincts.” Max Messmer, CEO of recruiter Robert Half International, agrees, noting that sustained hiring in accounting and finance over the past several years has resulted in “an increasingly shallow talent pool.”
The pool is about to shrink further, observes Jim Matthewman, a partner at Mercer, another HR consultancy. As a case in point he cites statistics from the UK, where 19m of the working-age population are baby boomers (who are starting to retire this year), compared with 11m who are generation X and 7m who are generation Y.
Management styles also need to change to accommodate the new demographics. In particular, generation Y — those born in 1982 or later — are said to demand more time and attention from their managers than their predecessors. An article recently published by our US sister magazine, CFO, that questioned the loyalty of this new generation stoked plenty of criticism. One reader from generation Y shed light on what would buy their loyalty: “Provide meaningful training, assign jobs that allow for growth, mentor — don’t micro-manage, work with the employee by providing meaningful job experiences, pay a good wage,” and the list goes on.
In CFO Europe’s quarterly survey of finance chiefs, the cost and availability of labour has been a top-three concern for many years. Faced with such scarce, expensive and demanding young talent joining the junior ranks, it looks likely to stay that way.
Call them barbarians at the gate or a catalyst for corporate efficiency, private equity firms have been prominent players during ten years of extraordinary change across Europe’s capital markets.
Amid stock exchange closures and consolidations, coupled with a widening and increasingly complex range of ways to raise capital, it’s private equity firms that have been changing the game the most for Europe’s finance chiefs.
As CFO Europe has reported over the years, the pre-dominance of private equity has introduced new challenges for finance executives, whether it’s coming to terms with a new owner or introducing their company to the public markets after a private-equity shareholder exits. For the daring CFO, it’s also opened up some new career opportunities, as private-equity firms look for financial talent to oversee their investments.