While freshly scrubbed teens tour the campus and sweat through admissions interviews at local college campuses, there’s a good chance that in another building, the college CFO is contemplating an application of another kind.
According to a recent survey of CFOs of four-year colleges and universities by Education Management Network, (the division of executive-search firm Witt/Kieffer that handles executive searches for education and other non-profit organizations), more than one-third of college finance chiefs are thinking of transferring. Of the 578 respondents, 35 percent are either looking for a new job now (17 percent) or plan to do so within a year (18 percent).
Why all the stirrings? The survey didn’t ask for reasons, says EMN/Witt/Kieffer consultant Gary Posner. But he suspects CFO turnover at universities and colleges is linked to the relatively high turnover of college presidents, whose average term is five to seven years. Once a new president in installed, cabinet members begin at least to consider other career options.
This desire to depart, however, doesn’t seem to jibe with some of the survey’s other findings. Consider, for example, that an overwhelming majority — two-thirds — of university finance chiefs believe their pay is equitable and fair.
So what’s fair? Clearly, respondents graded on a curve in answering that question. On average, collegiate CFOs who think their pay makes the grade earn a base salary of $144,700. Average base compensation for the dissatisfied (one-third of the respondents) is $106,500.
The average salary of all survey respondents was $127,484, with 24 percent earning between $150,000 and $250,000; 40 percent earn between $100,000 and $150,000; and 35 percent earn under $100,000.
Despite their plans to look for different employment, a good number of college CFOs also say it would take a major pay increase to get them to take new jobs. One-quarter of the respondents said they would need to see 30- to 50 percent increase in base salary before they accepted a new job. Thirty-two percent said they need 20- to 30 percent more money. A substantial slice — 17 percent — said no amount of money would make them move.
Posner says many college CFOs may be reluctant to switch jobs — even if many want to — because they don’t want to move their families.
One attractive aspect of working for a college or university is the relative job security, says Posner. “They don’t get to put their feet up,” he says. “But if they’re very good at what they do, they can usually stay a very long time.”
This, he adds, can sometimes be a reasonable tradeoff for the lower compensation levels college CFOs make compared with those of their counterparts in corporate America.
Incidentally, the pleasures of university life are not lost on private-sector finance chiefs. Posner says he’s observed an “increased interest” in corporate CFOs in moving to the non-profit world, “especially after they’ve made their money” in corporate America.
But those who do go back to school sometimes find themselves unprepared for the challenges of university administration. “They tend to be surprised by the collegiality,” says Posner (and with a straight face, too). “There’s much more sharing of information, a lot of committee deliberation and time-stretching.”
For example, a decision a corporate CFO makes in five minutes can take five months in university time. As a result, “many [corporate finance chiefs] are not able to make the transition.”
But for those who successfully adjust to the change, the rewards are apparently bountiful. “The adventure is different,” says Posner, pointing out the opportunity to affect the lives of students or work with luminaries like Nobel Prize winners. “They have the opportunity to turn the ship.”
CFOs on the Move
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