Slimmer paychecks for finance executives, moreover, could
mean that the smartest candidates opt for more-lucrative work.
“I think you would see a lot of ex-CFOs out there,” says Chazen.
“Of course,” he adds, laughing, “I’d gladly take all of my compensation
in cash, including the Black-Scholes value of the options.”
For now, at least, incentive pay for CFOs shows no sign of
disappearing. In fact, some experts believe we’ll see more of it
next year when the Securities and Exchange Commission’s new
compensation-disclosure rules take effect and CFOs will have to
be included in the proxy statement’s compensation table. Currently,
the five highest-compensated managers — a group that
doesn’t always include the finance chief — must appear.
“Now that CFOs are required to be listed with the top-five
list, you’ll see many of them getting raises,” says Van Putten.
That’s because CFOs will be able to compare their pay with that
of their peers and lobby for an increase. Also, some boards may
decide to increase CFO pay to levels similar to that of the other
Higher CFO pay would leave some executives with another
challenge: what to do with the bonanza. “Now I need to figure
out how to give away all this money,” says Chazen. “I want to
arrange it so that when I die my hand opens up and the last quarter
rolls out and into some charity’s pocket.”
Don Durfee is research editor of CFO.
Topping the CFO
Which finance executives have score the sharpest gains in pay?
One group of finance executives saw its pay rise more than any other last year, but
it wasn’t CFOs. It was controllers.
Between 2003 and 2005, the average base salary for corporate controllers
rose 22 percent, from $151,500 to $184,300. Bonus and long-term incentive payments
climbed even more sharply, by 37 percent and 29 percent, respectively.
It’s a simple matter of supply
and demand, says John Wilson, CEO of
recruiting firm JC Wilson Associates. Still worried about the possibility of
damaging accounting slipups, directors
are pushing CFOs to hire the most qualified
controllers they can find. Indeed, a
recent survey of finance executives conducted
by CFO Research Services (a
division of CFO Publishing) and Ajilon
finds that executives rate demand as
stronger for controllers than for any of
a CFO’s other direct reports.
Controllers are in no greater
supply today than they were five years
ago, however. Given aggressive hiring
by accounting firms, there may even be
“Controllers — especially the really good ones — are highly prized these
days,” says Wilson. “It’s driven by the board’s fear of surprises. As CFOs spend more
time on strategy, directors want a strong controller as a second line of defense,
knowing that the CFO won’t be spending much time on green-eyeshade activities.”