The numbers are in for salary increases of executives from 2012 to 2013, and they have an interesting, if not particularly surprising, story to tell. CEOs saw an overall 13 percent increase in their salaries, outdistancing their CFOs, who only saw an increase of 8 percent. CFOs hold numerous responsibilities within companies, including directing overall financial policies, with a focus on accounting, treasury, tax, and more.
According to the recent report, CFOs of small companies earned a 15 percent increase, which was still a great deal lower than the 39 percent increase seen by CEOs. Particular industries showed more visible discrepancies, as in the energy sector, where CFOs saw a 21 percent increase in salary, relatively low when compared to the CEO salary increase of 45 percent. CFOs in the retail sector, on the other hand, saw a decrease in salary of 11 percent, while their CEOs only experienced a pay decrease of 4 percent.
While some difference between salary increases is to be expected, the disparity between CEOs and CFOs offers commentary on the differences between the two positions. CEOs, because of their higher position in the corporate hierarchy, are expected to receive a relatively large increase in salary. CFOs, despite their high position, are simply not considered as important as CEOs. This is occurring even whilst CFOs hold more important positions in business than ever before, in addition to many companies’ active restructuring of upper management.
In many companies, CFOs are in charge of more than financial operations. For example, the position of COO has been eliminated entirely from some companies. In turn, the responsibilities of this position are absorbed by the CFO. Other companies are turning to their CFOs as replacements for retiring CEOs. Nevertheless, a heavier reliance on CFOs still does not translate to an equal increase in pay, whether or not a CFO’s responsibilities have increased more than those of the CEO in the same company.
It remains to be seen if the trend of increasing CFO responsibility will continue. If so, it should be interesting to note whether salary increases will reflect that change in the future.