The Financial Executive Compensation Survey, which examines salaries, bonuses, long-term incentives and retirement benefits of more than 1,100 financial executives from both public and private companies, finds the estimated average base salary increase of all respondents is 2.1% – a further decrease from 2009’s low of 3.7%. More than half of all respondents (57%) stated that they did not receive a salary increase in 2010, according to a press release.
However, virtually all public and private company CFOs (96%) reported receiving a bonus this year. The amount of respondents who received an additional cash-based long-term incentive award increased for the first time in the four years the survey has been conducted.
For the fourth year in a row, the base salaries of public and private company CFOs remained proportionate to companies’ annual revenues.
For public company CFOs, the average base salary for 2010 is $285,000, a decrease from the prior year’s survey ($296,800). After factoring in bonuses and long-term cash incentives, the average total cash compensation is $480,877.
Adding stock-based compensation, retirement and perquisites, the average total compensation for public company CFOs is $680,407. Bonuses for public company CFOs vary across the board. While a fraction reported no bonus, about 8% of respondents reported a bonus that exceeds 100% of their base salary.
For private company CFOs, the average base salary for 2010 is $204,800, an increase from the prior year’s survey ($199,600). After factoring in bonuses and long-term cash incentives, the average total cash compensation is $285,044.
Adding stock-based compensation, retirement and perquisites, the average total compensation for private company CFOs is $367,311. Bonuses for private company CFOs also varied across the board.
Most Financial Professionals in DC Plans
The Financial Executive Compensation Survey from the Financial Executives Research Foundation found three out of four respondents (76%) participate in a defined-contribution plan offering an employer match. Though the total number of employees participating in these plans decreased slightly from 2009 (80%), the average employer match increased to 4.2% for public companies and 3.8% for private companies (from 4% and 3.6%, respectively in 2009).
The majority of financial executives surveyed (67%) stated that they do not participate in defined benefit plans, or their companies do not have a plan. The number of executives who do not receive additional retirement benefits dipped to 79% (compared with 84 % in 2009).
According to the press release, other survey findings on areas of non-salary and bonus compensation include:
- The percentage of respondents receiving a long-term cash incentive (based on other calculations or in the form of deferred compensation) increased this year for the first time in the four years the survey has been conducted (up to 27% from 18% in 2009).
- 54% of respondents received some form of stock-based incentive compensation, with stock options as the most cited type of award (30%).
- For public company respondents, the most prevalent performance measures used to determine annual compensation continue to be company goals and objectives.
- 33% of respondents indicate they use discretionary performance measures to determine compensation, and 24% rely on earnings before interest, taxes, depreciation and amortization (EBITDA).
- The majority of this year's respondents do not have employment contracts (54%), revealing a slight shift from 2009, when only 46% did not have employment contracts.
- For those who do have contracts, the most common element is the change-in-control severance (applies to at least 28% of those with employment contracts).
- The percentage of respondents who receives perquisites remains consistent with prior years, with cell phones as the most common benefit for the fourth consecutive year (76%).
Results of the survey are free for Financial Executives International members, and non-members can purchase the survey results for $129, by visiting http://www.ferf.org/bookstore.