The Advisors' Blog

This memo from Compensation Advisory Partners examines CFO pay – as compared to CEOs – at 155 companies that have reported 2024 compensation. Here are a few highlights:

• Total Direct Compensation was up 6% for CFOs and 4% for CEOs (at median)

o CFO base salary was up 4.0% and CEOs were flat (same as 2023)

o More than half of CFOs (56%) had same or higher bonuses than 2023

o Long-Term Incentive awards increased 7% for CFOs and 5% for CEOs (vs. 11% and 9% last year, respectively)

• Over a 10-year period, CFO total compensation as a percentage of CEO total compensation has been approximately 1/3, ranging from 30% to 34% over this time frame.

The memo concludes:

Our study continues to support that paying for performance remains a focus for Compensation Committees and senior management. 2024 revenue and operating profit performance improved 3% and 5%, respectively, and bonus awards were directionally aligned.

The CFO role continues to serve as a key leadership role and strategic partner, which partially contributed to the higher movement in pay compared to CEOs. In terms of the target program, though pay mix stays relatively consistent over time, Compensation Committees are delivering the biggest increases in long-term incentives.

Looking forward to 2025, economic uncertainty prevails, so we expect no major changes in target programs. Compensation Committees will continue to spend a significant amount of time balancing compensation outcomes with performance, calibrating goal setting in an increasingly volatile political environment, and ensuring talent retention and attraction.

– Liz Dunshee