2004 Finance Executive Career & Compensation Survey

Compensation for CFOs and other senior finance executives is climbing as demands sharpen across a broad spectrum of responsibilities.

When describing his role as CFO of Big Lots Inc., Joe R. Cooper begins by explaining the $4.2 billion retailer's branding efforts. He quickly summarizes a national television marketing campaign and runs through Big Lots' Web site. He then moves on to outline the company's merchandising and supply-chain initiatives. "The finance organization here is involved in all aspects of the business," explains Cooper, who was promoted in February from the post of vice president and treasurer. "We're highly involved in planning strategic initiatives, targeting the desired returns of those efforts, communicating their objectives and helping to hold the business accountable for the results of the initiatives."

That said, over the past year, Cooper -- a former Big Four auditor -- has greatly increased the amount of time he spends flexing his CPA skills because he's been overseeing Big Lots' compliance with the Sarbanes-Oxley Act. "It's not as if you get to relax your attention on the strategic side of the business or on your operations" as a result of regulatory demands, he explains. "You just need to commit more energy to the control side."

Cooper was drawn to Columbus, Ohio-based Big Lots four years ago by the variety of challenges his job encompasses; the importance the company places on its finance function; and the leadership qualities of then-CFO Mike Potter, who has since ascended to CEO. This kind of mutual attraction between well-rounded CFOs and organizations that highly value finance is common, according to the results of Business Finance's 2004 Finance Executive Career & Compensation Survey, which was sponsored by Ajilon Finance. The responsibilities of top finance executives continue to expand -- and their compensation is keeping pace.

Sixty-one percent of CFOs who participated in the Business Finance survey earned more in 2003 than they did in 2002, and 44 percent of CFOs expect their earnings to rise again in 2004. Half expect to earn about the same amount that they made in 2003, and only 6 percent predict that their pay will fall this year. Among all survey respondents, most of whom have senior-level titles (see Methodology on page 27), 62 percent saw a compensation increase in 2003, and 59 percent anticipate another jump this year (see graph 2, below).

These findings do not surprise Neil Lebovits, who is president and COO of managed services, consulting and staffing firm Ajilon Finance, Office & Legal in Saddle Brook, N.J., even though few (if any) other corporate functions have seen steady compensation increases over the past few years. "Every finance department was asked to do more with less during the recession," Lebovits notes. "When Sarbanes-Oxley appeared, finance was asked to do even more with even less. And the risk associated with upper-level finance positions increased. Now CFOs and, frankly, even strong divisional controllers want to get paid for the risk of signing their lives away."

Sarbanes-Oxley's quarterly certifications and the subsidiary certifications many divisional controllers are signing -- added to soaring workloads and a reduction in resources -- warrant higher pay, Lebovits argues.

"The big story," he emphasizes, "is that there is a demand for increased compensation among finance executives and that demand is being met. You definitely see more and more creativity in how companies are compensating senior finance executives. They're not being cheap about it."