The gap between CEO and CFO pay is growing. Middle-market CFOs earn an average of $927,743, around 40 percent of CEO pay ($2,338,874), according to an analysis of 600 public companies conducted by BDO USA, LLP, a leading accounting and consulting organization. Both groups saw significant pay increases, with CFO pay up 19 percent and CEO pay up 25 percent over last year.
“CEOs have always earned significantly more than other executives, but we have seen an even greater divide in recent years due to an increase in CEO pay leverage tied to the performance of their company’s equity,” said Randy Ramirez, a Senior Director in the Compensation and Benefits Practice at BDO. “We expect CFO pay to start catching up within the next few years as the emphasis on pay-for-performance trickles down to other top executives.”
Pay also varies greatly by industry, with real estate CEO and CFOs both earning the most of any industry at $3,362,145 and $1,295,864, respectively. This is about three times the average pay of the lowest-compensated CEOs and CFOs in the banking industry at $1,037,685 and $442,425, respectively. Other top earners include executives in the technology and energy industries, while retail execs joined those in banking on the low end of the pay spectrum.
These findings are from the first edition of The BDO 600 CEO and CFO Pay Study which examines the CEO and CFO compensation trends in publicly traded companies with annual revenues from $25 million to $1 billion in the energy, health care, manufacturing, real estate, retail and technology industries; and publicly traded companies with assets between $50 million to $2 billion in the banking and financial services industries. The study included proxy statements that were filed between 5/15/2010 and 5/15/2011. BDO also publishes the BDO 600 Survey – Board of Director Pay Study that includes Board of Director compensation for the same 600 public companies.
CEO and CFO Compensation by Industry:
| 2010 CEO Pay | 2010 CFO Pay | CFO as % of CEO Pay | |||||||
| Real Estate | $3,362,145 | $1,295,864 | 38.5% | ||||||
| Technology | $3,071,777 | $1,164,021 | 37.9% | ||||||
| Energy | $2,907,491 | $1,104,603 | 37.9% | ||||||
| Financial Services-Nonbanking | $2,166,123 | $741,711 | 34.2% | ||||||
| Manufacturing | $2,047,168 | $856,560 | 41.8% | ||||||
| Health Care | $2,028,241 | $944,861 | 46.6% | ||||||
| Retail | $1,876,251 | $673,980 | 35.9% | ||||||
| Financial Services-Banking | $1,037,685 | $442,425 | 42.6% | ||||||
| AVERAGE | $2,338,874 | $927,743 | 39.6% |
About BDO
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 40 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multinational clients through a global network of 1,082 offices in 119 countries.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.
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