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If the public is going to know one name from a company they don't work for, it's likely who the CEO is — but as
Chief financial officers, or CFOs, are on track to outpace CEOs on the salary front, with CFOs seeing nearly 2% higher salary increases than
"CFO pay is getting bigger and bigger, whereas the CEO pay is not," says Jeanne Branthover, head of financial service practice at DHR Global, a leadership advisory firm. "It seems the CFO role is becoming more and more important in today's economy as shareholders grow more worried. The CFO is someone who most people want to have confidence in."
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Employees, executives, shareholders and the public may start looking to CFOs for answers, so companies will have to work harder to ensure they are retaining this vital talent — that's where better pay comes in, explains Branthover. Notably, this is a trend she believes is here to stay for at least the next five to 10 years.
And given that CFOs know intimate information about a company's financial strengths and weaknesses, losing a CFO does not instill confidence in shareholders. Onboarding and offboarding a CFO can be a legal nightmare too, as companies try to ensure their information is safe. Keeping them happy is a critical part of a business's success.
Branthover also highlights that CEOs, who are often the face of their company, are under a lot more scrutiny than the rest of the C-suite, whether it's from shareholders worried about profit margins, or the public outcry about pay disparities between the CEO and average employees. Now more than ever, CEOs have to prove they are worth their pay, at least to shareholders, says Branthover.
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"When a CEO makes millions of dollars when the firm hasn't done well, we're seeing more pushback from the shareholders, and from everybody," she says. "Meanwhile, the CFO actually has the closest set of competencies to the CEO: they understand the organization's capabilities and what innovations will bring success, but they also understand costs."
Branthover underlines that the C-suite is also changing beyond the new emphasis on CFOs. Tech has transformed how everyone does their job, from chief technology officers to chief human resource officers, and not everyone is able to keep up. For example,10 years ago a CHRO was primarily a resource for onboarding talent and internal conflicts or misconduct. Now, a CHRO has access to tools and data that pulls their focus to retention strategies, notes Branthover.
"Recent turnover in many of these jobs is because companies that had the same person in a certain role for the last 10 years do not have the skill set to continue to grow with the company," says Branthover. "Everything is changing drastically."
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Similarly, CFOs have the technology to track and plan the company's future, alongside the knowledge to understand and build upon the data they're seeing. Branthover predicts companies will increasingly hire charismatic, outgoing CFOs to represent the company to the public. However, she advises employers to consider whether their prospective CFO has a long-term future in this position and is compatible with the company culture.
"You want to make sure that the person has the right skills, not only to fit the job today, but fit the job as the company grows," she says. "You don't want to have to replace this person in five years."
