Increases in the total compensation that financial executives receive, including salaries, incentives and benefits, may foretell a turning point in the country’s economic recovery, according to the results of a new survey by Grant Thornton LLP and the Financial Executives Research Foundation (FERF).
The eighth annual Financial Executive Compensation Survey reports the salaries, bonuses, long-term incentives and retirement benefits of CFOs, corporate controllers, treasurers and other financial executives in the United States among public and private companies.
In 2014, the average salary increase for financial executives at private companies is 3.3 percent, an increase from 3.1 percent in 2013. On the public company side, the rate of increase dipped slightly, to 3.4 percent from 3.5 percent a year ago. These numbers are slightly higher than overall salary increases in the marketplace, which are trending at 3 percent.
The growth rate in finance and accounting employees is also improving: At private companies with 250 to 499 employees, the number of finance and accounting employees increased to 8 percent in 2014 from 4 percent in 2013, and those with 500 to 999 employees report an increase in finance and accounting employees to 4 percent from 2 percent one year ago.
“Trends like stronger hiring rates and increases in salaries and stock-based incentives could gain momentum during the next few years,” said Ken Cameron, a director in Grant Thornton’s Compensation & Benefits Consulting practice. “It’s an ideal time for businesses to take a close look at their compensation structures. Companies that are well-positioned to attract, select and retain top financial executives will have a market advantage as the improved economy takes a firmer hold and expands, perhaps faster than many expect.”
“The results from this year’s survey are encouraging and reflect the improvements in the United States job market,” said Marie Hollein, president and CEO for Financial Executives International (FEI). “Financial executives serve a vital role within their organizations and it’s not surprising that companies are reinforcing their finance and accounting teams. Competitive compensation packages for the finance function will offer new opportunities for those in the profession and assure companies have the best talent.”
Other highlights of the report include:
- Of the 81 percent of executives who report receiving one or more perquisites, the most popular is a cellphone, cellphone allowance or cellphone reimbursement (85 percent);
- The majority (90 percent) of those receiving perquisites report that those perquisites have not been reduced in the past year; and
- Nearly half (48 percent) of financial executives receive some form of stock-based incentive compensation, with respondents citing stock options and restricted stock/stock units (21 percent) most often.
The data for the Financial Executive Compensation Survey was compiled from responses received from a 31-question survey sent via email to active members of FEI between November 2013 and January 2014, with 490 members completing the survey. An active or executive FEI member is defined as an individual currently holding a position as a financial executive at an organization.
The full Financial Executive Compensation Survey results are available online.