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What It Takes to Become a CFO
Many CFOs have a decade or more of relevant work experience and often have a Master in Business Administration (MBA). In many cases, a CFO will also be a certified public accountant (CPA). Generally, CFOs have held previous positions such as controller or director of finance. Some may have worked in accounting departments.
Per Salary.com, roughly half of CFOs have a master’s degree, while 45% have a bachelors’ degree. Meanwhile, just 2% have a doctorate or associate’s degree, and only 1% of CFOs have only a high school diploma. In terms of salary, there is not much differentiation between a CFO with bachelor’s or master’s degrees.
At the top of the proverbial food chain, in the corporate world, is the chief executive officer (CEO). The CFO generally reports directly to the CEO and the board of directors. The average CEO makes $771,165 per year, plus bonuses and benefits.
The CFO is generally responsible for all budgeting, financial goal setting, and related financial reporting—including financial statement construction and review. Arguably, there has always been a need for CFOs, however, the position really only came about in the 1960s. This comes as companies’ finances, accounting, and bookkeeping have become more complicated.
The Bureau of Labor Statistics estimates that the number of top executive jobs will grow by 4% from 2019 to 2029. The business of being a CFO will likely change a lot over the next decade, including navigating the rise of cybersecurity and the advancement of technology.
As well, the CFO position will see increased demand when it comes to regulatory compliance. This includes managing risks, whether it be taking risks or protecting against disruption.
Overall, CFOs will not only be managing finances and overseeing banking relationships, but they’ll also need to be able to manage big data—embracing artificial intelligence and data analytics.
Examples of a CFO Salary
CFO salaries depend on a number of variables, including geographic location, the size of the company, the candidate’s degrees and experience, and the type of industry. Here are some examples from public companies:
Apple CFO Luca Maestri earns an annual salary of $1 million according to executive compensation tables in the company’s public filings with the Securities and Exchange Commission. The majority of Maestri’s compensation is in the form of stock incentives, which were worth over $21 million in 2020. His total compensation for 2020, including retirement benefits and other compensation, was worth $26,253,270.
Microsoft CFO Amy Hood earned a salary of $975,000 in 2020, according to the company’s public filings. In addition, she earned $14,792,679 in stock incentives and $3,734,981 in non-equity compensation. Altogether, her total compensation in 2020 was worth $19,626,234.
CFO Salary FAQs
What Is the Salary of a Hedge Fund CFO?
According to ZipRecruiter, the average salary of a Hedge Fund CFO is $120,303. This figure may not include bonuses, incentives, or other compensation.
What Is the Average Salary for a CFO Working for a Non-Profit?
According to ZipRecruiter, the average salary for a non-profit CFO is $133,576, based on job postings and third-party data. This may not include other forms of compensation.
What Is the Average CFO Salary in the Healthcare Industry?
The average salary for CFOs in the healthcare industry is $154,399 in 2021, according to ZipRecruiter. This does not include stock options, bonuses, or other forms of compensation.
What Is the Average CFO Salary in the Banking Industry?
The average CFO Salary in the banking industry was $133,879 in 2021, according to Ziprecruiter. This does not include bonuses, options, or other compensation. These figures were derived from online job postings and third-party data sources.
The Bottom Line
The chief financial officer is an important executive in major companies. CFO salaries vary widely, according to their experience, industry, and the location of the company. In addition, many CFOs take the majority of their compensation in stock options, bonuses, or other variable compensation.
View more information: https://www.investopedia.com/ask/answers/010915/whats-average-salary-chief-financial-officer-cfo.asp