Strong Corporate Performance Results in CFO Pay Increases

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Sept. 16 — Chief financial officers of large U.S. employers saw their compensation increase by 7 percent in 2013, to a median of $3.1 million, according to a study by the consulting firm Mercer LLC.

Analysis of CFO pay at 491 companies in the Standard & Poor's 500 index from 2011 to 2013 found the results reflect strong corporate profitability in 2012 and 2013, Mercer said in the study, “S&P 500 2013 CFO Compensation,” released Sept. 16.

The components of total direct compensation—base salary and short- and long-term incentives—have remained stable for CFOs, the study said. That could change over time, if CFO pay begins to receive the scrutiny now given to chief executive officer pay, Stephen Mork, a partner with Mercer's executive rewards practice, said in a news release.

“As a consequence, the pay structures for the two executives will become more closely aligned,” he said. “Specifically, the portion of CFO pay allocated for base salary will shrink and the portion allocated for long-term incentives will grow,” he said.

CFOs' annual cash compensation increased 6 percent, base salaries rose 3 percent and short-term incentive payouts were up 6 percent in 2013, the study said. In terms of dollars, the cash component at the median was $600,000 and the short-term incentives paid out at $651,000 at the median, the study said. Because of the strong market, the short-term payouts represented a 13 percent premium over target incentive levels, Mercer said. Median target levels for short-term incentives were $530,000 in 2013, the study said.

The study said the grant date present value of long-term incentives for CFOs grew to a median of $1.8 million in 2013, with performance shares or performance cash awards offered to 45 percent of all CFOs in the survey.

The S&P 500 2013 CFO Compensation study is at The news release is at

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