For those CEOs and HR folks who rely on salary surveys to help determine the right range of base and bonus pay for a new CFO hire…or for candidates who are looking for the right CFO compensation offer, consider the following.

Salary surveys are notoriously outdated and generally don’t reflect the current market. Most surveys use data that’s at least two years old by the time it’s printed or available on-line. If unemployment decreased in the subsequent months, which it certainly has in our current environment, there is upward market pressure on compensation. I know some of the government data on the lowest paid workers in our economy doesn’t reflect this trend, but for executives, there has been real wage gain in the last few years.

The Value of the Right Executive Search Partner

It’s one thing to look to a salary guide; even the best are only OK. But if you are using the right retained executive search consultant who understands the market and your value, shouldn’t you expect to be in the top quartile when you get to the offer stage?

I had an interesting call last week about this question with a CFO. She wanted to know what the current going rate is for someone with her abilities. I gave her some real examples of actual offers (client/candidate names removed of course!) presented to CFOs whom we’ve placed in the last 12 months. She was at first a bit surprised. Then, as if a bolt of lightning struck, it became clear to her that the salary data for CFOs we’ve placed shows they are consistently in the top quartile of the available salary survey range. Why? Because our clients want the top tier candidates through our search services, not the 50 percentile candidates. And we deliver!

The CFO Compensation Equation: Cost vs. Value

If our clients are hiring the very best, then they should expect the CFO’s performance to reflect that premium, right? Our placed CFOs, who are in the 90th percentile salary, have created over $10B in value in the last nine years. This far outstrips the minuscule difference between the 50th and the 90th percentile salary. In case after case, our client CEOs appreciate our ability to find CFOs who outshine their peers by not only running a tight ship, but helping to drive revenue and margin growth by innovating sales programs, and being personally involved in customer negotiations. We consistently take on client assignments that result in direct contributions by the CFO to growth, profitability and increased enterprise value.

A CFO’s Pay is Only One Measure

Of course most CFOs are only partially motivated by their annual cash compensation. Their pay needs to be in the ball park, but it’s usually not the primary driver to acceptance. (Although in a recent placement, the base pay changed upward by $50K from the initial offer to the accepted final offer.) When we think about what would motivate a CFO to make a change, the same considerations seem to come back time and again: The CEO relationship/reputation/personality, the ability for the CFO to make an impact and believe in the business, and pay is usually the third leg of the stool.

Finding the Top Tier

It’s not easy to find the best of the best, but when it comes down to it, the value a really great CFO delivers far outweighs the difference in hiring downstream, or the fee for service with the right search partner. If you want in on getting the right CFO compensation or finding a CFO that fits your company, contact me at or call 408-205-7373. You can also see some of the companies we’ve placed CFOs on our CFO Placements page.