CFOs are making less than their C-level peers

A CFO's salary and bonus will average $553,900 this year, according to a compensation report from Holt Private Equity Consultants, MM&K and sister publication Buyouts.

CFOs are making less than their fellow investment professionals other C-level executives, according to a new compensation report – with CFOs salary and bonus averaging $553,900 annually for 2019.

While salary and bonus schemes for CFOs are lower than many of their peers, it’s not all bad news. “CFO candidates are becoming much more savvy when it comes to equity structure as a realization of the gold at the end of the rainbow,” says Barry Toren, head of CFO search practice at Korn Ferry. “Most of them will have the analytical mindset, and just understand the models better.”

For some, it could be the reward of adding enterprise value and being compensated for it directly. “Most people we’re recruiting for these kinds of opportunities are not looking at it as just collecting a paycheck and bonus,” says Toren.

The annual compensation report from Holt Private Equity Consultants, MM&K and sister publication Buyouts released the averages and percentiles for over 30 positions within the private equity and venture capital industries in North America. You can buy the report here and sign up to participate in next year’s study.

Spikes in fundraising this year have caused salaries, bonuses and carried interest distributions to grow steadily.

On the whole, private equity compensation is on the up, according to the report. “Indeed, the boom in fundraising that generates management fees, and dealmaking that generates deal fees, fueled a rapid rise in salary and bonus compensation for both partner and non-partner investment professionals at LBO/Growth Equity firms in 2018-19,” the report says.

“The previous few years have seen a rise in M&A and IPO activity, which in turn has led to a rise in exits for both buyout and venture capital funds. This increase is reflected in higher carried interest distributions across much of our survey samples.”