Mid-market firms paying up for new CFOs

With fewer people changing roles, compensation surges as firms try to entice finance pros to take new positions.

Mid-market PE firms are having a hard time hiring CFOs, as fewer finance pros look to change roles.

According to executive search firm Eastward Partners’ latest Strategic Finance Report, just 5 percent of CFOs have moved to new firms in the past 12 months. Those looking for a new position are most motivated by excellent compensation, a good work-life balance and communicative management, the report found.

Increased deal activity in 2021 and the start of 2022 has put pressure on firms to hire finance talent, the report said, but the limited availability of CFOs has led to higher salaries and substantial equity packages to entice them to take new opportunities. As a result, the average base salary for a private equity CFO within private equity is now $280,481. The average bonus is $194,789.

Brett Vecchio, associate partner and head of private equity at Eastward explained that typically, six to nine months post-acquisition, PE firms begin hiring as part of their growth strategy, and the finance function is key to growth and unlocking value from investments. But the problem for PE firms is that finding talent in this market is challenging, with job postings greatly exceeding available talent.

“This increased competition gives strategic finance professionals the ability to cherry-pick opportunities and sees the latest movers offered a significant increase across base salary and bonuses,” Vecchio observed.

The report said that firms are employing various strategies to hire finance professionals who are not currently looking for a new job, and are detailing appropriate compensation, and sharing the scope of the opportunity available.

While the hiring market is tough for CFOs, it’s a bit easier to find other finance pros, such as controllers and FP&A professionals, since these positions are relatively liquid, with an average of 17 percent of this talent pool changing jobs in the past 12 months.