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Where Do CFOs Head for a Larger Paycheck?
Christophe Rosset, Page Executive’s MD for Continental Europe on CFO pay variations according to gender, region and age.
What do financial leaders around the world earn?
Overall, CFOs worldwide had a good year in 2014 with global bonuses averaging 17.6% of their total compensation package. Despite shareholder and public pressure to curb payouts and limit bonuses, companies worldwide clearly feel their employers are in a position to reward them well. However, Page Executive’s mandates across the world reflect a prevailing trend: financial leaders in the Middle East, the UK, Asia Pacific and North America show significant higher rates of confidence, a higher average salary and higher bonuses than elsewhere in the world. Continental Europe, still recovering from a bruising and restless economic situation, lies at the other end of the scale with an average annual salary of 114.7 K€ (compared to a global average of 125 K€) and 14.6% of overall compensation paid as a bonus.
Bonuses as a means of retention for top performers
More than ever, European companies are looking for ways to generate more business profits and have no inclination to hire CFOs who do not fully understand their business sector as a whole. A deeper look in the UK and European bonus trends show those very same companies will argue they need to award handsome bonuses to reward and keep their top talent, perhaps tempted to go east for better salaries. According to Page Executive’s global CFO Barometer, more than 40% of CFOs are ready to move to another country and 37% of them would even cross oceans for a bigger paycheck.
Within the banking and financial services sector, compensation tends to be higher than in other sectors of the economy. Despite a recent European ban on banks limiting to paying bonuses of no more than 100 pc of an employee’s annual salary, City financiers expect bonuses to rise, provoking sometimes controversy.
Salaries and bonuses play a big role in retaining financial leaders with a large part of our candidates confessing they’d leave their role for a higher salary elsewhere. But where to? According to our latest CFO Barometer’s highlights on Compensation & Benefits, the Middle East ranks first with an annual salary of 170.7 K€, followed by a City of London still at the top of the tree with an average yearly salary of 152.2 K€ and remaining the world’s highest-paying bonus centre.
The gender factor
But unlike the widening gap between haves and have nots, we notice women are increasing their share of managerial jobs. Even if in many countries the gap remains considerable, our study shows male financial leaders earn on average 16% more salary and 22% more bonus than their female counterparts, which represents a slight improvement compared to our 2012 CFO Barometer. This trend is confirmed by a number of organizations carrying out surveys on the progress of women in senior management positions. For example, the Grant Thornton International Business Report shows women increased their presence in the “C-suite” (management positions which have “chief” in their title), with Chief Finance Officers roles ranking first (31 per cent in 2013, up from 8 %). Clearly women financial leaders have not been able yet to break through the invisible glass ceiling preventing them from reaching their full potential in terms of salaries and bonuses. But periods of seismic change are always characterized by uncertainty which leads to a turning point. The future might set women financial leaders on a better path if they are to catch up with their male counterparts.