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Fei 2013 compensation survey

Nov 01, 2014

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  • 1. Financial executivecompensation survey 2013SPONSORED BY GRANT THORNTON
  • 2. Contents 1 Executive summary3 Survey participant information 4 Overall survey findings 6 Public and private company comparisons6 Overview8 Corporate CFO11 Corporate controller14 VP finance17 Director level19 Chief accounting officer21 Treasurer23 Divisional/geographic/regional CFO25 Appendix: Job descriptions31 About the authors32 About Grant Thornton and Financial Executives Research Foundation Inc.AuthorsThomas Thompson Jr.Senior associate, researchFinancial Executives Research Foundation Inc.Ken Cameron, PHRDirectorGrant Thornton LLPEddie Adkins, CPAPartnerGrant Thornton LLP
  • 3. Financial executive compensation survey 1How does your total compensation package and that of yourstaff stack up against your peers compensation? This researchstudy aims to answer that question by presenting the resultsof our seventh annual survey of financial executives regardingtheir salaries, bonuses, long-term incentives and retirementbenefits. As in years past, the survey was completed bysenior financial executives rather than by human resources orexecutive search firm executives. This years survey included a total of 554 responses.Manufacturing was the most represented industry sameas in last years survey. Following the trend in recent yearssurveys, the percentage of responses from private companiesincreased slightly, to 65% in 2013 from 63% in 2012, whilethose from public companies decreased slightly, from 30%in 2012 to 29% in 2013. As in past years, average revenue forpublic company participants was higher than that of the privatecompany participants.CompensationThe table below compares the base salaries of several differentpositions by title and company type. For those individuals who indicated an increase, theestimated average salary increase for all respondents was 3%versus 4% last year. For public companies, the average salaryincrease was 3.5%, and for private companies the averagesalary increase was 3.1%. Just 22% of respondents receive a long-term cashincentive based on other calculations, phantom shares orphantom equity rights or sometimes in the form of deferredcompensation. This represents a small decrease from 2012,when 26% of respondents received this type of benefit. Even though less than one-quarter of respondents reportreceiving a long-term cash incentive, nearly half (46%) receivesome form of stock-based incentive compensation, with stockoptions (12%) being the most frequently cited.For public companies, the average salaryincrease was 3.5%, and for private companiesthe average salary increase was 3.1%.Executive summaryPublic and private company comparisonAverage base salary by title all responsesCorporate CFO $248,900$201,700Corporate controller $207,200$145,400Vice president (VP) $208,900nance $166,900Director level $159,300$141,500Chief accounting ofcer $259,400$207,000Treasurer $259,600$233,500Divisional/geographic/ $175,000regional CFO $192,300PublicPrivate0 50000 100000 150000 200000 250000 300000
  • 4. 2 Financial executive compensation surveyBenefits and perquisitesConsistent with last years results, the average employer-defined contribution match is 4% for both public andprivate companies. Almost three-quarters (74%) of the respondentscompanies do not offer a defined benefit plan. For thosecompanies that do still offer a defined benefit plan, more thanhalf (57%) are open to new hires. One-fifth (20%) are frozenwith no further benefit accruals. Eighty-two percent of executives reported receiving oneor more perquisites. In the majority of cases (67%), thoseperquisites have not been reduced in the last year. Similar toprior years, a cellphone, cellphone allowance or cellphonereimbursement is still the most popular perquisite (77%). Nearly half (49%) of the respondents employers do notcover total health care costs the employee must contribute aportion of the total costs. For those companies that do, a littlemore than one-third (34%) cover employee and family costs.Other findingsMost respondents (63%) are not covered by an employmentcontract. For those executives that are, the most commonelement is change-in-control severance (26%), followed byseverance based on number of months (25%). New to this years survey, the average executive has heldtheir current position for at least five years. This years surveyalso found that executives saw a moderate increase in thenumber of employees related to their job responsibilities, from135 in 2012 to 152 in 2013. The average for public companieswas 265; for private companies, it was 109. Consistent with last years results, for those executiveswho are eligible for long-term incentives (cash, stock-basedor other), the most common measure for determining payoutswas base salary level (66%), followed by more specificcompany performance measures such as goals and objectives(41%) and discretionary (36%). The use of EBITDA as aperformance measure (30%) has also continued to increase. Identical to last years results, the majority of respondents(56%) indicated a masters degree as the highest level ofeducation completed. In addition, most respondents (79%)were male. Detailed figures for base salary, bonuses, long-term andstock-based compensation, retirement benefits and perquisites areprovided by title, company type and size in the following pages.Accessing survey data onlineAs in years past, all survey results are also available onlinethrough PayCheck, FEIs online compensation benchmarkingtool. Responses can be searched based on all criteria, includingtitle, industry, company type, company location, companyannual revenue, base salary and annual bonus opportunity.PayCheck is available by clicking on the research tab on theFEI website: www.financialexecutives.org.
  • 5. Financial executive compensation survey 3Data used in the compilation of this research report wascollected from responses received from a survey, sent viaemail to active FEI members in November and December2012 and January 2013. An active or executive FEI memberis defined as an individual currently holding a position as afinancial executive at an organization. A total of 549 memberscompleted the 36-question survey. A profile of respondentsfollows. Note that totals throughout the report may vary,because not every respondent answered every question. Compared with last years survey results, the percentageof responses from private company executives and nonprofitexecutives increased slightly, while those from public companyexecutives decreased slightly. This year there were noresponses from government executives. Consistent with the previous six years, the most heavilyrepresented industry was manufacturing, with 26% in 2013. Aswas the case in the last five years, the most responses came frommembers employed by companies with corporate headquarterslocated in either California or Texas, with 13% each.Survey participant informationRespondent profile Number of responses by company typeTitle Public Private Nonprofit TotalCorporate CFO 31 190 16 237 43%Corporate controller 20 41 1 62 11%VP finance 22 46 7 75 14%Director (of finance, accounting) 25 26 1 52 9%Treasurer 8 6 2 16 3%Chief accounting officer 9 9 0 18 3%Divisional/geographic/regional CFO 8 9 0 17 3%Divisional/geographic/regional controller 6 2 0 8 1%Manager (of finance, accounting) 8 5 0 13 2%Chief operating officer (COO) 1 8 2 11 2%Assistant controller 3 0 0 3 1%Managing director 1 1 0 2 0%Chief tax officer/VP tax 3 0 0 3 1%Chief auditor/VP internal audit 8 1 0 9 2%Chief business officer 0 1 0 1 0%Chief administrative officer 0 2 0 2 0%Corporate president and/or CEO 0 2 0 2 0%Assistant treasurer 4 1 0 5 1%Consultant 1 2 0 3 1%VP strategic planning and business development 1 3 1 5 1%Partner 0 1 0 1 0%Principal 0 1 1 2 0%Chief risk officer/VP risk and audit services 1 1 0 2 0%Independent board director or trustee 0 0 0 0 0%Divisional president 0 0 0 0 0%Business owner 0 0 0 0 0%General manager 0 0 0 0 0%Chief compliance officer 0 0 0 0 0%Grand total 160 358 31 549 100%29% 65% 6% 100%
  • 6. 4 Financial executive compensation surveySalary increasesThe number of executives who received a salary increasedecreased slightly to 72% in 2013, down from 74% in 2012.This years 72% remains significantly higher than the surveysall-time low in 2010, when only 43% reported receiving anannual salary increase. The average overall dollar amountof this recent salary increase was $5,997. In addition to basesalary, for those respondents that reported receiving an annualbonus, they received an average annual bonus was $52,093.Long-term incentivesOnly 22% receive a long-term cash incentive, based onother calculations, phantom shares or phantom equityrights or sometimes in the form of deferred compensation.However, 46% receive some form of stock-based incentivecompensation. A breakdown of the types of awards follows(respondents were able to choose all that apply).Overall survey findingsBenefits and perquisitesConsistent with last years results, the average employer-defined contribution match is 4% for both public andprivate companies. Almost three-quarters (74%) of the respondentscompanies do not offer a defined benefit plan. For thosecompanies that do still offer a defined benefit plan, more thanhalf (57%) are open to new hires. One-fifth (20%) are frozenwith no further benefit accruals. The percentage of executives that report receiving atleast one or more perquisites remains fairly consistent withprior years. A breakout of the