Equilar® Finds S&P 500 CFO Pay Up 5.2% to $2.9 Million
For Release: May 29, 2008
Redwood Shores, Calif. - Equilar, the market leader for executive compensation benchmarking solutions, today published an analysis of CFO compensation trends. The study, covering 313 S&P 500 chief financial officers in place for at least two years, finds that median CFO pay increased by 5.2 percent from 2006 to 2007.
Overall CFO pay levels increased despite a 3.4 percent downturn in median bonus payouts, but were buoyed by an 8.2 percent increase in median total equity compensation.
In a similar, although not directly comparable study conducted in April, Equilar found that median CEO compensation increased by 1.3 percent from 2006 to 2007. The fact that median CFO compensation appears to be rising faster than median CEO compensation may indicate increased prominence for CFOs in the executive suite. Additional findings are presented below:
Total Compensation
From 2006 to 2007, median compensation for S&P 500 CFOs in place for at least two years increased by 5.2 percent, rising to $2,894,275. In 2006, median pay for the same group of executives was $2,752,027.
Total compensation includes base salary, discretionary bonuses, non-equity incentive plan payouts, the grant date value of stock and option awards, and other compensation. Stock awards include service-based and performance-based awards. Option awards include service-based awards, performance-based awards and stock appreciation rights (SARs). Other compensation typically includes benefits and perquisites.
Base Salary
From 2006 to 2007, the median base salary for S&P 500 CFOs increased by 9.1 percent, rising from $481,250 to $525,000.
Aggregate Bonuses
In 2007, S&P 500 CFOs received a median aggregate bonus of $576,880, down 3.4 percent from the median of $597,263 reported in 2006. Additionally, the prevalence of CFOs receiving any form of bonus compensation fell from 99.0 percent in 2006 to 93.6 percent in 2007.
Aggregate bonuses include discretionary awards, short-term non-equity incentive plan payouts (annual cash bonuses) and long-term non-equity incentive plan payouts (multi-year cash bonuses). For companies disclosing two consecutive years of compensation data under the new SEC disclosure rules, the following sections provide detailed information on all types of bonus payouts:
Discretionary Bonuses
Among S&P 500 CFOs receiving discretionary bonuses, the median value of payouts fell by 2.7 percent from 2006 to 2007. Similarly, the prevalence of discretionary payouts declined from 29.7 percent in 2006 to 26.2 percent in 2007. The median value of discretionary bonuses for 2007 was $329,563, versus $338,603 in 2006.
Annual Cash Bonuses
In 2007, S&P 500 CFOs received a median annual cash bonus of $455,571. This amount was 2.0 percent less than the median annual cash bonus of $465,000 in 2006. Annual cash bonuses represent payouts which are tied to short-term performance goals. Additionally, the prevalence of annual cash bonuses fell from 83.7 percent in 2006 to 79.6 percent in 2007.
Long-Term Cash Bonuses
Among S&P 500 chief financial officers participating in long-term incentive plans, the median value of long-term cash bonus payouts rose by 16.7 percent from 2006 to 2007, climbing to a median of $455,571 in 2007, versus $390,229 in 2006. However, the prevalence of long-term cash bonuses declined, moving from 15.7 percent in 2006 to 14.4 percent in 2007. Long-term cash bonuses represent payouts which are tied to long-term performance goals, typically covering a three to five year period.
Total Equity Compensation
From 2006 to 2007, the total value of equity awards for S&P 500 CFOs increased by 8.2 percent, rising from a median of $1,408,804 in 2006 to a median of $1,523,810 in 2007. The prevalence of CFOs receiving equity grants was nearly flat, falling slightly from 95.8 percent in 2006 to 95.5 percent in 2007.
Stock Awards
In 2007, CFOs at S&P 500 companies received stock awards with a median value of $785,970 an increase of 16.1 percent over the median grant of $676,807 in 2006. Furthermore, the prevalence of CFOs receiving stock awards increased from 79.9 percent to 82.7 percent. Stock awards include grants with service-based and/or performance-based vesting criteria.
Option Awards
Contrary to trends observed for chief executives, from 2006 to 2007, the median value of S&P 500 CFO option awards increased by 7.0 percent. In 2007, the median CFO option award had an estimated grant date value of $651,061, versus a median of $608,196 in 2006. The prevalence of option awards fell however, dropping from 77.6 percent in 2006 to 75.1 percent in 2007.
Other Compensation
The median value of other compensation for S&P 500 CFOs was $63,152 in 2007, a 9.1 percent increase over the median of $57,890 in 2006.
Accumulated Pension Benefits
In 2007, for companies with consecutive years of data under the new SEC disclosure rules, the median value of accumulated pension benefits for S&P 500 CFOs was $1,061,198, an increase of 17.7 percent over the median of $901,524 in 2006. The prevalence of CFOs with accumulated pension benefits increased minimally from 67.1 percent in 2006 to 67.4 percent in 2007.
Deferred Compensation
For companies with consecutive years of data under the new SEC disclosure rules, the median value of deferred compensation plan balances increased by 21.3 percent from 2006 to 2007, climbing to a median value of $779,388. The prevalence of CFOs with deferred compensation balances increased from 73.8 percent in 2006 to 75.4 percent in 2007.
To learn more about these findings, please visit www.equilar.com or call (877) 441-6090.
About Equilar, Inc. (www.equilar.com)
Equilar, a NASDAQ strategic alliance partner, is the market leader for benchmarking executive and director compensation. Equilar enables corporations, consulting firms, law firms, investors, individual executives, and members of the media to accurately compare pay packages across public companies using SEC data. Equilar's products include an award-winning suite of online tools for analyzing compensation and corporate governance trends and independent custom research services. Equilar's research is frequently featured in Bloomberg, BusinessWeek, CNBC, The Financial Times, Fortune, The New York Times, Reuters, The Wall Street Journal and other leading media publications. Equilar is based in Redwood Shores, CA and was recently recognized by Inc. magazine as one of the fastest growing businesses in America.
Media Contact
Alexander Cwirko-Godycki
(650) 286-4567
press@equilar.com
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