Chief financial officers continue to experience a downward decline in tenure and maintain the lowest level of job security in the C-suite, even though their pay has been rising, according to a new study.
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That average of 3.1 years for CFO compares unfavorably to chief technology officer (4.3 years), general counsel (4.2 years), chief marketing officer (4.0 years) and CEO (3.9 years) based on complete 2023 data.
Datarails analyzed SEC filings by 1,657 of the biggest U.S.-listed companies between 2018 to 2023, the latest period for which official data exists, examining CFO tenure and compensation mandated by the Securities and Exchange Commission in annual filings. Nearly half (48%) of the listed U.S. companies have experienced at least one CFO turnover in this latest five-year period, according to the analysis.
On the positive side, the study found CFO pay rose an average of 9% over the past year, reaching an average of $3.8 million among the listed companies in 2023 (comprising salary, bonuses, stock awards and options). Those who scored the biggest pay days among the large sample included LiveNation Entertainment CFO Joe Berchtold, whose total annual compensation amounts to $52 million, Comcast CFO Michael J. Cavanagh ($40.5 million) and Walmart CFO John David Rainey ($40 million).
Beyond the perks and high pay, the CFO post remains the surest way to become CEO. Of the sample companies, 15 finance chiefs among the 1,657 companies got promoted to CEO in 2023. All of them were men.
"The modern CFO role has become corporate America's ultimate high-wire act — shorter tenures but bigger paydays," said Datarails CEO and co-founder Didi Gurfinkel in a statement Tuesday. "The CFO seat is increasingly becoming less of a destination and more of a crucible as evidenced by finance chiefs ascending to the role of CEO. This paradox signals a fundamental shift in corporate leadership — where CFOs who can produce value creation in an atmosphere of volatility are seeing long-term rewards and opportunities."
In many cases, the job of CFO was effectively a revolving door, with 22 publicly listed companies churning through four CFOs in five years (2018 to 2023). Those companies included Apogee Enterprises, Calavo Growers, Cardinal Health, Gulfport Energy, Papa John's International, ATKO Group and Vontier. Apogee Enterprises, a glass designer for buildings such as the U.S. Bank Stadium and Capella Tower, appointed Nisheet Gupta as CFO in May 2020, after longtime CFO James Porter CFO retired. By July 2022, Gupta announced his resignation, with a new CFO, Mark Augdahl, named as interim CFO. By March 2023, Augdal was on his way out, and Matthew James Osberg was appointed CFO.
In addition, 152 companies had three CFOs, including prominent brands such as Dollar General, eBay, Expedia, Guess, Jack in the Box, Pitney Bowes and Under Armor.
