Much like other parts of the finance team, good talent in the CFO position is hard to find. Opportunities for change are rampant, demand for talent is high and roles that offer perks or flexibility are among the most coveted financial leadership positions. Outside of compensation, work-life balance, the ability to cross-collaborate, make decisions and have autonomy within their leadership role are key factors in making a CFO position worthwhile.
The demands and responsibilities of CFOs have grown in many organizations due to the unique combination of accounting expertise and financial acumen required to succeed as a finance chief. Consequently, their value in the marketplace has increased. This has resulted in an inverse relationship between compensation and tenure, at least among CFOs in publicly traded companies, according to newly compiled data from Datarails that analyzed SEC filings for 1,657 of the top listed U.S. companies from 2018 to 2023.
The findings, based on the most recently available figures, show CFOs continue to have the shortest tenure in the C-suite, averaging just 3.1 years (down from 3.5 years according to Datarails’ analysis two years ago) while receiving the highest year-over-year pay increases (9%) among leadership positions. CFO pay increases between 2022 and 2023 were more than double the average 4% bump.
However, this was the first increase since 2021, as data shows CFOs saw no increase between 2021 and 2022. The highest-paid CFOs in the U.S. during 2023 were Joe Berchtold of Live Nation, who earned $52.4 million while also holding the title of president; Michael J. Cavanagh of Comcast, who earned $41 million after being promoted to president in 2022; and John David Rainey of Walmart, who earned $40 million.
Among tenure rankings within the executive leadership group, CFOs again rank at the bottom. Over the past five years, CFOs trail CEOs (3.5 years) and chief marketing officers (3.9 years).
Tenure by industry
Data indicates that CFOs in the hotel and cruise industry and satellite companies have the highest tenure. Broadcasting (3.6 years), professional services (3.6 years) and the airline industry (3.5 years) were also among the industries with high tenures in 2023. Agriculture (2.7 years) and utilities (2.7 years) ranked at the bottom.
The highest average tenure in this report is four years, but it’s worth noting that previous research from CFO.com found some of the longest-tenured CFOs come from professional sports with CFOs in Major League Baseball often having tenures surpassing a decade. These roles, though extremely limited and come with significant perks and prestige, are not covered in Datarails’ findings since they are not publicly traded.
The hunt for greener grass
Among the companies included in this report, nearly half (48%) of U.S.-based firms experienced at least one CFO turnover in the past five years. Of the total sample, 22 companies had four CFOs, 152 had three and 771 had two during this period.
Jack in the Box exemplifies this high turnover with the fast-food chain going through five CFOs from 2018 to 2024. The company’s CFO carousel began in March 2018 with Lance Tucker, who exited in July 2020. Dawn Hooper, then the company’s controller, stepped into the role for eight months before Brian Scott was hired in August 2023. Scott was billed by the company as the ideal candidate to “guide us through our growth strategy while maximizing franchise profitability and long-term shareholder value.” However, Scott departed a year later (outside the timeframe of this analysis) leading Hooper to return as interim CFO and Tucker eventually brought back for a second stint.
Other companies with notable CFO turnover included Dollar General, eBay, Expedia, Guess, Pitney Bowes and Under Armour.
While the report does not disclose where all departing CFOs went, it highlights a growing trend: CFOs are increasingly the top candidates for open CEO roles. Among all internal CEO promotions analyzed for 2023, 15 of 16 were former CFOs.
