How does your pay stack up?

• Author: Hughes, James V.
• Position: Compensation of financial executives

If you've ever wondered whether you're earning the same amount as your peers, check out the results of this extensive new survey that features data on the CFO, treasurer and controller.

Financial Executives Institute and Arthur Andersen recently partnered to bring FEI members a comprehensive report on executive compensation. Data was compiled from more than 400 companies on numerous compensation components, including base salary, annual incentives, long-term incentives, benefits and perquisites for 3,500 executives in 24 executive positions. Featured here are highlights for the CFO, treasurer and controller positions. For illustrative purposes, the values of compensation elements have been calculated using derived averages for these three positions.

Survey population. The companies included in the report represent a broad group of industries and regions within the United States. The survey population provides a good representation of both public-sector (42 percent) and private-sector (50 percent) employers, as well as manufacturing (43 percent) and nonmanufacturing (44 percent) organizations. The data is divided into 31 industry classifications, four organizational structures (public, private, governmental and nonprofit), six regions and a variety of sizes (revenues for nonfinancial companies and assets for financial companies). For the CFO, treasurer and controller positions, more than 375,109 and 300, responses, respectively, were analyzed on base salary, annual incentives, long-term incentives, benefits and perquisites.

Base salary. Base salary is a standard part of any compensation package, but levels of pay and administration of the programs differ significantly from one company to another. For instance, CFOs ranged in 1996 from $102,300 at the 25th percentile to $200,000 at the 75th percentile. Treasurers ranged from $95,000 at the 25th percentile to $158,000 at the 75th. Controllers earned from $65,000 at the 25th percentile to $123,000 at the 75th percentile.

In terms of program administration, the majority of companies (67 percent) base increase decisions on merit, while 23 percent use a combination of merit and cost of living. Only 3 percent of respondents say they rely solely on changes in the cost of living to determine increases. The average salary increase between 1995 and 1996 was 7 percent for both CFOs and controllers; treasurers received an average increase of 6 percent.

Annual incentives. Designed to motivate and reward...