There's good reason why CFO pay is rising.

• Author: Cunningham, Colleen
• Position: Chief financial officers

I sat down to lunch with someone recently who immediately launched into a discussion on the recent trend of rising CFO salaries. "Why are CFOs demanding so much money? Why are they so greedy?"

Perhaps you have been under a rock for the last few years. Maybe you haven't heard about the increasing demands as a result of regulatory scrutiny (SOX aren't just on your feet!). Or the increased need for finding operational efficiencies to compete internationally (China isn't just something you eat off!). Or the pressures of managing increasing demands for transparency and disclosure of future operating trends, as well as fair values of assets and liabilities with no market, in an environment where the plaintiff's bar is searching for every "wrong" prediction or estimate, ready with a lawsuit. (A bar isn't just a watering hole!)

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Or the increased difficulty of implementing accounting standards based in academic theory but completely un-implementable (OK--I ran out of witty quips!) Or the fact that the chief operating officer (COO) position is trending downwards, with the CFO taking on many of the COO's responsibilities. Or the amount of time that CFOs spend updating the board of directors and senior management on compliance issues, while at the same time keeping all of their traditional responsibilities with the investment community, managing the company's capital and liquidity needs and certifying the financial statements.

I like to think that the CFO's salary is undergoing "deferred maintenance." It's similar to the refrain we often hear from others regarding the cost of implementing Sarbanes-Oxley Section 404. Over the last five years or so, the CFO role has expanded significantly. It kind of crept up on us, something like that story of the frog that sits in a pot of water and ends up slowly boiling to death.

Many Skills Are in Play

CFOs must not only be financially savvy and serve as the company's corporate conscience, but also have operational experience and stellar leadership and communication skills. CFOs are thinking more like general managers and still have to deal with the day-to-day demands of the finance function.

Technology continues to be the enabler for the transition in which financial executives are spending less time worrying that the numbers are right and...