Most large businesses have an executive team that oversees the company operations. This team typically includes multiple individuals including a chief financial officer (CFO), who is the person in charge of the company’s financial management. The CFO salary potential is high. Most CFOs earn well over six figures and are some of the highest paid executives in any company.
A chief financial officer is a person responsible for overseeing all the financial operations of a company. While the CFO key role is to manage the company’s finances as responsibly as possible and ultimately save money, more specifically, CFOs lead all accounting and finance operations to ensure both efficiency and compliance with all rules and regulations, both internal and external.
A CFO's responsibilities generally fall into several categories that include planning, operations, communication and reporting, risk management, funding and third-party management. For example, the CFO develops the overall financial strategy for the company, ensuring that it aligns with the overall mission and goals of the organization. This strategic development includes creating and overseeing processes for budgeting and capital spending, creating tax strategies, and determining benchmarks and key performance indicators for monitoring progress. The CFO oversees all financial operations as well, including issuing all financial reports, and works to reduce the company’s exposure to risk. Depending on the company, the CFO also manages investments and pension funds and oversees the company’s debt.
Because a CFO is part of the executive leadership team, employers expect individuals to have education and experience that has prepared them to take on the role. Most companies expect the CFO to have a bachelor’s degree in a field such as business administration, accounting, finance or economics, as well as a master’s degree. The highest paid CFOs earn an MBA, with law degrees and master’s degrees in economics or accounting also leading to high salaries. Some CFOs found their way into the C-suite with a bachelor’s degree in science or the liberal arts, but the majority also earned an advanced degree in business or finance.
In addition to the degree requirements, some companies look for CFO candidates who hold additional certifications, such as the Certified Public Accountant or Certified Management Accountant designations. Experience is also important; most CFOs have at least 10 years of progressive responsibility in the finance or business field.
CFOs work across all industries and occupations, from health care and manufacturing to nonprofits and educational institutions. The work is demanding; the Bureau of Labor Statistics estimates more than half of all top executives worked more than 40 hours per week, including on evenings and weekends. A CFO is often responsible for the overall financial performance of the company, and failing to meet projections or otherwise poor performance could put continued employment in jeopardy.
Years of Experience and Salary
The average chief financial officer salary is $128,090 plus commissions, bonuses and profit sharing, which adds an average of just over $40,000 to their earnings. Pay increases consistently with experience. One potential CFO salary range looks like this:
- 0-5 years: $94,000
- 5-10 years: $112,000
- 10-20 years: $144,000
- 20+ years: $155,000
CFOs generally enjoy generous benefit plans as well. Most employers offer health benefits, including dental and vision, retirement plans and paid time off, while others also offer profit sharing, tuition assistance, use of a company car and other perks.
Job Growth Trend
The Bureau of Labor Statistics projects that overall job growth for top executives, which includes chief financial officers, to be at about 8 percent between now and 2026. However, growth among financial managers will be around 19 percent as more companies focus on risk management and cash management. Actual growth in these jobs depends largely on the growth within specific industries, but in all cases, competition for these jobs will be fierce.