What Is A Chief Financial Officer? CFO Role Explained

CFOs have generally held previous positions such as controller or director of finance. The job perks can vary but can include a company car or driver, a hefty severance package (known as a golden parachute), relocation expenses, the use of a private jet or helicopter, and first-class flights. While healthcare is a typical perk, high-level executives such as CFOs have access to disability and life insurance.

What Is a Chief Financial Officer? How to Become One, Salary, Skills.

Chief Financial Officer is responsible for developing an organization’s overall financial policies. Provides strategic direction of all financial functions including accounting, budget, credit, insurance, tax, and treasury. Being a Chief Financial Officer ensures that proper financial controls are in place and that financial transactions support the overall business strategy while conforming with applicable laws and regulations. Additionally, Chief Financial Officer may require the Certified Public Accountant (CPA) credential.

Career Spotlight: John Pokorney, CFO

In many companies, particularly publicly traded ones, a portion of the CFO’s salary may be tied to the company’s financial performance. Furthermore, the CFO’s impact on a larger organization’s financial health and strategic direction is more pronounced, justifying higher compensation levels. For medium-sized companies with revenue between $50 million and $1 billion, the salary range typically falls between $170,000 and $450,000. A chief financial officer usually has a bachelor’s degree in accounting, finance, economics, or a related field.

Average Salary

Chief financial officers oversee the financial operations and activities of a company or organization. They develop and implement financial plans, assess financial data, and report on finances to colleagues, investors, and regulatory bodies, as needed. Businesses in California employed nearly 34,000 top executives as of May 2021, with annual mean wages approaching $231,000. Top executives in Illinois earned higher mean wages of over $244,000 but only 8,500 positions were available in the state in May 2021. Personal CFOs provide planning guidance to companies of all sizes in contrast to a corporate CFO in a large enterprise. They work closely with the accounting team, zeroing in on the details of a company’s financial needs.

CFO Salary Trends and Future Outlook

The Chief Financial Officer (CFO) plays a critical role in the strategic and financial management of an organization. Large companies with revenue over $1 billion tend to offer the highest salaries, with the average CFO salary often exceeding $500,000. For companies that have raised less than $1 million, it is common for CFOs to be granted equity ranging from 1% to over 4%.

Many start-ups, indeed, now hire a chief financial officer when they first start raising capital. While the job is often seen as a step towards becoming a CEO, the latter role is the one where the buck truly stops, with the CEO responsible for the organization’s entire operations. The position of CFO shouldn’t be confused with that of financial controller, with the latter being focused less on financial strategy, and more on the cfo full form salary organization’s day-to-day financial operations.

1. While base salaries for CFOs are substantial, total compensation often includes bonuses and equity grants, particularly in startups.
2. This includes managing all aspects of financial and cash flow planning, as well as analyzing its financial position.
3. Base salary and bonuses make up roughly 80% of the total compensation a CFO should receive within a given year.
4. It’s important to consider the median base CFO salary when evaluating these numbers.
5. Equity compensation, such as stock options or restricted stock units (RSUs), may be less common or have a lower value.

Many also have advanced degrees beyond a bachelor’s degree and at least 10 years of experience in the financial field. The second highest-paying country for CFOs is Switzerland, where CFOs can expect to earn an average salary of about $314,000. These equity grants come with vesting schedules to incentivize long-term commitment and contribution to the company’s growth. For example, as of December 01, 2024, the average yearly salary of CFO in San Francisco, CA is $559,700 and in New York, NY, the average annual salary goes to $523,000. For example, as of December 01, 2024, the average yearly salary of CFO is $493,900 in California and in Massachusetts, the average annual salary goes to $487,200.