Businesses pursuing growth no longer want just a really good finance person. As they struggle with the challenges of volatility, risk, digitisation, customer centricity and diversity, they want CFOs who embrace broader strategic capabilities that will sustain their businesses in a complex environment.
“The role of the CFO is broader and completely different from ten years ago,” says Stephen Moir, the director of the Moir Group which specialises in the recruitment of accounting and finance professionals.
“A CFO needs to be a visible leader, not just running a finance operation. Businesses are looking for excellent communication skills ‚Äì the technicals are a given ‚Äì and those able to operate in a rapidly changing environment, which is the new normal.”
For the majority of CFOs who work for small to medium size businesses, possessing those skills will give them the edge in obtaining more satisfactory remuneration.
An examination of the online base salary guides of four leading recruitment firms ‚Äì Hudson, Hays, Robert Half and Robert Walters ‚Äì finds that CFOs and financial controllers can earn between $110,000 to $450,000 in Australia and $90,000 to $250,000 in New Zealand.
“The sectors that continue to pay the top dollars are financial services, banking, asset management and private equity,” says Robert Half’s senior managing director for Asia Pacific, David Jones. The base CFO salary range depends on the size of the company, the level of experience of the candidate, the location and industry sector.
“The base salary packages for less experienced CFOs can range between $190k-260k and up to $320k for more senior CFOs in mid-size businesses. Total packages vary and apart from potential bonuses they may contain short-term incentives that can range between 10 and 30 per cent, depending on the organisation.”
Including equity in a remuneration package is a lot more common than some years ago, in the experience of Ben Derwent, the managing director of Derwent Executive. Derwent handles CFO placement for public companies outside the ASX 200, private equity companies, subsidiaries of multi-nationals and large state-based organisations where base salaries are $350,000-$400,000. Equity and bonuses are typically tied to financial performance. A top CFO, displaying real leadership, will impact on the company’s performance and in some cases, bonuses amount to 75 per cent of the base salary.
Robert Walters’ salary range for banking and financial services topped $380,000 in Brisbane as companies focused on new business growth and improving customer engagement.
Compared with salaries in 2014, the Sydney market was mostly static because of more senior candidates. “There have been good quality CFOs on the market willing to take less which has brought down the average CFO salary,” explains Stella Petrou Concha, the co-founder of six year old REO Recruitment that specialises in accounting jobs and financial recruiting.
Melbourne’s hybrid market and the diversity of roles across property and construction, technology, financial services and health care have enabled some CFO salary increases. Salaries in Perth and Brisbane reflected the slowdown in mining, but this has enabled healthcare, not-for-profit, aged cared and state-based organisations to attract top talent where previously they were unable to compete with the salaries paid by the resources sector.
Property and Construction Lead CFO Demand
“The property and construction sectors are leading the demand for talented CFOs. We continue to see growth in CFO salaries across a number of sectors including property and construction, professional services, IT, health and life sciences organisations,” Jones said.
Where high salaries are reported ‚Äì around the $400,000 mark ‚Äì these are more the exception than the rule.
“You can get a good CFO for $200,000 but you have to be a damn good CFO to get $450,000,” Petrou Concha says. Those higher salaries reflect levels applied by subsidiaries of US and European companies with high turnovers.
For some small businesses, the cost of a full-time CFO can be prohibitive or not practical if there is insufficient work. Yet their owners recognise that the skills of an experienced CFO can be invaluable in assisting them to identify strategies for successful, sustained growth.
Firms like William Buck can provide ‚Äòvirtual’ CFO expertise on a temporary or permanent basis, showing business owners how and why their business is performing the way it is, often by taking a holistic approach to analysis.
The biggest risk for small businesses is when they have to grow. But the key challenges for them are cash flow, paying off debts and securing new leads. Hence, top practitioners must provide strategic leadership, including business plans, budgeting, cash flow forecasting and advice on capital sourcing, backed by solid communication skills.
Petrou Concha notes that small companies are often prepared to take CFOs on for 2-3 days a week to have access to their advisory skills. If such a CFO is able to service more than one client, a total annualised income of $350,000 to $450,000 is not inconceivable when a daily rate starts from at least $1000-$1250.
However CFOs are paid, one thing is clear: they cannot depend just on their financial skills for future success. The focus of a CFO is to provide strategic leadership, to think, operate and execute in a multi-dimensional manner. They require the ability to operate as quasi-COOs who are responsible for divisions outside of finance such as IT, procurement and operations. In the post-GFC world where businesses are restructuring, employers require more ROI from their leaders, which means that the ability to operate both up and down the value chain is more important than ever.