The CFO role (and paycheck) doesn’t look how it used to

The pay gap between CEOs and their C-suite counterparts is narrowing. In 2022, the average base salary increase for CEOs was 4.4%. Meanwhile, CFOs received a median pay raise of 5.5%, more than a full percentage point higher.

As C-suite responsibilities have grown, the career trajectory for finance leaders has evolved to match. Today, many senior finance employees look beyond their current organization for growth opportunities, and some successfully level-up to CEO positions. These factors, along with increased retention efforts across industries, have all contributed to the rise in CFO pay. More than any other C-suite leaders, CFOs are taking responsibilities off CEOs’ plates and demonstrating their strategic value in steering companies through challenging macroeconomic landscapes. As a result, the traditional boundaries between the CEO and CFO roles are blurring — leading organizations to rethink the ideal CFO profile (and paycheck).

From back office accountants to strategic leaders

While CFOs and CEOs have historically had close relationships born from constant collaboration over financial projections and business strategy, there was a clear divide in their responsibilities, areas of expertise, and visibility across the company. As company lifers, CFO turnover was rare — as was their involvement in business areas outside of financial planning.

But in a 2020 survey of CEOs, 82% predicted the role of the CFO would increase in importance. They turned out to be right.

Increasingly, both organizational stakeholders and employees see CFOs as true senior executives with the necessary experience and skills to step in to run a company. If CEOs are captains of the ship, then CFOs have become trusty first mates who can flex between backroom decision-making and strategic leadership responsibilities that impact company culture. Long gone are the days of CFOs entering the C-suite after climbing the corporate ladder in the accounting or finance department. Now, CFOs must be financial sharks and innovators with strong people skills. Organizations are reevaluating what’s asked of CFOs — and how this role is incentivized and rewarded.

This shift comes at a time when CEOs’ responsibilities are multiplying. While CEOs have long managed traditional priorities like corporate governance, risk management, and strategic goal-setting, organizational needs now require them to expand their scope to include efforts such as digital transformation, data analytics, and ESG and DEI accountability. That workload is too much for one leader to manage alone, and CFOs are stepping up to the plate to provide support.

Successful CFOs bring deep resumes and excellent soft skills

With the broadening resume expected of CFOs, the talent pipeline for this role is less linear than it used to be. Organizational stakeholders must probe beyond traditional accomplishments related to cost-savings and profitability to identify leaders capable of piloting the company alongside the CEO.

In today’s market, identifying the right person for the CFO job requires placing a premium on:

• Management ability: The past decade or so has seen the C-suite expand to include new titles encompassing technology, data, human resources, compliance, and more. Chief information and technology officers often report to CFOs because technology has become a top expense for most organizations. As a result, CFOs must develop a level of technical knowledge in addition to traditional financial skill sets — as well as the ability to manage and coach executives with a wide range of responsibilities outside of finance.

• Communication skills: Financial departments are much less siloed than they used to be. Developing financial targets and business objectives requires a clear understanding of the organization’s technology and infrastructure needs, sales strategy, talent requirements, and tomorrow’s next challenges. To stay informed and work effectively, CFOs must build rich connections with executives across the organization. Additionally, CFOs now interface with board members and shareholders nearly as much as CEOs, and must be adept at nurturing these relationships, communicating with this audience, and reporting on progress.

• Cultural fit: The CEO is still the public face of an organization. But internally, CFOs and other C-suite leaders have become much more visible, and therefore more responsible for living up to corporate pillars and values. With a greater share of financial executives changing jobs and more companies searching externally for CFO candidates, it’s imperative for both hiring teams and job seekers to do their due diligence to ensure they find the right match — not just for the role, but for the organization at large.

Read more: Why the C-Suite is prioritizing workforce wellbeing

Placing a premium on CFO hiring pays off

The expanding scope of CFO responsibilities — from overseeing financial operations to driving digital transformation to navigating global market trends and employee challenges — reflects the growing recognition of their integral contributions to overall corporate success and growth.

With the CFO position evolving from a purely back-office function to a visible leadership role, success requires a broader skill set — one more often found in the chief executive office. That’s a welcome evolution for CEOs, companies, and shareholders, who all benefit from a more integrated and synergistic executive team. It may just take a little more searching to find the right fit.

Jeanne Branthover, Managing Partner, Global Financial Services/Fintech Practice, DHR Global