Total direct compensation (including base salary, short-term payouts and the expected value of long-term incentives) rose by 7 percent in 2013 for CFOs to a median of $3.13 million, according to an analysis conducted by Mercer.
Mercer studied compensation and benefits for the CFOs of 491 companies in the S&P 500, 11 percent of which were healthcare companies. Corporate profitability — including a 3 percent rise in revenues and a 5 percent increase in profitability measured by EBIT in 2013 — led to higher compensation for CFOs last year, according to the analysis.
Annual cash compensation rose by 6 percent to a median of $1.22 million last year, Mercer found. Base salaries went up by 3 percent to a median of $600,000, while short-term incentive payouts increased by 6 percent to a median of $651,000. Additionally, the grant date present value of long-term CFO incentives went up by 4 percent in 2013 to a median of approximately $1.84 million. The percentage of CFOs in the S&P 500 receiving performance shares or performance cash awards also continued to rise, reaching 45 percent last year (compared with 42 percent in 2012 and 37 percent in 2011).
Meanwhile, compensation mix stayed roughly the same from 2011 to 2013, with base salary accounting for 22 percent of total direct compensation, short-term incentives composing 21 percent and 58 percent coming from long-term incentives, according to Mercer.