CEO vs CFO Salaries – How do they differ?

CEO and CFO roles are both well compensated. This is not surprising given the strategic importance these individuals have in an organization, however, there is a significant difference between the salaries of CEOs and CFOs.

We will look at this difference. We will also consider the compensation structure for these professionals and trends in the pay gap between CEOs and CFOs.

How do the salary levels of CEOs vs CFOs compare?

CEOs usually earn the highest salary in the company. While the highest-paid CEOs attract multi-million dollar contracts, salaries range from around $462,084 at the lower end to $1,350,985 plus at the higher end, with a median salary expectation of around $882,888.

When you add bonuses, stock options, and other incentives to a basic CEO salary, compensation can exceed $10 million for large publicly traded companies.

CFOs normally attract the second highest salary in the C-suite, below the CEO. Salaries typically range from around $238,394 at the lower end to around $697,099 plus at the higher end, with a median salary expectation of around $446,622.

When you add performance bonuses and equity compensation, total compensation for CFOs in large firms often reaches $3 million to $5 million annually.

How does the compensation structure work for CEOs and CFOs?

Compensation for CEOs and CFOs is not just about salary. For CEOs, a significant portion of their compensation usually comes from equity and performance-based incentives, aligning their pay with company performance. They may also receive other perks, such as travel allowances, security, and other executive benefits.

CFOs also receive a mix of salary, bonuses, and stock options. However, usually, a smaller proportion of their compensation is based on long-term incentives compared to CEOs.

The impact of the industry and company size

The type of industry a CEO or CFO works in has an impact on their salary, as does the size of the company. For example, CEOs and CFOs in tech or finance normally attract higher remuneration than those in manufacturing or retail. When it comes to the size of the organization, CEOs and CFOs at larger companies earn significantly higher compensation. For example, a Fortune 500 CEO might earn multiples of what a CFO at a mid-sized company makes.

Trends in the pay gap between CEOs and CFOs

In recent years, the pay gap between CEOs and CFOs has widened. Looking at the different salaries on average, CEOs earn two to five times more than CFOs in terms of total compensation, depending on company size and sector.

CFOs are normally amongst the highest-paid individuals in an organization. However, their salary is typically below that of a CEO. This gap reflects the broader level of responsibility and higher visibility of a CEO within the organization. However, both of these senior roles attract high salaries. This is especially the case for individuals who work in tech or finance and for those executives who work at larger companies where there is a higher level of accountability.