CFO Compensation

What does a fulltime CFO cost? The answer to this question is dependent upon company size and location. The Robert Half 2013 Salary Guide stratifies companies by sales revenue as follows:

  • To $50 million
  • $50 million to $100 million
  • $100 million to $250 million
  • $250 million to $500 million
  • $500 million +

(You can download the guide at http://www.roberthalffinance.com/SalaryCenter.)

The guide provides a national average range that must be customized for local markets. The amount the guide provides is for the base salary and does not include benefits or bonus.

See http://www.bls.gov/ro7/ro7ecec.htm for US Department of Labor – Bureau of Labor Statistics for employer costs for employee compensation. A review of the data indicates that employee benefits will cost the employer an additional 30% to 40% of the employees base salary.

I will only focus on compensation for CFO’s in companies of $50 million or less in sales.

The national average for CFO base compensation for companies of $50 million and less is as follows:

Big City (Chicago)

National Average                      $99,000         to         $142,000
Local factor                                  1.23                             1.23
Base Salary                            $121,770         to          $174,660
Benefits Cost                               30%                             30%
Total Compensation             $158,301         to         $227,058

Suburbs (Chicago Area – Naperville)

National Average                      $99,000         to         $142,000
Local factor                                  1.12                             1.12
Base Salary                             $110,800         to         $159,040
Benefits Cost                                30%                             30%
Total Compensation             $144,040         to         $206,752

It is reasonable to assume that companies below $25 million in revenue would generally pay less for a fulltime CFO compared to companies in the $25 to $50 million range. Since the Robert Half salary guide does not provide data for companies under $25 million, I will use the national average with no adjustment. Thus I am reducing the base salary amount by 12% to 23% depending upon location.

Base Salary                             $99,900           to         $142,000
Benefits Cost                               30%                             30%
Total Compensation            $129,870         to         $184,600

I believe that it is safe to assume that a CFO for a company under $25 million will cost between $130,000 and $185,000 per year including benefits depending upon location. A fulltime CFO is a significant position and commands a corresponding significant salary cost.

Many companies under $25 million don’t need a fulltime CFO nor could afford a fulltime CFO. However, Every Company Needs Financial Guidance®. A solution to this situation is to engage CFO 4 Small Biz TM .

A CFO 4 Small Biz TM Partner, on a part-time basis, can provide high level financial guidance at an affordable cost. A full service (part-time) CFO can be engaged for less than one tenth to one quarter of the cost of a full-time CFO depending upon the services needed.

CFO 4 Small Biz TM offers monthly financial management service at three different levels on a fixed fee basis. Project work is also offered. My job is to help businesses maximize its profits.

Every Company Needs Financial Guidance®.

Is yours exceptional?

If not please contact me.

Dave Mayo, CPA, CGMA
Founder & Partner
CFO 4 Small Biz TM

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