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CFOs have a lot going for them, but there’s one thing they don’t have at the moment: job security. In recent years, CFOs have had the least job security in the C-suite, according to a new Datarails study based on complete filings of company records from 2,056 US listed companies between 2016 and 2021.
Within that time range, which Datarails notes is the “latest period for which official data exists,” CFOs at the biggest publicly listed companies held the post for an average of 3.51 years. Turnover was the name of the game: 56% of companies saw at least one CFO turnover, while 16% faced more than one CFO switch.
Between 2016 and 2021, 269 major companies—including Tesla, Starbucks, United Airlines, and Procter & Gamble—clocked three CFO shake ups. Another 52 companies—including CVS Health, Papa John’s International, and Avis Budget Group—saw four CFOs come and go in that same time frame, per Datarails.
And three companies entered rarefied territory: the five-in-five club. Sally Beauty, manufacturing company Superior Industries International, and marketing company Harte Hanks all cycled through five CFOs by the end of 2021.
Even though the entire industry was defined by departures, some sectors fared better than others. CFOs for hotels, resorts, and cruise lines as well as cable and satellite companies led the pack with respect to tenure length, followed by professional services. Those CFOs had an average tenure length of 3.4 years and above. At the bottom? CFOs working in railroads, advertising, and pharmaceuticals. They had average tenures of 2.7 years and below.
It wouldn’t take a genius to predict that a global pandemic might have at least some impact on turnover. Rocket scientist or not, you’d be at least somewhat right: While CFO turnover stayed steadily high throughout the duration of the study, the figure hit a high point in 2021. Though it wasn’t covered in the study, there was less CFO turnover at Fortune 500 companies from Q1 to Q3 in 2022 than in 2021, per executive search firm Russell Reynolds. However, the firm said the “slowing turnover may paint a misleading picture,” and didn’t expect the dip to last.
But for all this turnover, there’s a bright spot: As the CFO role has changed to meet an increasingly challenging economic backdrop, pay has increased “to meet this burden,” according to the report’s authors. Average CFO pay, which includes salary, bonuses, stock awards, and options, rose from $2.4 million in 2016 to $3.5 million in 2021, marking a 40% increase, per Datarails.
Still, the report’s authors don’t expect the CFO mass migration to let up soon. While CFOs have “emerged as second only to the CEO in terms of responsibility and accountability for business performance,” the “immense” pressure of the role looks set to continue, the report’s authors note.
“With more economic challenges ahead, the pain points fueling this exodus are unlikely to be soothed in 2023,” they wrote.