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The somewhat infamous CEO Pay Ratio rule, which requires companies to annually report the ratio between compensation paid to their CEO and median-paid employee, gets a fair amount of public attention.
Yet the ratio between compensation for CEOs and their chief financial officers — often a company’s next-most highly paid executive — gets virtually no attention, public or otherwise. So we at CFO.com thought we’d give it some.
We pulled the most recently reported CFO compensation data — salary, other compensation and total — from the SEC filings of a sample set of 50 publicly held U.S. companies. We focus on the companies with the highest-paid CEOs, as recently reported by WSJ.com. Additionally, WSJ released its top compensated U.S. CFOs, which is largely in alignment with this ranking, but keep in mind there are a few discrepancies due to the timing of the proxy filings.
The list of companies includes both household names (American Express, Apple, Exxon Mobil, Netflix, Salesforce) and less-familiar ones (Aline Technology, Booking Holdings, Iqvia Holdings, Sempra Energy).
We wondered, do the best-paid CFOs work for the same companies as the top-earning CEOs?
The answer is somewhat “yes,” but probably more “no.” While it’s certain that a mathematical analysis would find a clear statistical correlation between high CEO and CFO pay, there is notable inconsistency when looking at the data from company to company.
For example, at the top of the CEO pay list, Broadcom’s Hock Tan was enriched to the tune of $161.83 million last year (all but a dusting of those dollars in the form of stock awards).
However, compensation for the company’s CFO, Kirsten Spears, at $15.24 million, was only 12th among the finance chiefs in the 50-company set. The CEO-CFO pay ratio: 10.6 to 1.
A few spots down the CEO pay list, in 6th place, was Apple chief Tim Cook, with $63.21 million. His CFO, Luca Maestri, did much better than his counterpart at Broadcom, in both total compensation ($26.94 million) and CEO-CFO pay ratio (just 2.3 to 1).
Another high-earning CFO was Denis Coleman of Goldman Sachs, who pulled in exactly $20 million, not far behind his boss David Solomon, who was 49th on the CEO list at $26.67 million. Pay ratio: 1.3 to 1.
Maestri’s compensation, incidentally, would have ranked 47th on the CEO compensation list, tied with Blackrock chief Laurence Fink.
The highest-paid CFO in the 50-company set, Jean Hu of Advanced Micro Devices with $32.81 million, would be 26th on the CEO list, snuggled between the leaders of Morgan Stanley and Boeing.
CEO/CFO compensation ratio
In one of the best examples of the quirkiness of this executive compensation data, Hu out-earned her boss, AMD’s Lisa Su, who was paid $30.35 million, by almost $2.5 million. Thus, the CEO-CFO pay ratio in this case was 0.93 to 1, the only negative gap in the ranking.
Hu, who was a new hire for AMD in January 2023, was paid a $2 million signing bonus and granted more than $28 million in stock awards.
In several cases, CFOs who had a reduced equity component, due to the timing of events, resulted in fairly high CEO-CFO pay ratios. Some CFOs were transitioning out of the role, assumed the chair in the middle of the year or were first-time CFOs, resulting in pay ratio outliers. Examples include Intuit’s Michelle Clatterbuck (17.3 to 1) and Fair Issac’s Steven Weber (14.2 to 1). Overall, the top 50 S&P 500 CEOs earned a median 3.3 times more than their respective finance chiefs.
Stepping outside the 50-company group for a moment, the WSJ published compensation data for 415 CEOs, and at the bottom of the list are some interesting anomalies in terms of CEO-CFO pay ratios.
At number 411 is Warren Buffet of Berkshire Hathaway, credited with just $410,000 in compensation for 2023. As CFO Marc Hamburg was paid more than $3.8 million, the ratio was 0.11 to 1.
Even more unusual was the #415 CEO in pay, Tesla’s Elon Musk, who received no compensation. Therefore, while the company’s CFO, Vaibhav Taneja, was paid just $278,000 after joining the company in August 2023, the pay ratio is not calculable.
Meanwhile, like other corporate executives, CFOs receive most of their income in the form of stock awards and option grants. Only 12 finance chiefs in the 50-company set earned more cash than noncash compensation.
Among those, other than Clatterbuck, who served only part of the year in the role, the greatest disparity was for American Airlines CFO Devon May, who received more in salary than in other compensation.
Correction: A previous version of this story stated Intuit’s Michelle Clatterbuck was new to her CFO role. Clatterbuck was in fact transitioning out of the role, reducing her equity compensation during this period.
