September 30, 2021


Pay Trends: Spotlight on Chief Financial Officers – 2021 Update




Kelly Malafis
Founding Partner [email protected] 212-921-9357
Roman Beleuta
Principal [email protected] 646-532-5932
Louisa Heywood
Associate [email protected] 646-568-1160


CAP periodically publishes a study on compensation for Chief Financial Officers (CFOs) relative to Chief Executive Officers (CEOs). Our analysis for fiscal 2020 compensation is based on a sample of 135 companies with median revenue of $12 billion. Additional information on criteria used to develop the sample is included in the Appendix.

Study Highlights

Pay Component


Base Salary

  • Prevalence of base salary adjustments in 2020 for both CEOs and CFOs was approximately 10% lower compared to prior years. Overall, 44% and 55% of companies made increases in 2020 for CEOs and CFOs, respectively
  • Among companies that made salary increases, the median CEO increase was 4.1% and median CFO increase was 4.3% These increases were generally in line with prior year’s increases (3.6% and 4.0%, respectively)
  • Among the total sample, median increase for CEOs was 0%, a decrease from 2.5% last year and median increase for CFOs was 2.7%, similar to 3.0% last year


  • Among our sample, approximately half of the companies had lower bonus payouts in 2020 and approximately half had higher bonuses. Therefore, the median change in actual bonus payouts was 0% for both CEOs and CFOs.
  • While bonus payouts were almost evenly distributed between increases and decreases, the range of bonus payouts between 25th and 75th percentiles was wider in 2020
  • The bonus payouts were mostly aligned with company performance during 2020
  • Median target bonus opportunities remained unchanged for both CEOs (150% of salary) and CFOs (100% of salary), with the median CEO target bonus level unchanged for the last 7 years

Long-Term Incentive (LTI)

  • LTI opportunities increased 5.3% for CEOs and 8.7% for CFOs, which were generally in line with CEO and CFO increases last year (6.1% and 8.3%, respectively)
  • Due to SEC disclosure requirements of LTI awards, the awards captured in this analysis represent awards made before the COVID-19 pandemic

Total Compensation

  • Median 2020 increases in actual total direct compensation (i.e., cash plus equity) for CEOs and CFOs were 3.3% and 4.1%, respectively, indicating more modest increases for CEOs compared to the prior year (4.4% and 3.6% for CEOs and CFOs, respectively) primarily due the impact of bonus payouts in 2020
  • Similar to prior years, the CFO total compensation continues to approximate one-third of CEO total pay

Pay Mix

  • The emphasis on variable pay over fixed pay, and performance-based equity over time-based equity continues
  • LTI mix shifted slightly (about 5%) towards more time-based equity compared to 2019. We believe the trend of slightly higher emphasis on time-based equity will continue into 2021, however, performance-based equity (performance plans and stock options) will represent at least two-thirds of total LTI

Study Results


In 2020, the salary increase prevalence declined by about 10% from historical practice. We believe the COVID-19 pandemic was the main factor for the decrease. However, salary increases were still quite prevalent for CEOs and CFOs, at 44% and 55% of the sample, respectively. As indicated in the charts below, median 2020 salary increases were 2.7% for CFOs (or 4.3% for those receiving an increase) and 0% for CEOs (or 4.1% for those receiving an increase).

2020 Salary Increases

0.0%0.0%4.0%0.0%2.7%5.1%25th PercentileMedian75th PercentileCEOCFO2.9%4.1%8.5%3.0%4.3%8.0%CEOCFO25th PercentileMedian75th PercentileAll CompaniesOnly Companies with Increases

Changes in Actual Pay Levels

The actual total cash compensation for 2020 was generally flat among our sample with only CFOs seeing a minor salary increase in salary levels. On a total compensation basis (including long-term incentive awards), the median rate of increase continued to trend lower for CEOs and was generally flat for CFOs (3.3% for CEOs and 4.1% for CFOs).

Median Percentage Change in Pay Components


Pay Components

2017 – 2018

2018 – 2019

2019 – 2020














Actual Bonus







Long-Term Incentives







Actual Total Direct Compensation







As indicated above, the sample had approximately the same number of companies with bonus increases (64 CFOs and 60 CEOs) and decreases (65 CFOs and 60 CEOs). A small number of companies had the same exact payout for two straight years (6 CFOs and 15 CEOs).

Bonus payouts were generally aligned with performance outcomes for most companies. For example, of the companies with a bonus decrease, over 60% had a decrease in operating income during 2020 and over 80% of companies with a bonus increase had higher operating income during the year. Bonus payouts were also aligned to revenue and TSR performance for the year.

Median Total Compensation Increase by Industry1


Median total compensation increases varied by industry. In 2020, Consumer goods (Staples and Discretionary) industries and IT companies generally experienced higher compensation increases compared to other industries.

Target Pay Mix

The pay program structure for CEOs and CFOs has remained largely unchanged since 2011. CEOs continue to receive less in the form of salary and more in variable pay opportunities, especially LTI, than CFOs.

18%18%18%17%19%24%22%26%63%58%60%57%2019202020192020Stock OptionsTime Vested Restricted StockPerformance PlansCEOsCFOs

Target Bonuses

Target bonus opportunities as a percentage of salary remained unchanged for the CEOs in the sample. For CFOs, the 25th percentile increased to 90% of salary from 80% last year. We expect target bonuses will continue to remain largely unchanged.

0.0%20.6%8.3%6.4%-0.2%1.2%4.8%-1.1%3.2%3.4%18.7%4.1%10.9%-12.1%7.9%4.0%-2.8%4.0%-15.0%-10.0%-5.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%Financials(n=32)Consumer Staples(n=6)InformationTechnology (n=11)ConsumerDiscretionary (n=18)Energy (n=7)Industrials (n=21)Utilities (n=12)Health Care (n=12)Materials (n=12)CEOCFO

Long-Term Incentive (LTI) Vehicle Prevalence and Mix

The use of two different vehicles to deliver LTI remains the most prevalent approach, used by almost 60% of companies. Approximately 30% of companies in the sample use all three equity vehicles (stock options, time-based stock awards, and performance plan awards).

The portion of LTI awards granted in Performance plans decreased slightly in 2020 at the expense of higher time-based awards. The stock option portion remained unchanged. Even though most of the awards in the analysis were granted before the onset of the COVID-19 pandemic (due to disclosure rules), the minor increase in time-based awards was expected.

140%140%150%150%200%200%20192020CEOs80%90%100%100%120%130%CFOsMedian ValueRange between 25th and 75th percentilesTarget Bonus as a % of Base Salary


Financial performance in 2020 fell compared to prior years. Revenue declined 1% at median and operating income increased 1% – below 2019 increases of 3% and 5%, respectively. In a typical year, performance at these levels would have likely resulted in more meaningful compensation decreases. The COVID-19 pandemic was a shock to the system with many companies evaluating the impacts of the pandemic at the end of the year and adjusting performance results for annual incentive calculations, since annual incentives are typically paid to a broader employee population than are long-term incentives. The total cash compensation outcomes for 2020 (i.e., flat bonus payouts on weakened absolute financial performance) continue to reinforce the alignment of pay outcomes with a broader view of company performance.

Since many companies made equity grants early in 2020, prior to the impact of the pandemic on the stock market, we may not see the pandemic’s impact on LTI levels until the 2021 grants are disclosed.


Sample Screening Methodology

Based on the screening criteria below, we arrived at a sample of 135 public companies with median 2020 revenue of $12B.


At least $5 billion in revenue for fiscal year 2020

Fiscal year-end

Fiscal year-end between 9/1/2020 and 1/1/2021

Proxy Statement Filing Date

Proxy statement filed before 3/31/2021


No change in CEO and CFO incumbents in the past three years


All industries have been considered for this analysis

1 Excludes industries which had a sample of fewer than five companies. Total compensation equals the sum of base salary, actual bonuses, and LTI awards granted in 2020.