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Financial officers rake it in.

A survey of multi-billion-dollar U.S. companies showed that 1997 was a very good year for corporate financial executives, with double-digit compensation increases over 1996, Pearl Meyer & Partners, Inc., a New York City consulting company specializing in executive compensation strategy and programs, examined a group of service and industrial companies with average revenues of $19.4 billion. The survey revealed that, although financial managers are earning more than ever, components such as stock options and bonuses are becoming more important than base salary. Financial managers in a variety of senior positions saw their total pay packages achieve rapid growth.


However, the fixed portion of pay declined. Thirty years ago, salary constituted nearly all the compensation for these executives. It now accounts for less than half. The compensation package's non-salary components increased very quickly while salary raises were modest. For example, controllers actually saw a small decrease in their salaries on average, even though they got large increases in the amount of stock options.


CFOs especially are seeing their fortunes rise and fall with those of their companies. Their salaries have become comparatively insignificant pieces of their compensation pie, as flexible rewards have risen:
Salary: 22%
Nonfixed components: 78%
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Title Annotation:1997 compensation
Publication:Journal of Accountancy
Article Type:Illustration
Date:May 1, 1998
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