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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.

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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.

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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
Words:202
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