In surprising news from the corporate world, female CEOs and CFOs are now making more than their male counterparts. According to human resources experts, it turns out it’s largely a matter of supply and demand. There are relatively few experienced, highly qualified female senior corporate executives, and mid-size and larger firms are willing to pay up to bring them on board.
A new study by executive compensation firm Equilar and the AP highlights that the median compensation for female CFOs last year rose nearly 11% to $3.32 million. Male CFO compensation moved up 7% to $3.3 million. A similar trend has been noted for female CEOs over the last few years.
Female CEOs today often move up from CFO
According to the study, the increase in CFO pay for both men and women is mainly a result of the expansion of the CFO role to include a good deal more responsibility and public visibility.
“The CFO is no longer a bean counter,” explained Josh Crist, managing director at executive search firm Crist Kolder Associates.
Gregg Passin, a compensation expert at consulting firm Mercer, notes that enterprises and shareholders are more focused on financial security and regulation following the financial crisis, and corporate finance is playing a larger role in developing long-term strategies.
Ruth Porat is a good example of the trend. Porat worked her way up to the top at Morgan Stanley, one of the nation’s biggest investment banks, after the financial crisis. She is in first place on the list of highest paid female CFOs, with a $14.4 million compensation package for 2014.
Porat has since moved over to Google with a multi-year deal worth around $70 million. Investors at Google/ Alphabet hope that Porat will instill some financial discipline in a firm known for its free-spending ways.
There has also been a notable recent trend where CFOs eventually become CEOs. Examples include Indra Nooyi, the current CEO of PepsiCo and Lynn Good, the new CEO of Duke Energy.
“It’s a unique position that has the ability to contribute to day-to-day operations but also on long-term strategic planning,” Good noted. She referred to the CFO position as “a critical training ground” for aspiring CEOs.
Other female CFOs with multi-million dollar pay packages include Marianne Lake of JPMorgan Chase, whose annual deal is worth $9.1 million, Catherine Lesjak of Hewlett-Packard who brings in $8 million, Sharon McCollam at Best Buy who makes $7 million and Robin Washington of Gilead Sciences who earns close to $6.2 million annually.
