The year 2023 saw a significant rise in the median pay for Chief Financial Officers (CFOs) at U.S. companies, largely driven by stock-based incentives.

What Happened: According to a report by C-Suite Comp, an executive pay analytics firm, this upsurge in CFO pay aligns with historical trends, a contrast to the exceptional rise observed in 2021, reports The Wall Street Journal.

Leading the charge in executive compensation are CFOs from diverse sectors such as technology, financial services, and retail.

Notably, executives from companies like Walmart Inc. (NYSE:WMT), Apple Inc. (NASDAQ:AAPL), Blackstone Group Inc. (NYSE:BX), and Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) topped the pay charts. Remarkably, half of the top-paid CFOs are women.

In some instances, CFOs like Alphabet’s Ruth Porat and Aon Plc‘s (NYSE:AON) Christa Davies earned more than their respective CEOs, reflecting a shift in compensation dynamics within major corporations.

Meanwhile, companies like Zoom and Booking Holdings faced shareholder scrutiny over executive compensation practices.

Also Read: Employees Slam Google Leadership’s Vision In Wake Of Layoffs: ‘They Are All Profoundly Boring And Glassy-eyed’

David Baff, a board member at C-Suite Comp, justified the higher CFO pay, stating that it is necessary for companies to attract and retain the right person to manage their finances amid an uncertain economic and geopolitical landscape.

Stock-based pay, which varies with the market, constitutes a significant portion of executive pay. As a result, the 24% rise in the S&P 500 last year led to a corresponding increase in executive pay. For instance, Charter Communications Inc. (NASDAQ:CHTR) CFO Jessica Fischer and Aon’s Davies saw their stock options or awards rise more than sevenfold and threefold, respectively.

Why It Matters: The dynamic economic and geopolitical landscape has firms prioritizing financial leadership, prompting them to offer competitive pay packages to retain top talent, according to industry experts.

While the surge in CFO pay has been significant, it has not been without controversy. High executive pay has come under scrutiny, particularly when companies underperform.

Shareholders often use votes on pay to voice their dissatisfaction with issues such as dividend policy or governance matters. This trend highlights the ongoing debate about executive compensation and the role of stock-based incentives in driving it.

Now Read: Employees At These Large Companies Are Most Satisfied With Their Pay Packages: Meta, Alphabet (Google) Slipped In The Rankings

This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

Image generated using artificial intelligence via Midjourney.