As noted in our review of CEO pay earlier this year (see 2021 S&P 1500 CEO pay study), pay growth for the top executive role at S&P 1500 companies slowed as companies faced immense challenges presented by the COVID-19 pandemic. This reality also held true for those in the CFO role. This year’s study of CFO pay revealed smaller increases in both target and earned total pay, representing a slower rate of increase than observed in the prior year. The struggle to achieve or surpass bonus plan performance metrics amid global market disruptions led to a drop in overall annual bonus payouts, with the average bonus falling to below target, down from the prior year’s performance. The increase in earned long-term incentives (LTI) was also smaller in the current year, down nearly half year-over-year.
These findings were identified by Willis Towers Watson’s Global Executive Compensation Analysis Team (GECAT) in its annual review of 2020 S&P 1500 CFO pay, as disclosed in proxies filed in 2021. Key drivers of CFO pay include:
For more details, please download a copy of the complete report (below).
Title | File Type | File Size |
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CFO Pay at S&P 1500 Companies: 2021 | 1.4 MB |
As the pandemic caused companies to operate in an economic climate laden with uncertainty, companies tended to take a conversative approach in determining pay adjustments, balancing the need to be able to navigate successfully through the uncertain times while trying to retain those executives at the helm. While uncertainty is still looming, it remains to be seen how companies will address their approaches to determining pay and to what extent earned pay will be affected as the economic and global pandemic concerns continue to adjust.