At a glance, “chief financial officer” may seem like a thankless position. Traditionally, CFOs are responsible for a company’s balance sheet, costs, earnings, investor relations, tax policy, and capital and acquisition structure — you know, all of the things that make for compelling conversation over dinner or a pint.
The reality, though, is that the financial czars at America’s top companies are thanked quite generously for their services. Executive compensation was brought into the spotlight in the wake of the 2008 financial crisis, and it’s not just CEOs who populate the list of the highest paid people in the country. Data compiled by Bloomberg show that CFOs are taking home record-setting compensation packages.
Particularly in the technology industry, where stock-based compensation is stacked on top of executive-level salaries, CFO compensation is rivaling — and in some cases exceeding — CEO compensation. Like their executive-level peers, these officers are being rewarded for successfully navigating the highly competitive and rapidly-evolving technological and regulatory landscape in which they operate.
To get an idea of how clever top tech CFOs have proven themselves to be, take a look at the average effective tax rate for companies in the S&P 500 in 2012 and compare it against the effective tax rate for the nine tech companies with the highest-paid CFOs. Excluding Facebook (NASDAQ:FB), which had an effective tax rate of 89.3 percent because of IPO-related costs, these tech companies paid an average effective tax rate of 22 percent. This compares against an average effective tax rate of 41 percent for the rest of the S&P 500.
According to Bloomberg’s data, Apple (NASDAQ:AAPL) CFO Peter Oppenheimer received a 2012 compensation package worth $68.6 million. In case it’s not clear why, he finagled a 25.2 percent effective tax rate for the company in fiscal 2012, and presided over a balance sheet with $121.3 billion in cash and long-term investments at the end of the period.
The company reportedly paid $6 billion in federal income taxes, one of the highest corporate tax payments in history.
It’s important to reiterate that a lot of this compensation is stock-based, a common practice not just at technology companies but for CFOs. What’s more, some of last year’s compensation packages at Apple were inflated in order to retain executive-level talent.
Here’s how CFOs were compensated at other top tech companies:
|Company||CFO||Compensation||2012 Stock Growth|
|Oracle (NASDAQ:ORCL)||Safra Catz||$51.7 million||+34.0%|
|Google (NASDAQ:GOOG)||Patrick Pichette||$38.7 million||+8.7%|
|Intel (NASDAQ:INTC)||Stacy Smith||$15.3||-12.9%|
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