70% of Upper Quartile PE-Backed Businesses Change Their CFO, New Salary Report Finds

Drax Executive, a strategic leadership specialist for private equity, announces the results of its 2022 CFO salary.

A company’s size, its profitability, and the sector it belongs to has a direct bearing on the salary Chief Financial Officers can command, the survey shows.

Several hundred exiting private equity CFOs were canvassed through 2020/21 amid some of the largest ever carve-out deals by large-cap private equity firms. Carve-out activity was particularly strong in industrials which has noticeably hiked salaries in the sector.
Indeed, the average remuneration for CFOs at private equity-backed industrial businesses with an EBITDA greater than £50m+ is £349,750.
The survey shows a direct positive correlation between CFOs’ salaries and both the revenue (42% correlation) and EBITDA (53% correlation) of their employers.

Additionally, the report finds that 63% of private equity-backed businesses going through an exit in 2020/21 changed their CFO during their hold period. On average only one CFO change was made per company, indicating the importance of the CFO as certain businesses opt to make multiple changes to the role.

 

The top performing private equity firms change their CFO on average after 1 year and 2 months into their hold period, whilst the worst performing firms change their CFO after 2 years and 5 months on average.

 

A surge of late CFO changes were made in 2021 (21%) 6+ years into the hold period as businesses make this alteration to enable an exit, probably an IPO. 
Marcus Beale, Managing Director – CFO and leadership at Drax, said: “Our 2022 salary report has confirmed what we already knew: that the CFO is a key component of the senior leadership team in a private equity-backed asset. To maintain a competitive advantage, its therefore vital that private equity houses and employers attract and retain the very best CFOs on the market.” 
The full report and survey results are available here

About Drax Executive

DRAX is a strategic leadership specialist for private equity, across executive search, leadership development and deal advisory. We deliver leadership insights, leadership development and leadership change.

Source link

Show More