CFO Pay Sees 8% Surge, Long-Term Incentives Now 63% of Total Compensation
Chief Financial Officer (CFO) total direct compensation increased by approximately 8% in 2025, with long-term incentives now constituting 63% of the average pay package. This rise reflects strong corporate performance and an increased focus on executive retention within companies. For the first time in several years, the pay growth for CFOs and CEOs nearly matched, with CEO compensation rising 9% during the same period.
Total direct compensation for Chief Financial Officers (CFOs) rose by approximately 8% in 2025, according to new data. This increase aligns with a broader trend of converging pay growth between CFOs and Chief Executive Officers (CEOs), whose total direct compensation increased by 9% in the same year.
The findings are based on an analysis by Compensation Advisory Partners (CAP), which examined 140 large companies with at least $5 billion in revenue, with a median revenue of $15.6 billion. The report indicates that strong corporate performance, marked by median revenue and operating income increases of 6% and 8% respectively, has contributed to this pay growth. An increased focus on executive retention is also a significant factor.
Long-term incentive (LTI) awards played a crucial role in CFO compensation, jumping 12% in 2025 and now accounting for 63% of their average pay packages. For CEOs, LTIs increased by 9% and represent 73% of their compensation. These incentives are tied to future performance and vesting, serving as key tools for aligning executives with company goals and ensuring retention.
While base salaries saw more modest increases—3.7% for CFOs and 2.1% for CEOs in 2025—CFO compensation generally remains about one-third of CEO pay, a ratio that has been consistent for a decade despite the expanding responsibilities of the CFO role into areas like enterprise transformation and data strategy.
Exceptions exist, such as Tesla CFO Vaibhav Taneja, who received approximately $139 million in total compensation in 2024, primarily through stock-based awards. Similarly, CFOs at Alphabet/Google and AMD have secured multi-million dollar packages driven by sign-on grants and performance-based equity linked to growth plans. However, these cases are considered outliers within the broader compensation landscape.
The incorporation of artificial intelligence (AI) into executive compensation plans is still evolving, typically appearing in strategic components of short-term bonus plans rather than as a widespread embedded incentive. The overall structure of executive pay continues to be heavily performance-based, increasingly weighted toward long-term equity, and closely aligned between CEOs and CFOs, particularly when corporate results are strong.
According to Fortune, Kelly Malafis, founding partner at CAP and co-author of the report, noted that companies prioritize stability in leadership within an increasingly competitive environment. (Source: Fortune)
