The job of a chief financial officer (CFO) is tough and is reflected in the compensation earned by those in the position. In terms of rank, their compensation is typically less than that of the chief executive officer and chief operating officer respectively. This is no different for the CFOs of United States-based public home building organizations.
We researched the total compensation for CFOs from 19 U.S. building companies. Our list of CFO compensation for 2017 provided us with both new faces and diversity. Last year we noted that the CFOs analyzed were all men, but this year’s list gets girl power via Meritage Homes CFO Hilla Sferruzza.
The combined total compensation for the CFOs of the companies researched was $40,879,897, with an average of $2,271,105.39, and a median of $2,238,657. These numbers do little to demonstrate the wide spectrum of compensations that are seen for CFO’s. On one side there are packages like that of Lennar Corp.’s Bruce Gross ($5,031,143), and on the other are those like that of The New Home Company’s John M. Stephens ($1,170,966). However, as seen in the chart below, how well the company–and industry–are doing financially affects how well the CFOs do.
While all of these compensations are respectable, they also help to show the differences in the sizes and activities of the companies. The two previously mentioned companies, Lennar and The New Home Company, serve as examples of these differences.
Bruce Gross is no stranger to our list, having occupied the top spot last year. Gross works for Lennar, a company that posted first quarter earnings of $2.3 billion. During the first quarter of 2017, the company’s new home orders increased to 6,483 and the homes in backlog totaled 9,017. Stephens, a newcomer to this year’s list, works for The New Home Company, which saw it total earnings increase to $125 million during the first quarter. The company’s new home order totaled 125 and and its backlog was 151.
Total compensation for CFOs is made up of base salaries, bonuses, stock awards, option awards, non-equity incentives, changes in pension value, and other compensation. The average base salary for the 19 CFOs was $540,278.58, and their base salary made up, on average, a quarter of their total compensation. Base salaries range from $300, 000 to almost one million and make up anywhere from 15% to 49% of the total salary.
When examined as mere averages, questions abound in regard to the total compensation of each CFO. However, when looked upon individually, we get a better view of the differing stories of their respective companies.
