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European CFO Barometer 2011

More than 2,400 chief financial officers (CFOs) and finance directors responded to an international survey conducted by Michael Page, providing information about their job responsibilities, qualifications and career opportunities.

CFOs1 have a broad range of responsibilities that also increasingly require management and strategy skills. The prominent position held by the CFO within the company is reflected both in the CFO’s collaborative relationship with the CEO and the CFO’s salary. Many CFOs have ambitious career goals

CFO remuneration levels differ greatly by country

In most companies, the task of overseeing company finances falls into the hands of a few experts. In a reflection of this, almost half of the surveyed CFOs work in finance departments with fewer than 10 employees. This applies in particular to CFOs of small companies with fewer than 100 employees. Large companies with 5,000 or more employees, however, do not necessarily maintain large finance departments. The smaller the finance department, the more multifaceted the CFO’s sphere of responsibility. Most respondents perform administrative tasks alongside their core responsibility of overseeing company finances. Almost half of the CFOs also handle legal issues. Moreover, many CFOs assume responsibility in the areas of IT, human resources, procurement and supply-chain management. In most companies, the CFO enjoys a prominent position. This is reflected in the CFO’s position in relation to the CEO as well as in a CFO’s remuneration. Two-thirds of the respondents describe their relationships with the CEO as collaborative and team oriented. Generally speaking, CFOs earn more than €60,000 a year (including bonuses and benefit packages). A total of 41 percent of the respondents earn at least €120,000, and 13 percent earn at least €200,000. The salaries in Poland are still significantly lower comparing to the European average.

On average, female CFOs earn less than their male colleagues. Income also increases in relation to professional experience and company size. CFOs in Switzerland, Germany and Austria earn the highest salaries. The remuneration levels in Portugal, Spain, Sweden and Poland are comparatively low.

As a CFO’s salary increases, the performance-based component of his or her remuneration often tends to rise as well. It is also generally higher among Polish Finance Directors.

CFOs express little confidence in the euro

The majority of the surveyed CFOs are upbeat about the performance of their own companies. This outlook tends to be more positive if a CFO also has a positive opinion about the overall economic environment in his or her country. This is particularly the case in countries with healthy GDP growth rates, including Turkey, Poland, Russia, Germany and Sweden. In contrast, CFOs in Portugal, Spain and Italy have a negative opinion about their respective economic environments. A glance at the International Monetary Fund forecast reveals that these countries can indeed expect low or even negative GDP growth during the current year. A majority of the surveyed CFOs express little confidence in the euro. Seventy-eight percent say they have “little” or “no” confidence in the currency. CFOs from countries where the euro was introduced on Jan. 1, 2002, are especially critical. In contrast, CFOs from countries that are not part of the eurozone – for example, Russia, Sweden, Switzerland and Turkey – tend to have more confidence.

CFO’s self-image: senior manager with international focus

An examination of the individual profiles of the surveyed CFOs reveals that most CFOs have many years’ experience in their positions. Only roughly one-fifth indicate they have been CFO for less than 5 years. Most of the surveyed CFOs were between 30 and 40 when they assumed their positions.

CFOs younger than 30 now have and have had notable opportunities in Russia, Poland and Portugal. Poland in particular is one of countries with an exceptional percentage of directors who assumed their position before turning 30 years old.

In particular, CFOs who work at companies with at least 5,000 employees frequently have international experience: three-fourths of them have lived and worked outside their home countries – 17 percent for at least 10 years. In contrast, 56 percent of the surveyed CFOs in companies with fewer than 100 employees have not (yet) gained international experience. CFOs who have worked abroad almost always speak English fluently. In contrast, they do not necessarily speak the language of the country where they work. Only about 60 percent of the surveyed CFOs in Russia and in Italy can speak the national language. In Poland up to 99 percent of CFOs speak fluent English and are thus ready for international careers. English plays a much bigger role in Poland than Polish, which “only” 77 percent of CFOs in Poland speak fluently.

Finance departments introducing new policies

CFOs are gearing up for changes in their companies and finance departments this year. According to the respondents, 54 percent of companies intend to improve their procurement processes. Additional projects include the implementation of new IT and ERP systems, internationalization and the search for new sources. According to the surveyed CFOs, new policies will be implemented in 37 percent of the finance departments in 2011. Centralization is planned in a further 26 percent. More than one-fourth of finance departments are planning to create permanent jobs. This will occur in companies that were described as “performing” by the respondents and in those that operate in healthy economies. In contrast, the job situation in the finance departments will tend to remain grim in Spain, Portugal and Italy this year.

The full report ‘CFO Barometer’ will be available in October – to get it, visit the website of Michael Page International: www.michaelpage.pl