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News in Brief: Companies Unprepared for CFO Exodus
  

Companies Unprepared for CFO Exodus
Somewhat alarming to one CEO was the fact that three-quarters of the executives surveyed said their companies did not have established succession plans for the key post.
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April 19, 2007
Companies Unprepared for CFO Exodus

The high turnover rate for chief financial officers isn’t likely to change anytime soon, and based on a recent survey of CFOs by audit firm Grant Thornton, few companies have plans to deal with it.

The national survey of 134 CFOs and senior finance executives found that nearly one-third of the respondents planned on retiring or leaving their companies in the next three years. Somewhat alarming to Grant Thornton CEO Edward Nusbaum was the fact that three-quarters of the executives surveyed said their companies did not have established succession plans for the key post.

“No one wins if you’re caught off guard by the departure of your CFO,” Nusbaum said in an e-mail. “Companies will want to bring renewed focus to the pivotal role of CFO, and if they don’t have a succession plan, begin to put one in place.”

The survey included several interesting findings on career and compensation questions:

• Fifty-six percent of respondents eventually want to be CEO of a company, but not necessarily their own.

• Nearly 60 percent felt their CEOs were appropriately paid, with only a slightly higher percentage thinking he or she was overpaid rather than underpaid.

• Sixty-two of the 134 respondents felt that the gap between their compensation and that of their CEOs was too large, suggesting that many believed they were being underpaid based on their answers to the previous question. Another 62 felt the pay difference with their CEOs was “about right,” and just five executives felt the gap between their pay and that of their CEOs was too small.

Filed by Andrew Osterland of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

 


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