What is the average salary of a CFO? It has been a question to several entrepreneurs in the UK. Well, the salary of a CFO depends on the size of your business and its location. If you have a business in London, you need to pay approximately the highest salary compared to other parts of the UK.
Depending on the salary of a CFO and the complexity of finances, business owners tend to decide whether they need a full-time employee or a part-time CFO. A CFO or Chief Financial Officer is a financial expert who manages your business finance at the highest corporate level.
In this blog post, we’ll cover the following few points that make the process of hiring a CFO easy:
- What is the average salary of a CFO in 2022?
- How to compare the salaries of the CFO?
- 27 key CFO interview questions
- Wrapping up
What is the average CFO salary in 2022?
According to a survey, CFO in the UK can earn an average of £152,000 per year. That salary can be as low as £78,900 or as high as £232,000 per year. This does not include the CFOs at bigger enterprises, who earn significantly above £232k.
More than 50% of CFO in the UK earn less than £146,000, and the remaining half earn above that. It is the median salary. On the left side, 25% of CFO earn less than £101,000, and 75% of others make more than that. On the right side of the median, 75% of CFO earn less than £181,000, and the remaining 25% earn more than £181,000.
The salary of a CFO depends on several factors, like company size, company location, CFO qualification, and years of experience. Public CFO has three components added to their salary: base salary, bonus, and equity.
Suppose you are looking into how much a CFO in the Apple company earns? Luca Maestri from Apple earns nearly $1 million per year. The 2020 total compensation was $26,253,270.
How to compare the salaries of the CFO?
With experience
When determining the salary of a CFO, their year of experience plays a crucial factor. The more years they work in the industry, the higher a CFO’s salary.
A CFO with less than two years of experience can earn approximately £89,600 per year. This salary increases by 34% when they gain an experience of 2 to 5 years. The average wage becomes about £120,000 per year.
Additionally, When a CFO gains an experience of 5 to 10 years, they can earn something around £156,000 per year; for 10 to 15 years, it rises by 21%, and the salary becomes £189,000.
A CFO with experience working for 15 to 20 years can expect a salary of around £207,000 per year and a 5% hike in wages, turning out to be £218,000 per year for CFOs with more than 20 years of experience.
Credit: Salary Explorer
By education
A degree can add an amount to your salary. Higher the educational degree, the higher the pay.
A CFO with a high school degree can earn around £108,000 per year, and with a Certificate or Diploma, the salary rises to £123,000 per year, which is a 14% hike.
While practicing their expertise in handling different companies or working with outsourcing accounting firms, CFO can continue with higher education. Because a CFO with a bachelor’s degree can earn around £174,000 per year, and with a master’s degree, it can rise to £211,000 annually.
If you are willing to pursue higher education, you open doors toward higher-paying job opportunities.
Credit: Salary Explorer
By location
Credit: FD Recruit
The average salary of a CFO vary according to business location.
For example,
- If you hire a CFO in London, you pay around £161,000 and above per year.
- For Wales, the salary of a CFO is £130,200+ annually.
- For Scotland and the East of England, it is £138,600 and above.
- For the South East of England, the salary is £144,200 or above.
- For the South West of England, it is £137,200 and above.
Other factors
CFOs with multitasking ability, experience with automation, big data analytics, and good communication skills with strong digital skills can earn more than traditional CFOs. Technical and educational skills are not sufficient in the era of technology; you need to be tech-savvy and understand the latest financial tools and software usage.
CFO Services
Work with a London-based accountant for tax, accounting, payroll, & EIS/ SEIS needs.
27 key CFO interview questions
The hiring process of a CFO is not easy. They are the financial head of a company that builds, manages, and leads your financial team and helps you reach goals by analyzing your data and reports. You cannot hire anyone for this post.
It is essential to arrange a face-to-face interview, go through their resume, clarify shortcomings and understand positive points. Here are a few CFO interview questions that you can ask to ensure the right candidate.
- What were your previous responsibilities in the industry you worked in?
- Why do you find this role interesting?
- How are you qualified for the job role?
- What is the most interesting and the most challenging thing in financial management?
- Look into our current business scenario, and speak about some opportunities and threats we’ll face in the upcoming year.
- Do you have any experience working in our industry?
- What are our financial initiatives, business mission, success stories, and goals?
- How long did you work in a financial leadership position?
- What are your qualifications and specialisations?
- How will you manage the annual budget of our company?
- How will you foster ethical values within a team?
- What are your leadership qualities?
- What do you think can add value to my company with its present status?
- How do you understand when a company can make investments? How can you determine if the investment will be profitable?
- Which tools you use for financial analysis?
- If you find a revenue decrease, how will you solve it?
- What do you mean by entity risk? How are they important to know for financial management?
- How do you work with annual budgeting and forecasting?
- Why do you think deferred tax liabilities arise during merger and acquisition deals?
- How will you discuss bad news with the board of directors?
- How do you handle a situation when direct reports are not meeting your expectations?
- How can you handle conflict in a team?
- What experience do you have with strategy development?
- How can you prevent the risks of errors in my business?
- Discuss the sales pipeline math you use in supporting a firm’s revenue projection.
- Give me an example of a successful debt fundraising effort from your experience.
- What are the most difficult decisions a CFO needs to make?
Apart from these questions, you can ask them anything you need to understand before hiring a CFO.
Wrapping up
One of the critical decisions companies make is hiring a CFO; if yes, will it be a part-time, full-time, or freelancer? The salary of hiring a CFO is relatively higher than any other accounting professional in your business.
If you are ready to bear the costs of keeping an in-house CFO, you can go for it. Otherwise, several outsourcing firms help you find the most deserving CFOs for your company. Additionally, you pay only for the services and exclude all extra costs like employee benefits, pensions, etc.
A CFO can bring notable changes to your company’s operations and profits margins. You can reach your goals efficiently, bring in capital, speak fluently with the stakeholders, and avail lots of other benefits.
