/ OVERVIEW: As in past years, we have approached over 1,000 PE CFOs in North America to review key hiring criteria, compensation norms, and the differences between the CFO role in a corporate and PE environment. This year, we have also added some questions which provide a perspective on the CFO/PE Firm relationship, expectations for 2019 performance, and potential trouble spots on the horizon.
We are pleased to share with you the results of our 2019 Private Equity CFO Survey. As in our previous surveys, we explore compensation norms, investment and governance trends, the relationship between CFO and PE investor, and the differences in the CFO role between public and PE owned companies. This year, we also asked respondents to gaze into their collective crystal ball and share their views on micro and macroeconomic issues.
/ METHODOLOGY: During January/February 2019 (following up on its Q4 2016 AND Q4 2017 surveys), Vardis contacted the CFOs of more than 1,000 North American Private Equity Portfolio companies to review job content, differences between Private Equity and traditional finance roles, compensation, and expectations. We appreciate the time and consideration of those who responded.
/ A FEW OF 2019 SURVEY HIGHLIGHTS
- Compensation Gains – average base salaries are up 6% year over year. Total CFO cash compensation (base and annual bonus) for companies $100M - $500M up 17% to $448k.
- Demand for Experience Outpacing Supply – 70% of CFOs cite “previous CFO experience” as key to their hiring and 50% have previous experience as CFO in a PE-owned company. With everyone looking for experience, the average CFO is getting 4-5 approaches each month for new CFO roles.
- Sky-High Expectations – despite high debt levels, the potential for US recession, foreign trade concerns, etc., 78% of respondents expect 2019 results to be better than 2018 with 29% expecting “much better.”
- How Long Will it Last – responses cite a tight employment market and the burden of increased expectations as cause for concern. As one response put it, “My company has been bought and sold twice at significant gains and now we have a new (private equity) owner. I don’t see how it can last.”