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Annual CFO Index Reveals Significant Increase in Turnover

Spencer Stuart’s 2014 study shows significantly more CFO transitions since 2012
January 2015

[New York] — Turnover of Fortune 500 CFOs has seen a substantial increase in 2014, with 20 more transitions than just two years ago, according to the latest CFO Index by executive search consulting firm Spencer Stuart. As for who succeeds these outgoing CFOs, internal placements (61%) continue to outpace external placements, but 2014 did see the largest percentage of external placements (41%) since the 2009 CFO Index.

“While the higher CFO turnover may seem surprising, it actually makes sense if you look at what has transpired over the past few years,” said Joel von Ranson, leader of Spencer Stuart’s Financial Officer Practice in North America. “Following the economic downturn several years ago, more CFOs opted to stay in their roles to help see their organizations through a difficult period and remained in their roles until things were on a more solid footing.”

CFO Tenure Also on the Increase

In 2014, average tenure of Fortune 500 CFOs was 5.8 years, up nearly a full year since 2008. As for any correlation between tenure and turnover, 56% of CFOs have been in the role less than five years. According to the CFO Index, most turnover occurs during the one- to five-year time frame.

Primary Route Up for CFOs

Accounting/control and divisional finance are the most common routes up to the CFO seat. There was also an increase in the number of CFOs with investment banking backgrounds. CFOs who are promoted from within the organization are likely to come from accounting and controls backgrounds. As for external hires, division finance and financial planning and analysis experience tend to be more common. Demand for sitting CFOs among companies hiring externally is 55%, up from 39% in 2006.

Other CFO Index Findings
  • 24% of sitting CFOs had prior public company CFO experience.
  • There has been a consistent increase over the last nine years in diversity with 58 (11.6%) women and 18 (3.4%) people of color who are Fortune 500 CFOs.
  • While 29% of CFOs sit on outside public company boards, only 10% sit on the board of a Fortune 500 company; 2014 saw the largest decline in CFOs on external boards since 2006.

About Spencer Stuart

Spencer Stuart is one of the world’s leading executive search consulting firms. Privately held since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients — ranging from major multinationals to emerging companies to nonprofit organizations — and address their leadership requirements. Through 55 offices in 30 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive management assessments. For more information on Spencer Stuart, please visit www.spencerstuart.com.

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