Average treasury and finance corporate practitioner salaries increased 3.3% in 2011, a full point above the national average for white-collar workers in other roles. This continues the trend seen in recent years in North America highlighted in the previous two ‘AFP Compensation Surveys’, which revealed a 2.8% increase overall in 2010, and a 2.5% increase in 2009.
The upward trend can largely be attributed to an increase in treasury departments’ responsibility in recent years, noted Tom Hunt a certified treasury professional (CTP) and director of treasury services at AFP. “As treasury departments are continually asked to do more with less, this translates into treasurers continually making sure they attract, retain and develop their staff in the most efficient and effective means possible,” he said. “Many companies look at career development programmes internally and develop rotational programs, job sharing and internships in addition to compensation structures to keep their employees engaged.”
Salaries Go Up
The treasury management tier saw the most growth in 2011 at 3.7%. Cash managers saw the biggest boost in this group at 4.5%, followed by assistant cash managers at 4.4%. This tier saw 2.7% growth in 2010 and 2.5% in 2009.
Staff level financial professionals were second with 3.5% growth. For the second year in a row, financial analysts came in at the top of this group, earning 3.8% more on average. ‘Junior’ accountants (accountant I) followed with an increase of 3.7%. The staff level saw 2.9% growth in 2010 and 2.7% growth in 2009.
The executive level was next at 3.3%. Directors of treasury/finance led this group at 3.8%, followed by CFOs at 3.6%. Salaries for the executive tier grew 3.2% in 2010 and 2.5% in 2009.
Support level staff was the least growth at 2.4%. This is also the only tier where growth slowed down slightly from the previous year; growth was 2.5% in 2010. However, the 2011 figures are still a significant improvement from the 2009 average of 1.9%.
Salaries are influenced by a number of factors, including an employee’s level of education and whether or not he or she possesses a professional certification. Other factors such as geographic location and industry can influence earnings.
Bonuses are generally seen as an important component of treasury and finance professionals’ compensation packages. More organisations awarded bonuses in 2011 than in the two previous years, according to the ‘2012 AFP Compensation Survey’.
Fully 72% of organizations awarded incentive-based compensation bonuses to practitioners in 2011, compared to 65% in 2010 and 71% in 2009. Ninety-one percent awarded cash bonuses and 34% awarded stock option bonuses.
Financial professionals received bonuses equivalent to 17% of their base salary on average, a percentage point more than the 16% reported in 2010 and three points higher than 2009’s average of 14%.
The executive tier saw the greatest bonus increase in 2011, both in terms of dollar amount and as a percentage of their base salary. Executive bonuses were $56,300 on average, which is about 34% of salary. That’s up from $47,700 and 30% in 2010 and $46,800 and 30% in 2009.
Management level was next at $18,700, or 19% of base salary. The total amount is down slightly from the $19,100 and 16% average in 2010, but up significantly from the $12,900 and 13% in 2009.
Staff level bonuses were $5,500 or 9% in 2011, down slightly from the 2010 average of $6,100 and 10% but equal to the 2009 average.
Support staff again saw the least growth. Bonuses in 2011 averaged $3,600 or 7%, down from $3,900 and 8% in 2010 but up from $2,900 and 6% in 2009.
Organisations generally relied on financial metrics when determining bonuses in 2011. Fifty-eight percent of organisations awarded bonuses based in part on the operating income of earnings before interest, taxes, depreciation, and amortisation (EBITDA) targets. Fifty-two percent awarded bonuses based on completion of specific projects. Other factors considered included profits or increased profit margins (50%), cost control/reduction targets (31%), sales or revenue targets (30%) cash flow or cash flow targets (26%) and customer satisfaction (16%).
Several factors help determine treasury and finance professionals’ potential for promotion, chiefly increased job responsibility, according to 66% of respondents. Other factors include an employee’s contribution or profitability (52%), holding a professional designation such as AFP’s CTP accreditation (51%) and earning an MBA (30%).