As some of you may have read in our May newsletter, we performed an analysis of S&P 500 CFO pay trends. Beginning in 2007, companies were required to disclose the pay of not only their CEO but also their CFO as part of their Top 5. As a result, we now have two full years of pay data for CFOs at the vast majority of publicly traded companies.

Especially interesting in the analysis this year was the fact that the rate of growth of CFO pay (5.2%) was over three times faster than the rate of growth for CEOs (1.3%). So what’s going on? The glass-half-full view would be that CFOs, with the adoption of Sarbanes-Oxley, have much greater responsibilities than ever before. As a result, it’s much harder to recruit CFOs and, therefore, you need to pay them more.

Cynics, on the other hand, will argue that the required disclosure of CFO pay is itself causing the ratcheting-up of pay. CFOs who now know what their counterparts are making at other public companies may experience increased pay envy, or may believe that the disclosed pay information of their peers is only the pay floor and that actual pay should only go up from there. Is this an unintended consequence of greater disclosure under the new SEC compensation disclosure rules?

It’s most likely a combination of the two factors and others that I’m not even thinking of. At any rate, I thought it would be interesting to point this out and see if this trend continues into the year.