Finance Leadership Market Trends: CFOs Laying the Groundwork for Growth
Authored By Adam Boone, Matt Sommi
As the private equity landscape continues to evolve, the demand for exceptional CFOs is reaching new heights.
At Bespoke Partners, we’ve analyzed the latest market trends to understand what kind of CFOs are in demand and the skills they bring to the table.
Katelyn Quaresma, Partner at Bespoke and head of our finance executive search practice shared,
“It continues to be a very tight market for good talent out there. The CFO has tremendous influence over the business, and I think a good CFO makes the difference, the make or break, on an investment thesis that really makes the difference for the outcome of the asset.”
Our latest report, Private Equity Talent Report: CFO Leadership Trends, considers the cautiously optimistic view of the recovery of SaaS businesses, suggesting that now is the time for CFOs to lay the groundwork for growth.
Download the full report here: www.bespokepartners.com/private-equity-talent-report-cfo-trends.
2H2024 Deal Flow & M&A Acceleration?
Many industry observers and our sources are predicting a pickup in deal-flow and M&A transactions in the latter half of 2024. This expectation is bolstered by:
Increased Hiring for Finance Roles:
There has been a substantial increase in searches for VP of Finance and Controller roles, indicating that CFOs are preparing their teams for an influx of deals and M&A.
Stable Finance Teams:
The stability at the top of finance teams is encouraging for firms looking to grow through M&A, as a robust finance department is essential for successful transactions and inorganic growth.
EBITDA is Still King
When it comes to valuing firms, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) remains the metric of choice. This financial measure is prized for its ability to provide a clear picture of a company’s performance and growth potential.
CFOs who can develop strategies to optimize EBITDA are in high demand because they can significantly enhance a company’s valuation and ensure efficient capital use.
In-Office Work is In-Demand for Finance Professionals
The role of the CFO has shifted back toward in-office work to enhance communication and effectiveness. Our experience shows that many finance executives prefer working in-office for several reasons:
Enhanced Communication:
Being in the office improves communication with the C-suite and other key stakeholders.
Operational Efficiency:
In-person collaboration is seen as more effective for managing the day-to-day operations and strategic initiatives.
CFO Compensation Trends
Our data from 332 public and private software and SaaS companies reveals significant insights into CFO compensation.
As company revenues increase, so do CFO compensation packages, ranging from $380,000 average On-Target Earnings (OTE) at the sub-$50 million revenue level, to more than $1.1 million in OTE for companies over $1 billion in revenue.
CFOs are among the highest compensated professionals in the C-suite, second only to CEOs and, in some cases, GTM (Go-to-Market) executives. This compensation reflects their critical role in driving financial performance and supporting the firm’s investment thesis.
Equity Incentives and Turnover Stability
Equity incentives remain a powerful tool in CFO compensation, aligning their goals with the company’s strategic objectives.
Finance executives receive equity packages that are typically 13 times their OTE, highlighting the value they bring to their organizations.
Additionally, our Executive Turnover Index shows that finance leadership roles are among the most stable, with minimal turnover. This stability suggests that firms are confident in their finance leaders and are focusing on building strong teams to support future growth.
High Demand Skill Sets for CFOs
The current market demands CFOs who excel in resource management, capital allocation, and operational discipline.
CFOs with a background in Financial Planning and Analysis are particularly valuable in today’s economic climate, which emphasizes capital-efficient growth.
Operational CFOs, who have a proven track record of building high-performing finance teams and systems, are especially sought after. These professionals can effectively lead and operate finance departments to achieve the firm’s investment goals.
Looking to hire an exceptional CFO?
Find additional information on Bespoke’s CFO practice here: High-Impact Finance Executives – Bespoke Partners
Strategic Dealmakers in Demand
As the market prepares for a resurgence in M&A activity, there is growing interest in CFOs with strategic backgrounds who can identify and execute deals. These CFOs are crucial for capturing value and driving growth during the recovery phase.
Contact Bespoke Partners today to get your complimentary copies of our other Private Equity Talent Reports: https://www.bespokepartners.com/private-equity-talent-report/.
Bespoke Partners Named in Top 10 of the “Top 49 Retained Executive Search” 2-Years Running by C-Suite CV Secure.
Author:
Adam Boone
Chief Marketing Officer
Boone has led marketing, demand generation, branding, product management, services marketing, or alliances marketing programs for numerous successful companies including Avaya-acquisition Sipera, Sequoia start-up Syndesis, Subex, CoManage, and others. He has driven joint marketing programs and go-to-market initiatives with iconic industry leaders including Microsoft, IBM, GE, AT&T, Oracle, Comcast, Cisco, Ciena and Samsung.
Boone holds an MBA in Business Strategy from the WP Carey School of Business at Arizona State University and completed the Competitive Marketing Strategy Program at the Wharton School at the University of Pennsylvania.
In his personal time, Boone enjoys travel, fine food and wine, mountain biking, playing and listening to music, and movies.
Author:
Matt Sommi
Senior Vice President
Based in Philadelphia, Matt helps lead Bespoke’s client engagement efforts across the firm’s suite of services.
Prior to joining Bespoke, Matt spent 8 years in research and business development at GLG, supporting private equity due diligence efforts and building relationships with GLG’s middle market private equity firms.
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