The CFO Role in Private Equity:
Chief Financial Officers (CFOs) are a critical part of the private equity team.
CFOs report directly to the CEO. They also have direct access to the professionals at the Financial Sponsor Firms. They frequently work with not just the partners at the Sponsors, but also other team members on special assignments.
Typical Middle-Market Compensation for a CFO in Private Equity
CFO compensation is highly dependent on company size, company and personal performance, and relationship with CEO
A VERY DEMANDING POSITION
As important as the CFO role is in private equity, it is also a very demanding position. The average tenure of a CFO can be as short as 12 to 24 months. CFOs leave for both good reasons (new personal opportunities) and bad reasons (underperformance).
In return for the long hours, great responsibilities and business risks, CFOs can earn significant compensation. Compensation is typically in the form of salary, bonus and equity incentives. Much of the total compensation is performance based – both on the results of the business and the personal success of the individual. When a business does well and there is a successful exit, compensation for the CFO can be substantial and more than what would be achievable in other roles.