Barney & Barney Annual Survey of CFO and Board Compensation For California Companies Shows Strong Increases

SAN DIEGO--(BUSINESS WIRE)--Annual compensation for corporate board members increased in 2011 to a range of $106,000 to $135,000 in major California markets, while total pay for Chief Financial Officers (CFO) also rose to a range of $562,000 to $964,000, according to a survey of publicly traded firms analyzed by the Compensation Consulting Practice of Barney & Barney.

“Board of Director and Chief Financial Officer pay is on the rise statewide, with regional and industry differences considerable in some cases”

“Board of Director and Chief Financial Officer pay is on the rise statewide, with regional and industry differences considerable in some cases,” said Matt Ward, National Practice Leader of Barney & Barney’s Compensation Consulting Practice. “The analysis produced a number of surprises, such as the significantly higher total compensation for life sciences CFOs than technology CFOs in the San Francisco-Bay Area.”

The annual State-of-Pay Reports by Barney & Barney focused on firms in California’s largest coastal markets. In San Diego, the report focused on all publicly traded companies of any size. In Orange County/Los Angeles, the reports focused on all mid-sized, publicly traded technology companies. In the San Francisco-Bay Area, the reports covered mid-sized technology and life sciences firms.

Some Board Pay Jumps by Double-Digits

Total annual compensation, which includes cash and equity, ranged from a median of $106,000 to $135,000. The largest median increase – a 15% gain – occurred for Board of Directors of Orange County/Los Angeles technology companies. Compensation was balanced between cash and equity. Only Bay Area technology companies, at median, paid less than 50% of compensation in the form of cash.

Board of Directors by Geography	Total Comp.	Year-Over-Year Change
San Diego	$118,300	3%
Orange County/LA (technology only)	$106,400	15%
SF-Bay Area (technology only)	$135,300	10%
SF-Bay Area (life sciences only)	$127,200	(4%)

Other key findings:

Additional compensation for Board Chairs ranged regionally at the median from $16,000 to $30,000. Lead Directors received additional compensation ranging regionally from a median of $9,000 to $15,000. Bay Area life sciences companies paid the highest additional compensation for both positions.
Audit Committee chairs received the most additional compensation, ranging regionally from a median of $15,000 to $22,000, followed by the chair of the Compensation Committee, which earned a median of $10,000 to $15,000 of additional compensation. The Nominating Committee Chair was paid the least additional compensation, ranging regionally from $6,000 to $10,000.

CFO Compensation Climbs Solidly

Total direct compensation, which includes cash and equity, was highest for Bay Area life sciences companies at $965,000 and lowest at $563,000 for technology companies in Orange County/Los Angeles. San Diego technology companies had the highest increase in total direct compensation, up over 8% from the prior year. CFO pay at Bay Area technology companies was flat.

Chief Financial Officers by Geography	Total Comp.	Year-Over-Year Change
San Diego	$840,800	8.1%
Orange County/LA (technology only)	$562,800	4.9%
SF Bay Area (technology only)	$805,500	0.0%
SF Bay Area (life sciences only)	$964,700	7.2%

Other key findings:

Median base salaries increased slightly, ranging regionally from a median of $289,000 to $360,000. Median salaries rose from 0.1% to 2.9% regionally. Bay Area life sciences companies had the highest median salaries overall. Median merit increases ranged from 4.0% to 6.3%. Bay Area life sciences companies again had the highest median merit increase at 6.3%. Slightly over half of the companies provided merit increases to CFOs.
Bonuses for CFOs ranged regionally from a median of $73,000 to $121,000. Median bonuses were down at Orange County/Los Angeles and Bay Area technology companies. Bay Area life sciences companies had the highest median bonuses. The median target bonus opportunity was 40% to 50% of base salary, while the actual bonuses as a percentage of target varied significantly across regions. Bay Area life sciences companies had the highest payout as a percentage of target at 88%. Bay Area technology companies had the lowest at 47%. All regions paid below target bonuses at the median.

Despite significant trends away from stock options nationally, still 25% to 40% of the California companies delivered equity compensation in the form of options only. A significant number of firms granted a mix of stock options and full value shares. Bay Area life sciences companies are the highest users of stock-option only grants at 40%.

To download the reports, visit http://www.barneyandbarney.com/reports/barneyandbarney-form.html or contact the compensation consulting practice at 858.875.6589.

About Barney & Barney

Founded over 100 years ago, Barney & Barney LLC is headquartered in San Diego, with offices in San Francisco, Oakland, and Orange County. For more information, visit www.barneyandbarney.com, or call 800.321.4696. For information about the Barney & Barney Foundation, visit http://www.barneyandbarneyfoundation.org.