To better understand the forces influencing the recruitment and retention of Healthcare CFOs, JM Search recently surveyed CFOs across the healthcare industry to capture insights into the current state of the CFO talent market. With a notable emphasis on private equity-backed businesses within the middle market, the study revealed the following four key findings.

Fair Compensation Ranges

Determining what qualifies as “fair” compensation for CFO talent has become increasingly standardized across the healthcare middle market but remains critical for attracting top executives. According to our findings, over 70% of middle market CFOs earn a base salary of between $300,000-$400,000, with more than half of survey respondents targeting a 50% annual bonus or more. Just 17% of surveyed CFOs earn less than $300,000. As expected, these compensation findings were heavily concentrated, with limited variations due to company size, sector, or geographic location.

Return-to-Office Trends

A growing percentage of healthcare CFOs are interested in hybrid and remote work arrangements, highlighting the importance of return-to-office flexibility on the part of employers looking to attract top-tier healthcare CFO talent. Based on our study, 24% of 2023 CFO hires currently work remotely, with more than 50% continuing to enjoy a hybrid structure. However, those who do choose to return to an office environment may enjoy an edge in compensation, with 54% of in-office CFOs reporting a merit-based boost in pay in 2023 vs. just 33% of their remote counterparts. Flexibility and continuous assessment of market trends will be critical to successful CFO talent attraction and retention strategies in healthcare as the market normalizes.

Attracting Multi-time CFOs

Proven experience counts in the CFO role, especially for investor-backed businesses. Our study found that experienced CFOs who have been through multiple transactions for an investor-backed business typically command greater equity as part of their compensation in the marketplace when compared to first-time CFOs. According to our findings, 70% of CFOs with no prior transactions on their resume received 1.25 percent of equity or less, while 45% of those with two or more transactions on their resume received more than 1.25 percent. This trend does not carry through to base salaries, however, suggesting that multi-time CFOs are willing to bet on themselves and make the long-term play that comes with greater equity ownership, offering their employers a way to promote retention and commitment to growth. It is also worth noting that more experienced CFOs are much less likely to work in the office compared to first-time CFOs, reflecting that proven experience can often combat the challenges associated with being a remote employee.

CFO Retention

Finally, retention remains a key concern for employers across the healthcare ecosystem, especially given that the demand for CFO talent remains high with many executives continuing to explore opportunities outside of their current employer. In our research, more than 60% of middle market healthcare CFOs said that they have considered a role with another company in the last six months. Why? It is not necessarily related to compensation, which nearly two-thirds of respondents confirmed that they view their current compensation “competitive,” but instead more fundamental concerns about the financial position of their current companies and changing market dynamics. This is not surprising given macroeconomic factors, such as slowed deal flow, increased interest rates, and general economic uncertainty hitting everyone in healthcare. For employers, equity can help with retention in these situations, with increased transparency around valuations, equity value, and adjustments in holding periods all playing a positive role.

For more information about these findings and the study methodology, please download JM Search’s full Chief Financial Officer (CFO) Compensation Study.

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