1. 2007 Financial Executives Compensation Survey Cheryl Graziano Vice President of Research and Operations Financial Executives Research Foundation

2. Financial Executives Research Foundation (FERF) Who we are: – The independent research affiliate of FEI. What we do: – Help members learn from other members. How we do it: – Tax-deductible contributions from corporations, FEI chapters and individuals. – Research publication sales/subscriptions

3. Financial Executives Research Foundation (FERF) What we offer: – We help FEI members learn from other members – Financial Executives List Exchange (FELIX) – ask your peers about topics such as Internal Control Procedures, Tax Preparation and Audit Fees for Private Companies, FAS 123R, Asia and China Telecom Challenges, and more – Research Forum Newsletter – Financial Executive magazine articles – Research reports, alerts, surveys – Continuing professional education credits – All accessible from the FEI website as part of FEI membership

4. The Survey Electronic survey e-mailed to 9,062 active FEI members Members were asked 27 questions in five key areas: – Demographics, – Compensation, – Long-Term Incentives, – Retirement Benefits, and – Other Compensation Benefits. 1,844 members responded (20% response rate

5. Respondent Profile

6. Industry and Location of Company Headquarters Almost one third (32% or 598) of the responses came from members from three industries: Banking/Financial Services, Manufacturing and Technology. Many responses (42% or 771) came from members who worked for companies headquartered in: – California (15% or 275), – Illinois (6% or 110), – Massachusetts (7% or 121), – New York (6% or 110), and – Texas (8% or 155).

7. Private Company Titles 907 responses = 49% total Corporate CFO Corporate Controller Divisional CFO Treasurer Other VP Finance Divisional Controller

8. Private Company Job Responsibilities

9. Private Company CFO Compensation proportionate to the annual revenues of their employers Median annual base salary is in the $176,000 to $200,000 range Median annual bonus target is between 31 and 40% of base salary CFO oversees a median of 10-50 finance/accounting employees or FTEs 554 responses

10. Private Company – CFO “Direct Reports” Median Compensation Corporate and Divisional Controllers $100,000 – 125,000 VP Finance and Divisional CFO $126,000 to $150,000 Treasurer $151,000 – 175,000 PLUS ++ Annual Bonus Target of 21-30%

11. Private Company Financial Executives California CFO state median = national median – Annual base salary range $176,000 to $200,000 plus 31 and 40% bonus (78 CFOs) Other titles state medians > national medians – Corporate Controllers at $126 to 150K salary – VP Finance at $151 to 175K salary

12. Public Company Titles 842 responses = 46% total Corporate CFO Corporate Controller Divisional CFO Treasurer Other Divisional Controller VP Finance

13. Public Company Job Responsibilities

14. Public Company CFO Compensation proportionate to the annual revenues of their employers Median annual base salary is in the $251,000 to $275,000 range Median annual bonus target is between 41 and 50% of base salary CFO oversees median of 10-50 finance/accounting employees or FTEs

15. Public Company – CFO “Direct Reports” Median Compensation VP Finance, Corporate Controller, Divisional CFO all earn $176,000 to $200,000 PLUS ++ Annual Bonus Target of 31-40% Treasurer $176,000 to $200,000 PLUS Bonus of 41-50% Divisional Controller $126,000 to $150,000 PLUS Bonus of 21-30%

16. Public Company Financial Executives California CFO state median = national median – Annual base salary range $251,000 to $275,000 plus bonus between 41 and 50% (56 CFOs) Other titles state medians > national medians – Corporate Controllers at $176 to 200K salary – VP Finance at $226 to 250K salary

17. Long Term Incentives 409 members (split between public and private companies) receive cash- based awards 1,096 received stock-based awards – 665 based on fixed number of shares in options or restricted units – 309 also get dividends

18. Retirement and Other Perks 384 are eligible for defined benefit plan (60% from public cos.) 148 have supplemental db plan 171 have supplemental defined contribution plan Most popular perk: Company car or car allowance (578 responses or 34%) Most popular employment contract provision: Change-in-control/severance (604 or 35%)

19. Questions? Suggestions for follow research on this project? Suggestions for other types of research?

20. Stay in Touch Cheryl Graziano Vice President Research and Operations FERF (973) 765-1064 cgraziano@fei.org