Finance executives are top-level managers. They focus on strategically maximizing the bottom line opportunities for a public, private, or nonprofit organization. As leaders in corporate finance, executives supervise every sizable business transaction made to ensure continued economic health. Finance executives can answer to many titles, such as:
- treasurer
- VP of finance
- financial director
- controller
- Chief Investment Officer (CIO)
- Chief Financial Officer (CFO)
Regardless of the letters after their name, finance executives share the responsibility of keeping their company’s departments on budget and seeing green. Finance executives usually occupy a seat on the Board of Directors to provide money-related reports on the effectiveness of business operations. From venture capital to investments and letters of credit, finance executives determine the right changes for better revenue.
Salary
CPA Practice Advisor reported that high demand for finance executives drove a salary increase of 4.4 percent in 2015. Employment survey statistics on Salary.com illustrate that America’s top-division finance executives earn a median annual salary of $257,880. This equates to a median hourly wage of $124. Finance executives also receive an average bonus of $77,023 and benefits package worth $89,263.
Beginning Salary
Executives generally initiate their career in financial analysis jobs where the average starting salary is around $61,650. Newly hired finance executives at smaller companies will likely land in the bottom 10th percentile with base income under $170,862 yearly. However, senior finance executives for large organizations can eventually bring home over $367,082. There’s no upward limit since JPMorgan Chase’s Chairman James Dimon has a $1.1 billion net worth.
Key Responsibilities
Finance executives hold various responsibilities for overseeing the money matters for all departments within an organization. Executives analyze financial reports and ledgers to innovate strategies that could edge the company over competitors. They’ll order internal and external audits to double check that all regulations are running in compliance to industry regulations. Finance executives study current market trends. They advise the senior management team on possible business moves like mergers and acquisitions. Other important tasks include:
- investing capital
- negotiating profitable contracts
- predicting financial risks
- drawing up competitive bid proposals
- tax planning
- paying debts
In tough times, finance executives must also establish procedures to compensate for monetary problems.
Necessary Skills
Succeeding in the cutthroat corporate finance world requires strategic analytical and modeling skills to accurately forecast the company’s monetary growth. Finance executives must have written communication skills to craft detailed reports that align with SEC guidelines. Verbal communication ability is also important. Finance executives need to clearly convey their recommendations to other senior officials. Leadership skills are imperative for executives to manage the work of:
- analysts
- accountants,
- managers subordinate to them
Finance executives must possess the mathematical skills to calculate cash flow and projections on profit performance. Authoritative decision-making skills are also a must-have for executives to set the most effective financial policies for unique business needs.
Degree and Education Requirements
Climbing to the top of the financial industry’s food chain comes with plenty of hard work and education. Finance executives primarily have graduate degrees from prestigious, AACSB-accredited business schools. Start your training with a Bachelor of Business Administration focused in:
- finance
- accounting
- economics
- or a related major
Join the executive track by pursuing a Master of Business Administration in:
- finance
- investment banking
- risk management
Specialized Master of Science in Finance (MSF) degrees are also valuable for honing money management skills without a broad core. Although it’s optional, some finance executives continue into Doctor of Business Administration programs for terminal, practitioner-oriented education.
Pros and Cons of the Position
Even though finance majors across the United States dream of landing executive positions, doing so will reap both rewards and challenges.
On the positive side, finance executives are among the highest paid business leaders with exceptional bonuses and benefits like corporate cars. Ambitious go-getters who love working with numbers and crafting profitable deals would particularly enjoy this career. Finance executives are experiencing job growth as the globalized market rebounds. As part of the C-Suite, executives work in comfortable, climate-controlled settings primarily during regular business hours.
However, finance executives work in a cyclical industry where economic crisis could translate into job loss. There’s tremendous amounts of stress on executives’ shoulders to keep financial performance high. A bachelor’s degree is increasingly becoming insufficient, so investing in advanced education is common. Finance executives have also competed against colleagues for the job, which could spark tension.
Getting Started
Earning a finance degree may be the first step, but it’s far from the last. Budding finance executives need to develop relevant experience through:
- internships
- co-ops
- administrative residencies
Working part-time as a financial clerk or analyst during your schooling will offer insider’s knowledge on corporate finance. Most organizations require finance executives have seven to 10 years of experience. Therefore, you’ll need to increase responsibility up the ladder as:
- an accountant
- credit manager
- risk manager
- auditor
- securities agent, etc.
Certification can streamline the advancement process, especially the Chartered Financial Analyst (CFA) credential. This rigorous, three-exam certification sets the standard for excellence in the finance sector. The CFA Institute also grants the Certificate in Investment Performance Management (CIPM) for “Expert Level” investing knowledge. Joining the Financial Executives International (FEI) may assist with networking too.
Future Outlook
Organizations are facing heightened competition to recruit top financial talent to keep up with economic market growth. Mature companies expanding after the latest downturn. Entrepreneurs are also forming new businesses. A recent Forbes article shared that approximately 543,000 companies are started every month, even though only 50 percent last at least five years. Corporations know that they can maximize their profit and chance at survival by hiring keen finance executives. Therefore, the BLS expects that hiring of finance executives will grow by 6 percent through 2024 with around 146,600 openings. Finance executives could strike gold in various industries including:
- education
- retail
- healthcare
- manufacturing
Controlling a company’s income, expenditures, assets, and working capital is what’s asked of finance executives. These advanced management professionals are promoted to coordinate the overall financial strategy for corporate decisions. Whether they’re heading a bank or hospital, finance executives safeguard their organizations’ operations from significant monetary loss. If you reach finance executive titles, you’ll unlock a lucrative, gratifying career raising and maintaining the funds for global business expansion.
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