Crains New York - July 30, 2012 - (Page 13)

REPORT C O R P O R AT E F I N A N C E INSIDE Spotlight What’s hot in CFO compensation? Performance-based stock PAGE 15 The List The highest-paid chief financial officers in the New York area PAGE 15 It all adds up to higher CFO pay Base salaries and performance awards on the rise; cash bonuses down BY DIANE HESS New York-area chief financial officers are expected to make more money in 2012 than they did a year ago. Advisers on executive pay predict that CFOs at public and private companies could earn 5% to 10% more this year than they did in 2011, as the economy stabilizes and they continue to play a crucial role, not only as financial bookkeepers but also as corporate strategists and intermediaries. “It’s not just about being the comptroller anymore; CFOs are at the intersection of shareholders, boards, ratings agencies and the press,” said Alan Johnson, managing director of Johnson Associates, a boutique compensation consulting firm. “You have to be a renaissance person, multifaceted.” One effect of the financial crisis has PORTION of S&P been an effort 500 CFOs who by companies received stock to respond to options in 2011 the public outcry over outsized bonuses, while still tying compensation to company performance. Public companies in particular—subject to new proxy disclosure rules and shareholder “say on pay” votes—have been aligning executive pay with individual and company performance. On Wall Street, Mr. Johnson said, “CFO is a seven-figure job,” but added that “at least half of that amount is in restricted stock or options, which tie you to the firm.” Still, base salaries for public companies are on the rise, as are performance-based equity awards, while cash bonuses have fallen. According to a nationwide survey by the Financial Executives Research Foundation, sponsored by compensation advisory firm Grant Thornton, the average base salary in 2012 is $286,500 for public MAKING PLANS: Players in the startup arena, such as Near Earth’s Ian Fichtenbaum, are beginning to plot out how they might benefit from equity crowd funding. 70% david junkin Funding draws a crowd New law will allow startups to raise cash without help of venture capital firms BY STEVE GARMHAUSEN It’s no surprise that space and satellite ventures have a tough time raising money. Last year, Manhattan-based boutique investment bank Near Earth, which caters to the industry, tried to raise capital for NanoRacks, a company that builds research labs for the International Space Station. Near Earth Vice President Ian Fichtenbaum likened the process to “hitting at the back of a ketchup bottle.” But help for firms like NanoRacks may be on the way in the form of a new law that will allow small firms to offer equity through crowd funding. The law has yet to go into effect—it awaits Securities and Exchange Commission rule making—but it has already spawned a fierce debate about likely winners and losers. Some warn that fraud and administrative headaches will hurt investors and businesses THE SOURCE Companies can sell investors the greater of $2,000 or stock equal to 5% of investors’ income or net worth if their income or net worth is less than $100,000 alike. Others say crowd funding poses a stiff challenge to venture capital firms, which have had free rein over startups. “They’d better recognize that they’ve got to reinvent themselves,” said Cliff Schorer, who is entrepreneur in residence at Columbia Business School’s Eugene Lang Entrepreneurship Center. The Jumpstart Our Business Startups Act of 2012, which became law in April, will allow small companies to advertise and sell up to $1 million a year in private stock online to See DRAWING on Page 14 See IT ADDS UP on Page 14 July 30, 2012 | Crain’s New York Business | 13

Table of Contents for the Digital Edition of Crains New York - July 30, 2012

Crains New York - July 30, 2012
Contents
In the Markets
The Insider
Business People
Real Estate Deals
Opinion
Alair Townsend
Greg David
Small Business
Corporate Finance
Classifieds
For the Record
From Around the City
New York, New York
Source Lunch
Out and About

Crains New York - July 30, 2012