The energy sector has experienced extreme volatility since 2020, marked by dramatic market swings and significant leadership changes. In particular, U.S. public energy companies have seen unusually high turnover in the chief financial officer (CFO) position.
This analysis examines how that turnover has affected CFO total compensation across energy sub-sectors, including oil and gas, renewable energy, and utilities, and how these trends compare to those of other industries.
The Surge in CFO Turnover Across the Energy Sector
CFO turnover hit record levels in the early 2020s across the corporate world, and the energy industry was no exception. According to a Russell Reynolds study, global CFO departures reached an all-time high in 2023 at about 16.2% turnover, with 2024 seeing slightly lower rates at 15.1%. U.S. companies, including those in energy, mirrored this trend, with the S&P 500 seeing its highest CFO turnover in six years in 2021 and again in 2024.
Several factors drove this volatility, including a wave of CFO retirements post-pandemic, CEO transitions prompting finance leadership changes, and burnout from navigating economic upheavals.
Why Energy Was Heavily Impacted
Energy companies experienced many CFO departures following the 2020 oil demand collapse and the resulting wave of bankruptcies. Even major players implemented cost-cutting measures, slashing executive base salaries by 20% to 50% to preserve cash. As markets rebounded in 2021 and oil prices recovered, some CFOs who had steered their firms through the crisis chose to exit or retire, contributing to continued high turnover. By 2023, Fortune 1000 firms were seeing 17% more CFO changes than the year prior.
CFO tenure in energy sub-sectors has also been short. A recent study by Finance Market Research found that CFOs in the utilities industry, a key sub-sector of energy, have an average tenure of just 2.7 years, while those in less volatile sectors tend to have an average tenure of 3.5 years. It was anticipated that ongoing industry volatility and consolidation would present retention challenges for CFOs leading into 2024 and 2025.
This “CFO carousel” in energy reflects the sector’s rapid shifts — from oil price crashes to renewable growth spurts — which have demanded different financial leadership skillsets at different times.
How CFO Turnover Impacts Compensation
When CFO churn is high, companies must pay a premium to attract qualified replacements and incentivize stability. As such, energy sector CFO compensation packages have risen significantly from 2020 to 2026.
Energy companies sharply increased CFO compensation after the pandemic-related downturn, and Finance Market Research found that CFOs saw the highest year-over-year pay increase among C-suite roles from 2022 to 2023. In effect, companies have been hiking CFO pay to enhance retention.
Total Compensation
Total compensation for energy CFOs, including salary, bonuses, and equity, has trended upward since 2020. An Equilar analysis of S&P 500 firms found that the median energy CFO total compensation was roughly $4.9 million in 2020, climbing to $5.9 million by 2022. As oil prices and energy profits roared back from 2021 to 2022, finance chiefs were rewarded accordingly.
Incentive Compensation
A key feature of executive pay is its heavy emphasis on incentive compensation. On average, upwards of 80% of an energy CFO’s total pay comes from annual bonuses and long-term equity awards rather than salary. When company performance improves, CFOs earn more. In lean times, pay might shrink. The post-2020 boom in energy earnings led to high bonus payouts and equity gains. In fact, oil and gas firms paid annual bonuses far above targets during the rebound. For example, median bonuses for 2022 performance in one industry sample were roughly 159% of target.
Long-term incentive (LTI) grants are also on the rise, as energy companies have increased CFO stock-based awards to keep pay competitive. Average LTI grant values rose by more than 10% from 2023 to 2024. A similar trend again occurred in 2025. These richer equity grants, coupled with strong stock price recovery, positioned energy CFOs to reap significant rewards if performance goals were met.
Base Salaries
Meanwhile, base salaries grew at a more modest pace, roughly tracking inflation. In 2022 and 2023, approximately 75% of public company CFOs received base salary increases between 4% to 5% each year, and energy companies saw similar adjustments. By 2023, a typical energy CFO’s salary might comprise only ~15% of total pay, as companies have been reducing cash components and placing greater weight on stock-based incentives. Stock options made a comeback as well, with the prevalence of option grants rising over 10% in 2022. This reflects an effort to tie CFO rewards directly to the company’s long-term performance and shareholder returns.
Retention Concerns & Incentive Realignment
The concurrent rise in CFO turnover and pay suggests that energy companies are increasing compensation to enhance retention. Executive recruiters note that experienced CFO talent is in hot demand, and companies fear losing their finance leaders to competitors or retirement. Organizations are also increasingly hiring experienced CFOs who require higher compensation packages.
However, while companies are paying more to secure CFOs, retention problems persist. High pay alone does not guarantee tenure. Surveys indicate CFOs value work-life balance and strategic influence, so firms are pairing compensation with other offerings, such as greater decision-making autonomy and flexible work arrangements. Nonetheless, the immediate response to the turnover crisis has been higher pay.
How CFO Trends Compare Across Industries
Energy is not the only industry facing high CFO turnover. Healthcare and technology companies have seen finance chiefs depart at elevated rates, and their compensation trends contrast with those of the energy sector.
Turnover
- Healthcare: Annual CFO turnover rate of 22% as of 2024, and 71% of healthcare organizations have changed their CFO since 2020, according to Russell Reynolds.
- Technology: Annual CFO turnover rate of 19%, higher than most industries and second only to healthcare.
- Energy: Annual CFO turnover has been high, but somewhat more episodic.
All three sectors are grappling with CFO retirements and intense market pressures that make the role challenging.
Compensation
- Healthcare: CFO compensation has steadily risen, with median pay averaging $5.4 million in 2022, up from roughly $4.2 million in 2020.
- Technology: CFO pay pulled back slightly after spiking during the tech boom, with median total compensation coming in at ~$5.3 million in 2021 and $4.8 million in 2022.
- Energy: CFO compensation has recently edged ahead of competing industries, thanks to the energy market upswing.
In all sectors, the pattern is clear: CFO compensation has been rising as their role becomes more demanding and turnover-prone. Companies in energy, technology, and healthcare know they must offer competitive pay to keep their finance chief or attract the next one.
The Future of Energy CFO Compensation
Going forward, we expect boards in the energy sector to continue fine-tuning CFO pay packages to be competitive but also accountable. The trends of the early 2020s — high CFO turnover and rising CFO pay — seem likely to persist as the business environment remains fast-changing.
The energy industry’s experience in particular underscores a broader lesson: in the battle to attract and retain top financial leadership, compensation is crucial, but most impactful when combined with a strong company culture.
Connect with CBIZ Compensation Consulting to discuss how industry-specific trends impact your executive compensation strategy.
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