Why is our Management Accountant getting paid more than the Finance Director?

OK there’s a problem if that’s actually the case!

But we are seeing a strange phenomenon playing out.? There has been major upward pressure on the salary of your Management Accountant, Financial Accountant and FBP in the last 3 years.

Year on year salary inflation across the midfield of finance has been in and around double digits… so a ￡40k role became ￡50k+ almost overnight. ?

Minimum / national living wage is propping up the entry level of the market. So salaries in transactional finance have also bumped significantly.

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Good news right – well yeah – that is good news, ‘cos cost of living innit… and as long as there isn’t a wage / inflation spiral and interest rates continue to amble their way down then it should all settle – and that plateau is about where we are now,

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But what’s happening at FD level?

Well not that much actually.

There just hasn’t been the same level of northern pressure on FD salaries.? So where your newly qualified MA might have seen themselves with an extra 25% versus their 2021 counterpart the FD has maybe seen 5-10% salary increase (if they’ve in fact seen any more dollar at all!)…

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As a rule, FD’s tend to be more risk averse when it comes to their own career moves. ?With the pollical, economic balls in the air and the tail of the covid chaos still relatively fresh in their minds many senior finance folk took the decision to sit tight.

And that is a decision – the decision to do nothing major.? If they were in a decent business with a sensible take home pay and reasonable job security then lots took the stance of better the devil I know.?

They made their beds and lay in them.

So the merry go round of recruitment was spinning with less blistering speed as the mid tiers of finance. It was still turning gently but no one was spinning off wildly and grazing their knees or being hit square in the face by the metal handles.

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And it’s that slight stuttering of movement that meant demand wasn’t anywhere near as furious as the fierce requirement for management accountants and finance managers.

And the salary needle didn’t move as far.

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What’s gonna happen now then? Because the MA, FC and FDs salaries look hella close to eachother…

Why take the pressure and exposure of the FD role if the FC gets the same coin once the tax man has had a chunk of change?

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Well it’s hard to know.?

Other than a deep recession salaries for MA’s has never really been forced downhill so unless we get a 2009 drop off they are likely to be the new norm.

So, what will more likely happen is that they will have a period of steady 2-3% incremental annual increases and perhaps FDs might creep slightly ahead at 4-5% and pull away.

I’m also seeing FDs suck up the base salaries but expecting much more clear and chunky LTIPs with big bonuses or equity options… They might perhaps be wanting to tag on car allowances or family healthcare etc etc more than usual.

It should come back in line but for now that’s how it looks!

So if you are and FD looking for a move the salaries might be looking lighter than you hoped but the benefits might be more attractive maybe.? If you are a Management Accountant that hasn’t moved for a while you might be happily surprised with the amount you are valued in the market.

Thanks as always for reading! John

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