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CFO Survey

Survey: 70% of CFOs Exploring Layoff Alternatives; Salary Freezes Most Popular

  • Majority Calling on Boards to Act as Partners in Recession Survival

  • Remain Skeptical of Obama Administration and Policies, But Some Predict Signs of 2010 Recovery

FLORHAM PARK, N.J. and NEW YORK, March 25, 2009 — While confidence in the U.S. economy and leadership remain low among CFOs of American companies, many are speaking out and taking action to protect their own businesses and workforce, according to the most recent quarterly survey conducted by Financial Executives International (FEI) and Baruch College's Zicklin School of Business.

CFOs responding to the 2009 first quarter "CFO Outlook Survey” overwhelmingly declared that they need more from their boards of directors, with four out of five expressing discontent with the current relationship. CFOs also conveyed skepticism over the effects President Obama will have on the economy, with 58 percent reporting they are less confident since his inauguration, and only one-third expecting the stimulus package will help the economy. As CFOs are forced to make tough decisions on cost cutting, half are freezing salaries and using other unconventional measures to avoid layoffs.

The CFO Optimism Index for the U.S. economy in first quarter 2009 continued its downward trend to 38.96 - another all time low and a 47 percent drop from its 2004 high (73.55). Amid the dismal news, the survey revealed a glimmer of encouragement: respondents’ outlook toward their own businesses saw the first incline in more than three years, with an increase to 58.93 from last quarter’s 58.07.

“These are undoubtedly difficult times for CFOs, but this quarter’s survey indicates we may have turned a corner in terms of business outlook,” said John Elliott, Dean of the Zicklin School of Business at Baruch College. “Last quarter, CFOs reported they were undertaking greater responsibilities within their companies; this quarter they have made it clear they cannot do it alone – boards need to work in tandem with CFOs to weather the storm.”

CFOs Freeze Salaries, Mandate Unpaid Time Off to Salvage Jobs

CFOs are undoubtedly faced with massive cuts; however to avoid layoffs, CFOs report they are implementing the following:

o Salary freeze – 51%
o Redistribution of responsibilities – 29%
o Elimination of bonuses – 29%
o Restructuring – 29%
o Salary decreases – 20%
o Shortened work week – 16%
o Mandatory unpaid time off – 11%
o Option to telecommute – 3%

CFOs Need Boards to Act as Partners

Improved collaboration with their board of directors is a priority for many CFOs. When CFOs (whose companies have a board) were asked what they need most from their boards right now, over half said they want their board to act as a partner in exploring ways to get through a challenging economy (54%). Other popular answers included:

o Nearly half want them to collaborate more on solutions to deal with present circumstances (48%)
o One quarter are looking for them to serve as counsel to the CFO (24%)
o One in five wish they would serve as sounding boards for CFO concerns (20%)

CFOs Remain Doubtful on Obama Administration, Stimulus Package

As we journey through the first 100 days of a new Presidential administration, CFOs weighed in on their sentiments toward President Obama’s performance and their thoughts on recent policy. Only 9 percent of CFOs said that President Obama’s inauguration has improved their U.S. economic outlook and increased confidence. Accordingly, more than half (58%) stated their confidence in the economy has actually weakened since the President took office. One third (33%) felt it was too soon to determine. To that end, only one third of CFOs (33%) believe the stimulus package signed into law in February 2009 will aid the economy, while an even smaller percentage (21%) foresee a benefit in the package for their own companies. While support of the package is less than favorable, CFOs of this quarter’s survey identified infrastructure (34%), tax relief (31%), job developments (28%), energy (24%) and health care (23%) as the most important components for their companies. Surprisingly, a relatively small number of CFOs (5%) felt that the package’s components on jobless benefits would help their companies.

“The FEI/Baruch CFO Survey has monitored CFO perspectives on the changing Presidential administration over the past year, and this quarter has revealed that CFOs have many of the same apprehensions about President Obama's policy proposals as they had about candidate Obama's policy platform,” said Marie Hollein, President and CEO, Financial Executives International. “The message from CFOs is that actions speak louder than words – while there is support among them for certain components in the President’s stimulus package, there is an opportunity for more business concerns to be heard. The next few months will be crucial in transforming the relationship and opening the dialogue between CFOs and the administration.”

Signs of Recession Recovery Not Likely Until 2010

While concerns over the U.S. economy intensify, CFOs see no signs of recovery in the current year. When asked when they believe economic indicators - such as bond yields, mortgage interest rates, U.S. unemployment rate and rising GDP - will collectively improve and result in the start of a U.S. economic recovery, an overwhelming majority (83%) predict that signs of a recovery will not begin until the first half of 2010 or later. Specifically, 47 percent see relief during the first half of 2010, 25 percent in the second half of 2010, and 11 percent beyond. Fourteen percent are in the optimistic minority, expecting recovery to begin this year.

Additional Results:

o Top economic concerns for 2009:
o #1 - U.S economic growth (69%)
o #2 - Consumer spending/demand (52%)
o Frequent “other” responses: unemployment, availability of credit and access to capital.
o Top business challenges for first half of 2009:
o #1 - Expense control (34%)
o #2 - Competition (15%); slightly down from Q4 2008 (21%)
o Frequent “other” responses: revenue growth/generation and access to capital
o CFOs expect small increases in health care costs and technology spending; decreases in the areas of capital spending, hiring, price of products and inventory
o By comparison, in Q1 2008 CFOs anticipated increases in each of these areas.
o Top areas for planned cutbacks in 2009: hiring (75%), capital spending (64%), layoffs (44%) and benefits (38%).

Overview of the Survey:

Additional topics CFOs were surveyed on include violation or renegotiation of covenants and the hiring of outside advisors. Check here for Full survey results, and historical data comparisons, or from Nicole Madison at

This quarter, the CFO Outlook Survey, conducted by Financial Executives International and Baruch College's Zicklin School of Business, interviewed 334 corporate CFOs electronically from March 3 through March 9. CFOs from both public and private companies and from a broad range of industries, revenues and geographic areas, including some off-shore companies, are represented. Survey respondents are members of Financial Executives International.

Financial Executives International has been conducting surveys gauging the country's economic outlook from the perspective of CFOs for more than eleven years.

About FEI

Financial Executives International (FEI) is the leading advocate for the views of corporate financial management. Its 15,000 members hold policy-making positions as chief financial officers, treasurers, and controllers. FEI enhances member professional development through peer networking, career planning services, conferences, publications, and special reports and research. Members participate in the activities of 84 chapters, 73 of which are in the United States and 11 in Canada. For more information about FEI, visit

About Baruch College

Baruch College is a senior college of the City University of New York. The Zicklin School of Business at Baruch College is the largest and most diverse AACSB accredited collegiate school of business in the nation. Baruch has a long tradition of producing accounting and finance graduates who become leaders as CPAs and CFOs. Visit to find out more.

MEDIA CONTACT: Nicole Madison of FD +1-212-850-5647