The CFO Conundrum: One Layer Down

Nearly two years ago, I wrote about the pressure on the CFO market. The increasing demands of the job, the cost of securing the right person and the challenge of keeping them.

One part of that picture was the CFO “untouchables”. The best people in the best jobs, going nowhere, and the widening pool of funds left to fish in a shrinking market as a result.

The answer was to broaden horizons: stop insisting on a CFO who’s already been a CFO. Start looking outside the asset class, or start looking one level down. Hardly a revelation, to be honest, but something that was yet to play out across the market as we see it today.

So here we are. Step-ups are no longer the contingency plan. And the pressure that used to be concentrated at CFO level has found the floor beneath it.

The No.2s – the FDs, the Group Financial Controllers, the FP&A directors, whatever their official titles may be – are having their moment. Future first-time CFOs, eager to deliver for management teams and investors, and build a track record of their own.

There’s evidence of their rising value in our latest Senior Finance Professionals Remuneration Report. Average base salaries for Directors of FP&A increased by 20.1% year-on-year to £157,008. Finance Directors were up 16.4% to £165,813, and Group Financial Controllers up 7.3% to £140,087.

Those are UK findings, gathered in H1 2026. They don’t tell us how many people are moving into their first CFO role, or prove what’s driving every increase. But they're consistent with the pressure we’re seeing in the market: some of the strongest salary growth is sitting immediately below the CFO.

For the businesses employing these people, that creates a problem. Every time one leaves for a CFO seat, somebody has to fill the seat they left behind. And often, so does the person after that.

One seat, three vacancies

Maybe we have different definitions of “crisis” – every LLM seems to label anything around thought leadership as a crisis that’ll become Armageddon if left unattended – but this one deserves some attention.

It starts with one phone call. A fund’s talent team, a search partner, a former CFO now sitting on an advisory board, mentioning their name.

The No.2 in question might not have been looking. They’re two or three years into a role they’re very good at. Close enough to the CFO to see the job up close, learning the ropes and deputising on critical projects that become highly valuable lines on the CV.

They might be well paid and enjoying their work. But the opportunity to take the reins, lead and progress into the hot seat is compelling.

An exploratory conversation turns serious. The excitement rises. The offer comes in. The maths checks out. Signed.

The seat they vacate can’t sit empty for long. How can it? Not in a portfolio business with a plan that assumes a full finance function driving value, rather than a team scrambling to cover.

So somebody else moves up. Perhaps a Group Financial Controller takes on the FD role, with someone beneath them assuming more of the control remit. Both are progressing, possibly earlier than expected. Both need support.

One CFO appointment can put three seats into play, across the hiring business and the team its new CFO leaves behind.

But counting vacancies only gets you so far.

If the departing FD was also leading an acquisition integration, improving cash conversion or preparing the business for exit, that work needs an owner too. Moving someone into their job doesn’t immediately transfer their knowledge, relationships or judgement.

Meanwhile, the CFO may find themselves pulled back into work they had successfully delegated, just when the investment plan needs their attention elsewhere.

That’s where the disruption becomes more expensive than the recruitment fee. The business is paying for a replacement while potentially losing momentum on the work the original hire was there to deliver.

Why the No.2 is suddenly worth more

Not so long ago, a step-up into a first-time CFO seat came with an implicit discount. You hadn’t done the job before, so you weren’t paid as though you had.

In the searches we’re seeing, that discount is becoming harder to assume. There are still differences by sector, asset size and the demands of the role, but “first-time CFO” doesn’t automatically mean a bargain.

The same logic reaches back into the jobs these candidates already hold.

An FD’s employer may benchmark them against other FDs. The external market may be considering them for a CFO position. Those are two rather different conversations about what the same person is worth.

Our salary findings give that some context. Average base pay rose across all ten roles tracked, but the increases weren’t uniform. Alongside the 20.1% rise for Directors of FP&A and 16.4% for FDs, Head of Finance salaries increased by 3.7% and Head of FP&A by 2.1%.

My reading is that employers are recognising the value of people who can take on broader responsibility, as well as the difficulty of replacing them.

The rest of the package tells a more mixed story. Five roles recorded higher average bonus percentages and five lower. Most benefits tracked became less prevalent. Employers appear to be putting more of their investment into guaranteed salary.

That matters. But there’s a limit to what a pay review can solve.

If somebody wants their first CFO role and the incumbent has no intention of leaving, their current employer can’t necessarily match the opportunity.

Another £10,000 doesn’t create a vacant CFO seat.

Time matters here too. In our 2025 CFO research, 43% of respondents said their company’s exit timeline had been extended. For an ambitious No.2, that can mean a longer wait for the transaction experience, equity outcome or next move they joined for. If the timetable changes, the conversation about their future needs to change with it.

What an employer can offer is a credible next stage: more decision-making authority, meaningful investor exposure, ownership of important projects and, where appropriate, equity participation. Something tangible that makes staying a career decision, rather than simply the better-paid option.

There’s a balancing act here.

Developing a strong No.2 makes them more attractive to other employers. Failing to develop them gives them a reason to take the call.

I’d still rather have the first problem.

Two levels deep

The practical shift I’d argue for is simple to state and harder to action:

Succession planning in a PE-backed finance function needs to go at least two levels deep.

Boards and investors comfortable asking “what’s our CFO succession plan?” need to ask the same question about the No.2, and increasingly the No.3.

Then follow the answer through. If that person moves up, who takes on their responsibilities? Which projects depend on them personally? What would their successor need to succeed?

A strong controller might be ready for a broader leadership role but need support with investor conversations or commercial decision-making. Someone from FP&A might need greater exposure to financing, controls or transaction execution. The title alone won’t tell you.

Those gaps are much easier to address while the person above them is still there.

The same applies to cover. Some businesses will have the depth to promote internally. Others may need an external hire, interim support or additional capacity around a newly promoted leader. Understanding that in advance gives the business options.

Our 2025 UK and European CFO research gives that some context. Nearly a quarter of respondents identified hiring as a critical issue, with another 56% saying it was having some impact. That doesn’t isolate the pressure on No.2s, but it does show how widely hiring challenges are being felt across PE-backed businesses.

We’re currently collecting and analysing data ahead of our latest UK and European CFO Remuneration Report. It'll give us an updated view at CFO level to sit alongside the findings we already have on the team beneath them.

For now, I think there’s enough here to warrant the conversation.

Before the phone call

I don’t think this pressure eases simply because more funds become comfortable appointing first-time CFOs. Every successful step-up broadens the pool of proven CFOs, which is good news. It also creates a replacement challenge somewhere else.

If deal activity accelerates, that could add to the pressure. But businesses don’t need to wait for that to happen before looking at their own teams.

The aim shouldn’t be to prevent good people progressing. A promotion ought to be a good news story. The problem comes when the business has encouraged someone to become ready for the next job without preparing anyone for the job they’ll leave behind.

Two years ago, the argument was to look one layer down when hiring a CFO.

Now I’d suggest looking another layer down when planning what happens next.

Worth thinking about: if someone in the team got the call tomorrow, how many seats end up in play and who keeps the work moving while you fill them?