by Brian DeChesare Comments (2)

The FP&A Director: First in Line for the Corporate Finance Crown, or Highly Paid Assistant to the CFO?

FP&A Director

If you want to advance on the corporate finance career path, you’ll eventually hit the mid-level doldrums, which goes by different names, such as “Director of Finance” or “FP&A Director.”

If you’re not already familiar with Financial Planning & Analysis (FP&A) and corporate finance, you should review the previous articles on those topics.

In short, the FP&A group is in charge of the Income Statement, or P&L, for a business unit or region or the entire company.

The Analysts in the group are the “doers,” responsible for Excel, data manipulation, and PowerPoint, and the Managers manage the Analysts.

The FP&A Director, one level above them, is the “manager of managers.”

At this level, you become more removed from the day-to-day minutiae and more aligned with management up and down the ladder.

And that could be great or terrible, depending on your personality and skill set:

The FP&A Director Job Description

First, note that titles within corporate finance are inconsistent and confusing.

For example, a “Director” at a small company or startup might be a jack-of-all-trades operator responsible for the company’s budgeting, fundraising, liquidity, and investor relations.

At other companies, “Director” and “Manager” might be the same level, or there might be only three levels, such as Analyst, Director, and VP.

To make things even more confusing, there may be a difference between the “Director of Finance” and the Directors within individual groups, such as FP&A and Treasury.

In this article, we’ll assume that “FP&A Director” is a distinct level at a Fortune 500 company and that the Director’s duties are managerial rather than Excel and data-related.

In that case, your daily tasks as a Director might include:

  • Setting the vision and direction for the entire team, i.e., telling the Managers what to spend time on and what to avoid.
  • Finding growth opportunities within your business unit or across the company and then winning senior executive buy-in to pursue them.
  • Working with the VP(s) and CFO(s) to figure out what they want and then relaying the instructions to your Managers.
  • Recruiting and training new hires at the levels below you and deciding who gets promoted, demoted, and shuffled around.
  • Reviewing the output and results of different Managers and deciding which teams, if any, need tweaks.

The Manager and Director jobs are similar in some ways.

Both are more about management and communication than doing the work directly, but there are also some important differences:

  • Direct Reports: An FP&A Manager and FP&A Director might have a similar number of direct reports (3-5), but there’s another layer for the Director: the Analysts under each Manager. So, the Director might indirectly manage ~15-20 people.

This point may sound small, but it’s the difference between meeting with each person every day vs. once per week or once every few weeks.

  • Day-to-Day Work: Directors are far less involved than Managers in reviewing the day-to-day workflow of teams and the details of specific processes.
  • Growth Opportunities: Analysts and Managers spend more time creating, reviewing, and consolidating budgets and plans based on what the executives want to see.

By contrast, Directors have to find new growth opportunities within the data and suggest how the company might pursue them.

The Best Companies for FP&A Directors

The “best” company depends on your goals.

Do you want to grind it out for decades to reach the top of the ladder, with a guaranteed paycheck along the way?

Or do you want a role where you’re responsible for everything, with possible quick promotions but also a chance of getting fired if the company flames out?

If it’s the first, you should work at a Fortune 500 company with a global presence and many different business units.

But if you’re after the second type of role, you should go to a startup or other smaller company.

In corporate finance, it’s generally best to start at a large company and then plan on your next move from there.

It tends to be much easier to go from a large company to a startup than to do the reverse, and it’s not necessarily “easier” to find an internship or job at a smaller company.

FP&A Director Hours and Lifestyle

You can expect hours on par with FP&A Managers: 45-55 per week in most normal periods, with spikes up to 60-70 hours per week when a big event, such as a Board meeting or 3-year planning session, takes place.

Since you’re no longer a “doer” at this level, it’s unlikely that you’ll be pulled into the office over the weekend or late at night for an emergency Excel problem.

FP&A Director Salaries, Bonuses, and Total Compensation

As with other corporate finance roles, you’ll find a very wide range of compensation estimates here.

In general, though, if you’re in the U.S. working at a Fortune 500 company with a national pay scale, you can expect:

  • Base Salary: $150K – $200K USD
  • Total Compensation: $200K – $250K USD

An example compensation structure might look like this:

  • Base Salary: $150K
  • Year-End Cash Bonus: 25% – 30% of base salary ($38K – $45K)
  • Stock: 30% of base salary in Restricted Stock Units (RSUs) that vest over 3 years ($15K per year)

All of that adds up to just over $200K per year, assuming the RSU value stays the same.

Some companies offer more or less than these numbers.

For example, some large tech and finance firms might offer higher base salaries and bonuses, with total compensation reaching the $300K – $350K level.

That tends to be more common if you’re in a high-cost-of-living area, such as NYC or SF.

And if the “Director” role is more like a “Manager” role, total compensation might be closer to what Managers normally earn: the $130K to $200K range.

The basic point is that you’ll be well-compensated, but you’ll still earn significantly less than similar mid-level positions in IB and PE (e.g., Vice Presidents and Principals) – even though it takes more time to reach the FP&A Director level.

A Day in the Life of an FP&A Director

We’ll assume here that you’re an FP&A Director within a specific business unit at a Fortune 500 company.

You report to the VP of the group and the regional CFO, and you manage four (4) Managers, each of whom has a few Analysts and Senior Analysts.

You’re moderately busy at the moment with some new projects and a company-wide strategic plan, but you’re also not working 12-14-hour days.

A typical day might look like this:

8 AM – 9 AM: Arrive at work, check your overnight emails, and review some instructions from your CFO and VP.

9 AM – 10 AM: Meet with the CFO and VP to discuss the company-wide strategic plan due in a few weeks.

Since you’re not working in “corporate,” you do not have to compile information from different sources; your main goal is to provide reasonable forecasts for your business unit.

10 AM – 11 AM: Meet with your Managers and explain their tasks for the strategic plan.

You’ve asked one to focus on unit-by-unit revenue forecasts, another to focus on labor expenses and cost of goods sold (COGS), another to focus on capital expenditures, and another to check everything for consistency.

11 AM – 12 PM: After reviewing the monthly reports from your teams, you believe you’ve found a solid growth opportunity: a way to boost sales by tweaking the pricing of one product line to better differentiate customers.

Essentially, instead of offering Options A and B, you’ll offer Options A, B, C, and D.

You start outlining a presentation for your VP to explain your proposal.

12 PM – 1 PM: Head to lunch with your VP and one of the newly hired FP&A Managers and explain more about the team’s dynamics.

1 PM – 3 PM: Your VP wants you to hire an additional Manager and bring on board a few Analysts under them.

Your company has a strong preference for internal hires, so you conduct a few first-round interviews with candidates from different divisions.

They all have solid experience, but one person knows your group’s products and services better than the rest, so you recommend them for more interviews.

3 PM – 5 PM: You continue to outline your pricing presentation and call one of your Managers to explain the data required to support the proposal.

It’s up to her to find and aggregate the pricing, order, and cash flow information; you just give the general direction for the assignment.

5 PM – 6 PM: The VP and CFO meet with you again, this time to discuss the executives’ desire to “automate” more of the monthly reporting.

This idea comes up several times per year because the C-level executives do not understand the challenge in reporting: finding and fixing small discrepancies that cannot be “automated” away.

But you agree to assign a Manager to this task – at the very least, they might come up with a neat-looking data visualization tool.

Your VP also asks about which Manager is most deserving of a promotion next year, so you go over each person’s strengths and weaknesses.

How to Get Hired Promoted into an FP&A Director Role

Normally, it takes 10+ years to reach this level at a large company as you advance from Analyst to Senior Analyst to Manager to Senior Manager.

You might spend 2 to 4 years in each role, which means the average FP&A Director likely has 10-15 years of total experience in corporate finance.

It is possible to reach this level more quickly, especially if you’re at a small, high-growth company, but it’s still a minimum of 5-6 years.

The two main pathways into the Director role are:

  • Work Your Way Up – Start in corporate finance/FP&A (or maybe at a Big 4 firm in an audit/accounting role and switch to corporate finance within a few years) and work your way up, ideally spending time in different groups, such as Controllership and Treasury, and other business units.
  • Skip Up the Ladder via Banking or Consulting – You could also start in corporate finance/FP&A, reach the Senior Analyst level, and then complete an MBA to get into investment banking or management consulting. Work in IB or MC for a few years post-MBA, return to the company in strategy, operations, or corporate development at the Director level, and then move back into FP&A.

The advantage of method #2 is that you might be able to reach the FP&A Director level with fewer years of work experience; the disadvantage is that it’s less direct and requires an MBA.

If you work your way up the ladder, you need the following to advance from FP&A Manager to FP&A Director:

  • Experience with a Good Number of Direct Reports – You’re probably not going to reach this level if you’ve only managed two people before. You need to show that you can manage a bigger team because there’s a significant jump in management responsibilities at the Director level.
  • Experience in Different Areas of the Company – For example, it helps if you’ve had exposure not just to P&L budgeting and forecasting but also the supply chain, revenue management, pricing, and capital budgeting across different business units. And if you’ve worked in several divisions, such as Sales, Marketing, IT, and Product, it’s even better.
  • Evidence of Project or Process Improvements – Have you suggested a project or process improvement (e.g., accomplish Task X but with 20% fewer people or in 30% less time) and seen it through to completion? You’ll need something like that to reach this level because the Director role is all about growth.

How to Get Promoted Beyond the Director Level

Advancing to the next level, normally the Vice President (VP) or Chief Financial Officer (CFO), depends heavily on the company type and size.

For example, if it’s a highly acquisitive company, they’ll probably want someone with a “deals” background (IB, corporate development, etc.), even if these VP and CFO roles are technically within “corporate finance.”

If it’s more of a standard product/service company with low margins, unit economics and the budgeting analysis you do in FP&A will be more important.

And if it’s a large public company, audit and regulatory experience will be more important.

So, you’ll need a skill set that matches your company’s requirements, and you’ll need to prove yourself as a manager who can find and execute growth opportunities.

Exit Opportunities

“Exit opportunities” are not worth discussing because if you have 10-15 years of experience in corporate finance, it will be very difficult to switch industries.

You could always move to other internal roles, such as strategy, investor relations, or even corporate development (maybe), but fields like investment banking, private equity, and hedge funds are highly unlikely unless you’ve had previous experience in one of them.

The FP&A Director Role: Right for You?

There’s no point in writing a pro/con list here because the FP&A Director role is less about the job itself and more about FP&A and corporate finance as your long-term goals.

If you want to stay in the field and reach the VP or CFO level, you’ll need to reach the Director level first.

If you’re currently a Manager and you’re deciding whether to aim for the promotion to Director, you have to answer two questions:

  • Is your long-term goal to become a CFO?
  • Are you at the right company in terms of industry and people?

If the answer is “yes” to both, sure, go for the Director promotion and keep moving up.

If not, change your industry or company ASAP, so you don’t get stuck or forced into an MBA just to make a career change.

Do it correctly, and you might even win a promotion in the process.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Avatar
    random237

    Hi Brian,
    Great website. I just wanted your advice on which role you think is the best for the long-term if i want to have a shot at becoming an investment analyst at a real estate firm. I am currently a big 4 audit senior.

    I currently have an offer for a FP&A role at a F500 where I will get exposure to financial modelling and transactions where i will be responsible for their real estate portfolio.

    I am at the final stages for a mid-market transaction services roles i.e. Alvarez & Marshall, Duff and Phelps role, if i get the TS role, i was thinking to try to get into M&A at the big 4 after a year or two.

    1. Thanks. I’m not sure there is a clear winner here because the FP&A offer is better in terms of industry fit, but the mid-market transaction services role has broader work that’s more relevant if you decide to do something outside of RE in the future.

      So, I think it depends on how set you are on doing RE vs. getting into M&A. If you want to work in RE investing, the FP&A role sounds like a better bet, while TS is better for a generalized M&A role.

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