Dive Brief:

• QXO Inc.’s newly-minted CFO, Ihsan Essaid, will receive a compensation package including an annual base salary initially beginning at $900,000, set to increase — but not decrease — each calendar year depending on the company’s annualized revenue run rate, according to a Thursday securities filing.
• Essaid, a “heavy hitter” in the M&A world as described by CEO Brad Jacobs, will also receive a target annual bonus initially set at 125% of his base salary. His compensation package also includes a $3 million signing bonus “in recognition of a portion of incentives that he forfeited from his prior employer,” according to the filing.
• The first CFO of the Greenwich, Connecticut-based product distribution firm, Essaid’s tenure in the company’s top financial seat was effective as of July 15. Led by Brad Jacobs — the founder and chairman of logistics firm XPO Inc. — QXO first announced Essaid would be serving as its finance chief in May, CFO Dive previously reported. Jacobs, QXO’s CEO, has founded five companies including GXO Logistics, RXO, and United Rentals.

Dive Insight:

The Jacobs-led firm is tapping Essaid’s M&A expertise as it targets a $1 billion revenue run rate by the end of its first year, according to company announcements in April.

A veteran of Barclay’s, Essaid previously served as the London-based bank’s managing director, global head of M&A prior to joining QXO, according to his LinkedIn profile. He has also previously held M&A-related roles at banks including Credit Suisse.

Essaid’s base salary and target annual bonus are set to increase alongside QXO’s revenue run rate. According to charts included in the Thursday filing, Essaid’s potential base salary could hit approximately $1.6 million should the company reach an annual revenue run rate greater than $30 billion. His potential annual target bonus with such a run rate would increase to 190% of his base salary, or approximately $3 million.

The new CFO’s target annual bonus for 2024 will also be paid in full if Essaid’s employment continues through Dec. 31 of this year, or if during the year he either terminates his employment “with good reason” or is terminated by the company without cause, the company said in the Securities and Exchange Commission filing.  

The compensation agreement comes as CFOs have seen their salaries increase over the past year, a trend occurring as turnover in the position continues to spike. According to a recent report by Compensation Advisory Partners, total direct compensation for CFOs rose 8% in 2023 while only rising 5% for CEOs — though on average, CFO pay remains about one-third of CEO pay. Seventy-two percent of CFOs reported salary increases in 2023, compared to 50% of CEOs, according to the report, which surveyed compensation activities across 132 companies with median revenue of $14.6 billion.

While salaries increased an average of 4% for CFOs last year according to the CAP report, turnover for the position in public companies reached a three-year high in Q1 of this year, CFO Dive reported in May, citing details from a Russell Reynolds Associates study. Eighty-two public company CFOs were appointed in Q1, representing a 14% increase from the same period in 2023, Russell Reynolds said.

The compensation agreement with its newly-minted CFO was inked as QXO looks to achieve its goal of becoming a “market leader” in the product distribution industry, which sees about $800 billion in annual revenue, the company said.

Following Essaid’s appointment in May, QXO announced the appointment of eight executives to its C-suite as well as six inaugural members of its board in June — naming Morgan Stanley alum Josephine Berisha as its chief human resources officer, Henkel Corporation veteran Chris Signorello as its chief legal officer, and Sean Smith, previously the corporate controller for e-commerce pet retailer Chewy, as its chief accounting and deputy chief financial officer among other appointments.

Also in June, the company announced it had entered into purchase agreements “with certain accredited and institutional investors” for $3.5 billion in private placement financing, per a separate company announcement.

The private placement comes after QXO secured $1 billion in funding, $900 million of which was invested from Jacobs Private Equity, the investment arm of founder Jacobs. The remaining funding came from co-investors, including Sequoia Heritge, JPE said in a 2023 press release announcing Jacobs’ plans to create QXO, then SIlverSun Technologies.

QXO did not immediately respond to requests for comment.