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Salaries
You could say the C in CIO stands for cash.
The higher the compensation level, the more CIOs (and the fewer VPs and directors of IT) you find there. For example, 66% of CIOs earn more than $150,000 a year in salary and bonuses, compared with 56% of VPs and 16% of directors. At the $200,000 mark, 36% of CIOs are in the game, compared with 11% of VPs and 4% of directors.
Company size can make a difference. In our survey, 53% of respondents at companies with more than $1 billion in annual revenue earn more than $150,000 in salary and bonus, compared with 27% of execs at organizations with $50 million to $250 million in revenue. CIOs at bigger companies often run a more complex and larger-staffed IT department, says Karen Rubenstrunk of Korn/Ferry International.
Companies have also resumed giving pay raises after the lull in salary increases that followed the dot-com crash in 2000. Some 87% of respondents report receiving a raise in 2005-2006, and about half say it was in the range of 3% to 6%. Nearly a third of CIOs and VPs received raises of 6% or more, compared with a fifth of IT directors.
Compensation often includes a bonus, which 75% of our survey respondents say they're eligible to receive. The amount varies greatly, though 62% report that their last bonus was more than $10,000 (see data below). And once again, more CIOs are found at the high end: Of those CIOs who get bonuses, nearly half receive more than $30,000, compared with a third of VPs of IT and 10% of IT directors.
CIO John Havener of Hacienda Builders, a home builder in Phoenix, says his annual compensation package includes a $170,000 base salary and a bonus equal to 100% of his salary. In previous jobs, Havener received a bonus of 30% to 40% of his salary, though he acknowledges his current bonus could shrink if the U.S. housing market cools.
But Havener is quick to note that money doesn't drive his career choices. "I would leave if I didn't like the company," he says. "If this company shifted to a different management philosophy, I would probably do something else."
Compensation is a powerful indicator of how a midmarket company views technology's role. "If a company sees technology as a business enabler that drives efficiencies and drives down costs, as opposed to a change agent and an innovation supporter, the salary is going to be lower," Rubenstrunk says.
David Wesch, VP of IT at $450-million American Color Graphics Inc. in Brentwood, Tenn., aspires to be a CIO even though his company has only one C-level executive: the CEO. "I do believe that when someone says they want to hire a CIO and is willing to pay for the CIO to align things, then it's more of a strategic discussion," he says.
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