CMO salaries: most aren’t happy with their pay packet
A global study has revealed the key factors that influence CMO salaries, finding that CEO reports and C-level relationships matter the most, while digital marketing skills add value. And less than half of all CMOs feel they’re fairly compensated.
Chief marketing officers (CMOs) who report directly to CEOs are likely to earn more than their peers, and good peer relationships provide an advantage as the most highly paid CMOs have forged close partnerships with chief financial officers (CFO) and chief information officers (CIO).
Overall, only 48% of CMOs feel fairly compensated, with satisfaction level rising as salary does.
The findings come from the CMO Council in a new study titled, ‘CMO Compensation Report’, released today. The study aimed to benchmark and understand the key factors influencing CMO salaries.
60% of respondents report to a CEO, president or COO, and 17% report to a regional vice president, general manager or division or line of business leader.
Key findings highlighted in the report include:
- CMO salaries are directly related to reporting structure – those making more than $500,000 annually are more likely to report directly to the CEO,
- the highest paid CMOs have developed strong alliances with CIOs and CFOs,
- CMOs earning the highest levels of base compensation tend to be focused on driving business performance (eg. top-line growth, market share, efficiencies, etc),
- B2C CMOs have a higher base salary than B2B/hybrid-company CMOs,
- CMO base compensation is correlated with firm size – the larger the company, the more likely that the CMO will make more in base compensation and the more likely they will have bonus compensation,
- digital marketing skills are important – CMO salary tends to increase as their firm’s digital marketing performance improves,
- marketing titles (ie, CMO, VP of marketing, SVP of marketing, etc) don’t significantly correlate with base compensation,
- key accomplishments of the top earners (greater than $500,000 base compensation) are centred on restructuring marketing to drive results, improving the yield/accountability of marketing, and building digital capabilities,
- bonuses are the most common type of compensation beyond base pay – 85% of CMOs receive bonuses with large company CMOs being more likely to have bonus-based compensation, and
- CMOs are more likely to feel fairly compensated when they make more money, but overall only 48% feel fairly compensated.
“With a minority of CMOs believing that they are fairly paid, there appears to be a general issue with CMO compensation,” says the report’s author, Dr Kimberly Whitler of the Darden School of Business at the University of Virginia, who previously spent 20 years in senior marketing and general management positions, including at Procter & Gamble.
Whitler says, “this high degree of dissatisfaction suggests that either CMOs are actually underpaid relative to key benchmarks identified in the report or that CMOs just believe they are underpaid.
“This important finding may be a key driver of CMO turnover and suggests both a greater need to understand why CMOs believe they are underpaid, and for more collaboration between executive recruiters, CHROs, and CEOs to ensure that CMOs are fairly compensated.”
According to CMO Council executive director Donovan Neale-May, the ‘CMO Compensation Report’ will become an annual benchmarking tool to help CEOs, executive recruiters, chief HR officers, board members, academics and senior marketers better understand CMO compensation from a variety of dimensions (eg. geography, type of business, responsibilities, etc).
“As such, this is the first comprehensive report regarding CMO compensation and provides significant insight into CMO salaries, incentives, benefits, as well as CMO expectations and perceptions of compensation fairness and value to the organization,” Neale-May says.
Analysis for the ‘CMO Compensation Report‘ was conducted with responses from 345 of the 525 participants in the ‘State of Marketing’ audit of senior-level marketers were evaluated to include insights from countries and companies around the world. Executive respondents with CMO, EVP, SVP or VP titles totaled 56% of respondents. In addition, 18% had director titles, which is often the most senior title in Europe, the Middle East, Africa, APAC, India and Latin America. 8% listed their titles under ‘Other’, and this included general managers and variations on the VP title.