Only 48 percent of CMOs believe they are fairly compensated, according to a new study by the CMO Council in partnership with Kimberly A. Whitler, Ph.D., Darden School of Business at the University of Virginia.
“The CMO Compensation Report” is based on responses from 345 heads of marketing across 110 countries. The report found that the majority of CMOs earn a base salary anywhere from $100,000 to $349.999.
“If you think about all of the stuff written about short tenure and CMO turnover, the assumption has always been that CMOs are not doing well,” Whitler told CMO.com. “But our research finds that it could be CMOs are disgruntled, and the turnover could be happening because they don’t feel they are fairly compensated.”
According to Donovan Neale-May, founder and executive director of the CMO Council, CMOs with the highest base salaries tend to focus on driving real business performance, such as top-line growth, market share, and efficiencies. Another noteworthy finding, he said, is that the highest-paid CMOs work very closely with their counterparts in technology and finance. Digital marketing skills are important, as well, given that CMO salary increases with the firm’s digital marketing performance.
“The highest-paid CMOs are building alliances and alignments with other C-level functional leaders, particularly in the areas of finance, IT, sales is an obvious one, procurement, and chief operating officers when it comes to customer experience,” Neale-May told CMO.com.
The CMO role is changing, he said: “It’s far more strategic, far more long-range, far more oriented toward equipping the organization by introducing new platforms and processes to increase the impact and the outcome of marketing.”
Most interesting to Whitler is that CMOs who earn the most tend to be “change agents” within their organizations, she said. Higher-paid CMOs’ key accomplishments are in areas such as restructuring marketing. “That’s not a maintenance role,” explained Whitler, the author behind another CMO report, "CMO Impact Survey," published in March.
Neale-May said that often CMOs are hired to fix broken marketing organizations. The marketing chief needs to first build credibility, then provide empowerment, and be the authority leading the change.
“In many cases, [CMOs] have organizations that are somewhat dysfunctional or haven’t bridged the gap to digital,” Neale-May added. “[Some organizations] don’t have--or want--the skills and talent needed today from an analytic and strategic standpoint.”
Of course, Whitler explained, company size also affects CMO compensation, which, Neale-May said, is directly related to reporting structure. CMOs who earn more than $500,000 per year are more likely to report directly to the CEO.
In addition, CMOs who earn the most are set on improving the yield and accountability of marketing, Whitler said. They are focused on building their companies' digital capabilities and have the ability to transform marketing within their firms. Junior executives must acquire these types of skills as they move up the ranks because being the CMO isn’t just about managing marketing, she said.
Click here to download the report (short registration is required).