Chief marketing officers who report directly to CEOs or have strong peer relationships with fellow chief financial officers or chief information officers have a higher chance of earning more than CMOs who do not enjoy these connections.
In a study conducted and recently released by the CMO Council, titled the “CMO Compensation Report,” only 48 percent of polled CMOs feel their compensation is adequate.
Marketing officers form the cornerstone of any business. The role of the CMO can be found in every conceivable type of company, from medical companies to transport firms. Indeed, medical marketing is a very lucrative operation for many businesses.
The aim of the study was to benchmark and gain a better understanding behind influential factors that shape these salaries. The report was based on responses from 345 of 525 respondents.
The report revealed that 60 percent of all respondents reported to a CEO, COO or president, while 17 percent reported to a regional vice president, general manager or division or line of business leader.
Some key findings reported include:
- The reporting structure had a direct effect on CMO salaries. Those with salaries greater than $500,000 more often were direct reports to CEOs.
- The highest paid CMOs usually had strong associations with peer CIOs and CFOs.
- CMOs in B2C companies held higher base salaries than those in B2B or hybrid companies.
- The size of the firm was a strong determiner of salary amount. Larger companies gave greater base compensations than smaller ones.
- Digital marketing skills drove salaries higher, because digital marketing usually improved performance.
“With a minority of CMOs believing that they are fairly paid, there appears to be a general issue with CMO compensation,” according to the report’s author, Dr Kimberly Whitler of the Darden School of Business at the University of Virginia. She spent 20 years in senior marketing and general management positions, including at Procter & Gamble.
“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.”
This new report may become an annual tool to benchmark salaries and help companies understand CMO salary dissatisfaction, according to CMO Council executive director Donovan Neale-May.
“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.