Millionaire CIOs
by
Kim S. Nash
June 27, 2008
CIOs rank among top paid execs at 47 Fortune 1000 companies
CIO — We in technology have gotten
pretty good at assessing the financial value of projects, but not so much at
figuring out what a CIO is worth. Or, if not worth, at least what to pay
him. Or her.
Unlike a CEO, whose compensation rides mainly on measures of the
company's financial performance, a typical CIO takes home a pay package less
dependent on metrics such as share price or return on equity. Generally,
it's a mix of base salary and, for hitting soft and hard goals, bonuses.
Sometimes there are shares of stock.
That's most CIOs. Then there are the heavy hitters, the CIO elite who set
corporate strategy alongside the CEO, CFO and other top execs—and get paid
like them.
Half or more of the total pay for these CIOs is tied to long-term
incentive plans, involving measures of the company's performance over time,
says Vincent Milich, director of IT effectiveness at Hay Group, a consulting
firm. "By hewing to performance measures that are long-term and linked with
business success, IT leaders align themselves with the CEO and the
enterprise, and change the impression that they're a cost center and staff
job," he says.
With so much at stake, these high-powered CIOs know that to be
successful, they need trustworthy people in key positions, says Victor
Janulaitis, principal at the compensation consulting firm Janco. CIOs at
this level commonly bring an entourage of two or three managers with them
who "understand what they say, how they say it and what they mean."
So who are this year's top-tier technology leaders and what do they make?
Every year, public companies must file proxy statements with the Securities
and Exchange Commission (SEC) to show what their top five highest-paid
executives earn in salary, bonuses, perks and incentive pay such as stock
and options awards. We studied the filings of the 1,000 biggest U.S.
companies to see what compensation looks like for CIOs ranked and rewarded
highly enough at their companies to be included. Not many make the cut. This
year, 47 top technology executives were listed at the 1,000 companies.
That's down slightly from last year's 52, but about the same overall count
since 2001.
Clearly, these companies—especially in financial services, manufacturing
and retail—value their technology leaders. According to the latest SEC
filings, which show 2007 compensation, our 47 superstars together earned
$112,651,463. That's down 18 percent from the $137 million earned for 2006.
Still, at $435,200, the average salary (excluding bonuses and other
compensation) for this group far outpaces average salaries for CIOs
generally. In our latest "State of the CIO" survey, CIOs at companies of $1
billion or more in revenue reported an average salary of $344,400.
Demand has declined for CIOs as their average tenure increases. And in
this poor economy, companies are reluctant to assume the risk of replacing
their top technology leaders, Janulaitis says. "Organizations are in a
holding pattern in IT right now," he says.
Most of the fat payouts in 2007—77 percent—came not from salaries or
bonuses but from the innocuous sounding "Other" category.
In the Money
Who Made What: Some of the Top-Paid Fortune 1000
CIOs of 2007
| Technology Executive |
Company / Industry |
Total 2007
Compensation* |
Salary |
1. Barbara Desoer
Global
Technology & Operations Executive |
Bank of
America
Financial
Services |
$10,532,513 |
$800,000 |
2.
Glen Salow
EVP
Technology & Operations |
Ameriprise Financial
Financial
Services |
$7,029,188 |
$709,6780 |
3. Robert Carter
EVP,
CIO |
FedEx
Services |
$5,461,269 |
$510,000 |
4. Tim Shack
EVP,
CIO |
PNC
Financial Services Group
Financial
Services |
$4,896,181 |
$475,000 |
5. Mark Boxer
President & CEO Operations, Technology, Government Services
Business Unit, EVP |
Wellpoint
Health
Care |
$4,878,008 |
$693,654 |
6. Bob Willett
CEO
Best Buy International, CIO |
Best
Buy
Retail |
$4,677,735 |
$685,577 |
7. Dave Kepler
EVP,
Chief Sustainability Officer, CIO & Corporate Director of Shared
Services |
Dow
Chemical
Manufacturing |
$4,672,827 |
$562,310 |
8. Randy Darcy
EVP
Worldwide Operations & Technology, CTO |
General
Mills
Manufacturing |
$4,449,958 |
$500,000 |
9.
Bob DeRodes
EVP,
CIO |
HomeDepot
Retail |
$4,296,143 |
$774,788 |
10. Larry Kittelberger
SVP
Technology & Operations |
Honeywell International
Manufacturing |
$4,075,648 |
$606,250 |
Original Article
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