Salary Survey Shows CMO Compensation is Tied to C-Suite Alliances

Nearly Half of Chief Marketers Say They Are Not Being Fairly Compensated

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The highest-paid marketing executives are those who have developed strong alliances with other C-suite executives -- primarily the CEO, CIO and CFO -- according to a new report from the CMO Council.

The "CMO Compensation Report" was based on an online survey of 345 senior marketing executives conducted in the first half of the year, as part of the CMO Council's "State of Marketing" annual survey.

Forty-five percent of respondents were from b-to-b companies; 35.0% were from hybrid b-to-b and b-to-c companies; and 20.0% were from b-to-c companies.

According to the report, 39% of CMOs receive a base salary between $100,000 and $199,999, and 39% receive a base salary between $200,000 and $349,999. Additionally, 12% earn less than $100,000; 6% earn between $350,000 and $499,999; and 4% earn more than $500,000.

Reporting structure is highly correlated with compensation, with those making more than $500,000 more likely to report directly to the CEO, the study found.

"Reporting structure is an indication of the stature of the function in the organization," said Donovan Neale-May, executive director of the CMO Council. "If you report directly to the CEO, that is obviously elevating your position in the organization, and as a result, you're likely to be able to negotiate a better package."

Other C-suite relationships are correlated with CMO compensation, the study found.

For those CMOs earning between $200,000 and $349,999, 43% report strong alliances with the chief innovation officer; 42% with the CIO; and 41% with the CFO.

"You have to be smart and adept at building relationships with other C-level executives -- primarily CEOs, CFOs and CIOs," Mr. Neale-May said. "The stronger your relationships are in the C-suite, the stronger the perception is that you are adept."

He noted that while there is much attention paid to the CMO title, the title doesn't necessarily correlate with pay.

"We are very caught up with the term CMO, but we are also talking about people who are chief marketers but have a variety of different titles -- they can be a director or senior VP or head of marketing."

Among senior marketers making more than $500,000, the highest proportion (27%) have the title VP-marketing and sales, while only 8% hold the CMO title.

In another significant finding, 48% of CMOs said they were not being fairly compensated relative to other executive positions.

"If you look at CEO pay, it has really grown a lot over the last 30 years, but CMO pay has not grown as much," said Kimberly A. Whitler, assistant professor at the University of Virginia's Darden School of Business and author of the report. "This could lead to CMO turnover."

The report also found that CMOs at b-to-c companies on average have a higher base salary than CMOs at b-to-b companies or hybrid companies.

"B-to-c CMOs come from bigger firms, and salaries tend to most highly correlate with size of firm," Ms. Whitler said. "So part of what could be driving higher overall salary for b-to-c CMOs is firm size. Also, the pay structure is different -- b-to-c CMOs tend to make more on perks, equity and options, and b-to-b CMOs make more on bonuses and commissions."

The key accomplishments of the top-earning CMOs are centered on restructuring marketing to drive results, improving the accountability of marketing and building digital capabilities, according to the report.

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