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THE STATE OF THE CIO - Salary: Comfortably in the Six Figures

By Lorraine Cosgrove Ware

March 01, 2002 — CIO — It pays to be a cio: $183,245 on average, including stock options and bonuses. "The State of the CIO" survey shows that while a fraction of IT heads?4 percent?receive more than a half million dollars in compensation, most CIOs are settled in the $100,000- to $250,000-a-year range.

In the big scheme of things, those are heady numbers. (The U.S. Census Bureau reported that median household income in 2000 hit an all-time high of $42,148.) When it comes to the executive suite, CIOs are poor relations. That’s especially true at very large companies (more than $5 billion in revenue) where CEOs, CFOs and COOs routinely pull in seven-figure packages (see "What’s Wrong with This Picture?" Page 28).

Merit Pay Parallels

One argument for big increases in CIOs’ salaries: CIOs say their manager evaluates their performance?and determines their compensation?based on what they deliver, just like other executives. The biggest factors in this standard are their company’s profitability and their leadership abilities (both cited by two-thirds of CIOs) and the value of their organization’s IT investments (which 53 percent say is key).

Here are some other insights from the paycheck portion of "The State of the CIO" survey.

Small Companies Offer Pay Parity

CIOs at companies with annual revenues of $5 billion or more earn close to $303,000 on average?at least 50 percent more than their peers at organizations with revenues below $100 million. Pay may rise with company size, but the differential between pay for CIOs and other executives is also greater at larger companies. A CEO at a small company (less than $100 million in revenues) earns more than three times as much as his CIO, on average ($489,600 versus $141,500). At companies with revenues between $500 million and $1 billion, CEOs earn on average six times more ($1.3 million versus $226,600 for CIOs).

Insurance, real estate and legal industries are the most lucrative for CIOs, with compensation averaging $255,975. The computer industry (including consultants, resellers and system integrators) ranks second. Health care, education and government sectors bring up the rear.

Report to the CEO? Not necessarily.

Having the CEO as your boss may guarantee a high profile, but our survey found that CIOs who report to chief operating officers earn the most on average ($265,891). CIOs who report to a CFO also earn more than those who call the CEO their direct manager.

Size plays a role here too: CIOs in larger organizations are more likely to report to their COO or CFO. A little more than half of all CIOs surveyed report to their CEOs, but that number drops to 34 percent at companies with revenues of $1 billion or more. In contrast, the number of CIOs reporting to COOs or CFOs rises from 23 percent at all companies to 43 percent at large organizations.

 

 

 

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