CIO Compensation: How Much Is Too Much in a Recession?

Some CIOs are still earning exorbitant pay despite the economy and despite massive layoffs inside their companies. Do those IT leaders risk irrevocably demoralizing their staffs by collecting multi-million dollar paychecks, or have they earned those millions? 

Earlier this week, Don Tennant, Computerworld‘s senior editor-at-large, wrote about the exorbitant pay some CIOs continue to rake in despite the recession. For example, Joseph Antonellis earned $6.3 million at State Street Corp. last year. Tennant wonders: Can the IT executives who are earning millions of dollars while their companies are laying off hundreds, if not thousands, of workers (often in the IT departments over which those CIOs preside) be considered good leaders?

Ultimately, the answer is yes, Tennant argues. He writes, “…I’m confident that the leaders who have reached the highest levels tend to be the ones who worked the hardest, and should be compensated accordingly.”

I can’t believe Don Tennant believes that these highest-paid CIOs are the ones who have worked the hardest (and as such, deserve their compensation, which even Tennant describes as “obscene.”) Believing that these guys got to where they are because they’re genuinely great, hard-working leaders is naďve. 

I’m in disbelief that Tennant would think such a thing. I also can’t believe that I’m calling Don Tennant, a veteran editor whose journalistic work I respect, naďve. If anyone here is naďve, it’s me: I honestly thought Congress would actually do something about executive compensation after Hank Paulson asked for a $700 billion check to bail out his buddies on Wall Street—who earned even more money than our CIO friends—all while they ran their companies and the American economy into the ground. How foolish of me.

I realize that I am in no position to judge whether these men and women are hard working. But I think we all know that it takes A LOT more than “hard work” to get to the top in IT. It requires political maneuvering, butt-kissing and kicking others when they’re down—to name just a few of the stunts people have to pull to reach the highest levels of their organizations. Does that sort of behavior add up to hard work? I don’t think so.

(I’m suddenly reminded of a Mel Brooks quote: “We have to protect our phoney-baloney jobs here, gentlemen! We must do something about this immediately! Immediately! Immediately! Harrumph! Harrumph! Harrumph!”)

We also all know that some of the hardest-working IT people never get to be CIO precisely because they cannot play personal or company politics effectively (or because they don’t want to.)

Another point to remember: The “hard work” that may have gotten these highly-compensated IT leaders to where they are today is not necessarily what makes them great leaders in the present. Being a great IT leader isn’t just about setting an innovative IT strategy that’s aligned with the business, or about deploying multi-million dollar software applications on time and on budget.

Most great leaders need a highly-motivated team backing them up. Great leaders know how to keep those teams moving effectively toward key goals, even in the worst of times, without resorting to scare tactics.

I would argue that a great IT leader today would see the discrepancy between what he’s earning and the toll that the recession is taking on his staff and would do something about it, even if that something is politically unpopular among the rest of the senior management team. Perhaps the CIO could take a temporary pay cut or give up his bonus or invest his bonus in his IT organization to save a few jobs. This sort of action to me is the sign of a great leader: someone who makes personal sacrifices and bold decisions for the ultimate benefit of his team.

What do you think makes a great IT leader today? Do you think the executives who are earning millions of dollars while their companies lose money and lay off staff should be compensated differently in times of economic trouble? What can be done about executive compensation and its effect on IT staff morale?