Recap by Nerissa Sardi, recent VP of Marketing, Medici
At the 2019 Spring CMO Club Summit Kim Feil, CMO, Aspire Healthy Energy Drinks, CMO Club Board Member and Alan Hart, Head of Research, The CMO Club led a roundtable session breaking down all the results from The Largest CMO Compensation Study Ever and how that effects today’s CMOs.
Kim and Alan provided the findings of the latest CMO compensation research based on CMO club member survey results. The study has recently been updated with new findings. Kim and Alan also gathered suggestions for further research and data based on requests from roundtable participants. 400 members participated, the largest such study ever done.
The Bad News: Women in the club are paid 13% less than men for the same roles.
The Good News: The median salary for CMOs in the club is $250k, and bonuses averaging 30%.
- Salary differences between those with the title Head of Marketing to those with title of CMO, the salary gap is $100k.
- The pay gap is bigger in private companies,
- For private equity companies, there was no pay gap,
- And in public companies the gap is 8% higher.
- CMOs for Non-profit organizations have the highest base salaries compared to other categories. However, these companies offer less perks, no equity and no bonuses.
- Those with the highest salaries indicated they were the most satisfied with their work. The least satisfied CMOs made 18% less than those who were highly satisfied.
- 37% of CMOs have lost their job in a past.
- 90% of them received some type of severance including pro-rated equity.
- Pay packages vary widely
- 52% of companies have an existing executive severance program.
- For those CMOS that work with a company with a severance program, 80% of them stated they were eligible.
- For those who stated their company did not have a formal severance program, ½ of them stated they did receive some severance.
- Many private equity companies of all sizes are seeking board members, which is a good way to supplement income.
- 80% of bonuses are paid on a sliding scale.
- In general, a bonus payout mix consisted of 70% of the based-on sales, EBITA or profit with the remainder made up of other performance factors.
- It can be confusing, especially in larger enterprises, so be sure to understand what your company’s bonus philosophy is. E.g., enterprise performance, division targets or geography.
- Industries with the highest salaries:hospitality, entertainment, travel, telecommunications, CPG, finance/insurance, retail, healthcare and wellness.
- Industries with the lowest salaries:construction, energy and durable goods.
Advice for Negotiating Your Terms of Employment
For many CMOs, it was rare to have a formal severance agreement as part of their offer. However, it may be possible to negotiate some protection (e.g. ask for historical rates, and if you can perhaps negotiate 100% payout of your salary or equity after the 1styear). This can be risky, and if you opt to negotiate, but sure to frame it as what you need to be a productive employee.
Kim Feil – “Continue reminding your employer of your value as you negotiate. It’s ok to ask for a little more protection.”
Some roundtable participants brought up the lack of transparency in executive compensation. More specifically, not all executive titles carry the same benefits because the company has several grades or tier levels. Be sure to seek transparency. The best place to do this is usually early on with the recruiter. Discuss executive policies in advance and ask for an understanding of the compensation & grading structure in the organization you are considering joining.
All industries are different in terms of their compensation.
Kim Feil – “If you aren’t happy with the bonus, try negotiating a spot bonus. Sometimes, companies may not be able to offer a larger annual bonus for accounting reasons but could provide a lump sum one-time payment. If there is low elasticity in your company (e.g. slow growth industry), try asking for a sign-on bonus. Until you receive the offer, the power is in the employer’s hands. Be wary of unraveling the offer negotiation process. However, be sure to state your compensation up front. Nonetheless, maximize the best base salary you can at the outset because annual raises are typically capped and usually quite small (1% to 3%). Some annual promotions are also capped at a specific percentage in a particular grade, so it helps to also change grades as you move up.”