CMOs and senior marketers often find themselves at the intersection of cross-departmental initiatives, leaving many to bite off more than they can chew. But, as these leaders juggle their varied responsibilities alongside enterprisewide goals, companies may be able to pinpoint performance patterns by looking no further than the CMO's paycheck.
The CMO Council's recent "CMO Compensation Report" provides insight into CMO salaries, incentives, and benefits, as well as CMO expectations and perceptions with regard to fairness and value to their organization. The survey, which comes as an extension of the group's upcoming "State of Marketing" audit, draws its results from 345 participants in an effort to benchmark and understand how compensation impacts effectiveness. On average, as the report reveals, most CMOs make between $100,000 and $350,000 annually, yet only 48 percent of those polled believe they're fairly compensated, highlighting potential problems and opportunities for improvement.
The following statistics examine the current state of CMO compensation and how pay factors into relationships and retention:
- While 54.6 percent of CMOs at large companies (revenue of $1 billion or more) earn more than $200,000 annually, only 31 percent of those at small companies (revenue of $50 million or less) receive the same amount.
- Of those CMOs who earn $500,000 annually, 69.2 percent report to the company's CEO.
- Though the majority of CMOs receive bonuses (85 percent), CMOs at large companies (96 percent) are more likely to earn such incentives than those at smaller companies (71 percent).
- Thirty-eight percent of CMOs qualify for additional perks, 30 percent receive stock options, 28 percent earn equity-based pay, and 7 percent collect commission-based compensation.
- B2C CMOs are more likely to earn $350,000 or more annually (15.7 percent) than CMOs at B2B (7.1 percent) or hybrid (10 percent) companies.
- Nearly 37 percent of CMOs who earn $350,000 rate their digital marketing performance as excellent. However, zero percent of those who rate their digital marketing performance as failing earn more than $350,000.
Key takeaway: For companies looking to cash in on their marketing initiatives, paying these leaders less may not be the ideal way to earn more. According to the report, CMOs with the highest levels of base compensation ($500,000 or more) are more likely to focus on driving business performance (i.e. top-line growth, market share, and efficiencies) as they work to restructure marketing to garner results, improve the yield and accountability of marketing, and build digital capabilities. These top earners are also known for their strong alliances with CIOs and CFOs. Thus, with compensation fairness in mind, one can deduce that those who are paid more are motivated to do more enterprisewide. Nearly 50 percent of CMOs are discontent with their level of pay, yet most earn at least $100,000 annually, which begs the question-what constitutes "not enough" and how much is too much? Company size typically dictates pay rate, of course, but this overwhelming dissatisfaction implies that researchers and businesses alike must dive deeper to determine whether or not compensation truly reflects and impacts CMO performance, engagement, and retention.