They say it’s not what you know, but who you know that can help you get ahead in your career.
According to a new study from the Chief Marketing Officer (CMO) Council, there does seem to be some weight to the latter part of that thinking. Results from the CMO Compensation Report show there appears to be a correlation between the peer company CMOs keep and the money they make. The most highly paid CMOs in the study (those who make more than $500,000 annually) have created close ties with chief financial officers and chief information officers
The 36-page report marks the first comprehensive compensation study of its kind completed by the CMO Council, a San Jose, Cali.-based network of chief marketers that has more than 7,000 members in 110 countries (more than 600 of which are in Canada). It includes numerous insights about senior marketing executives’ salaries, from the correlation between base compensation and their company’s size to the disconnect between compensation and job title.
Marketing spoke with the report’s author, Dr. Kimberly Whitler—a seasoned senior marketing executive who previously worked at Procter & Gamble, PetSmart and David’s Bridal—and CMO Council executive director Donovan Neale-May about some of the key findings from the CMO Compensation Report:
The study shows that CMOs working at larger companies make more money, but it also shows another correlation – this one perhaps less obvious – related to compensation. This one relates to the alliances CMOs form with fellow executives. CMOs making less than $100,000 tend to form more alliances with sales. “I’m not saying that forming an alliance with sales is unimportant,” said Whitler, “but the more you make at the high end, [those CMOs] tend to be forming really strong alliances with CIOs and CFOs.”
Looking at compensation beyond base pay, the study found that 85% of CMOs receive bonuses. Neale-May said he found that somewhat surprising since that today “it seems like bonus has become part of the pay.”
When comparing bonuses at B2B, B2C and hybrid companies, the results show 89% of CMOs receive a bonus at B2B companies, compared to 79% at B2C companies and 84% at hybrid companies.
Whitler noted that while the base pay of B2B CMOs tends to be a bit lower than their B2C counterparts, the B2B CMOs tend to make more on the bonus side. “B2C COMs tend to make more in long-term compensation—that tells you the compensation structure for B2C CMOs is more focused on long-term impact, while the bonus compensations from B2B CMOs are more focused on short-term impact,” she said.
The study showed that only 48% of CMOs in the study feel fairly compensated. On one hand, the low figure surprised Whitler. On the other hand, she understands what may have caused it: “The expectations of the CMO are unbelievable today. In many cases, they’re expected to drive revenue where nobody can figure out how to drive revenue,” she said. “The question is, does the compensation fit the expectations?” The low figure suggests a minority of CMOs believes it does.
Commenting on the reporting structure and importance of the CMO within that structure, Neale-May said “a true CMO with the full title and full territory… should be a key lieutenant, a key confidant to the CEO” and play a major role in shaping everything from organizational branding and culture to customer experience.
According to the study, a CMO’s compensations is directly tethered to reporting structure. The CMO Compensation Report states that most CMOs report to their firm’s CEO, and the CMOs that get paid more are more likely to report to the CEO. Of the CMOs making more than $500,000, 69% of them report into the CEO. In comparison, only 32% of CMOs making less than $100,000 do the same—20% of that salary segment reports to their president.
For other findings from the CMO Compensation Report, click here.