CIO salaries have risen 37% since 2015, according to a Korn/Ferry International analysis reported by the Wall Street Journal. The average Fortune 500 CIO receives $2.6 million in compensation, a significant increase over 2015's $1.9 million. Long-term incentives saw an increase of almost half a million dollars in 2017 to about $1.74 million, a change from the three previous years, which saw long-term incentives of about $1.25 million.
Many CIOs have at-risk compensation plans, where part of their compensation is tied to success in meeting corporate and technology goals. The at-risk segments of CIO compensation rose from 58% in 2016 to 68% in 2017, according to the report.
The CIO has also assumed more duties and responsibilities, such as introducing new business models and serving as part of the company's public face by pursuing customers and driving revenue.
There's no easy spot on the executive board, but with technology and cybersecurity at the forefront and splashed across headlines, CIOs' jobs aren't getting any easier.
The increase in at-risk compensation certainly holds CIOs more accountable for their actions in office, but with 60% of CIOs spending five years or less in their roles — among the shortest tenures in the C-suite — there are many temporal limitations on how performance is measured. Long-term strategies often extend across multiple tenures, and the CIO in office at the time these strategies fail or reach a milestone is the one to reap either the punishments or rewards.
The short tenure may come as a surprise, as close to 40% of CIOs said they felt "very fulfilled" in their roles. As higher-level decision makers, CIOs are often bound to noncompete contracts that make it difficult to take up the same line of work at a competing company offering a better salary.
So what pressures are making the job so transient?
Within the C-suite, CIOs often struggle to get non-technical executives on board with their projects, especially because IT is often seen as a cost center. Almost 90% of executives find obstructive barriers between the CIO and CFO, and just over one-third of CFOs and CIOs think they have an excellent relationship with one another. This makes getting big IT projects off the ground potentially arduous and challenging.
Handling the tech talent shortage is another challenge. The market loses more than $6 billion annually from mishandling of new tech, and a lack of cloud talent can cost individual companies more than $250 million a year. Specialists in incredibly advanced tech, such as artificial intelligence, can run a company six figures in compensation — sometimes even single or double-digit millions.