CMO compensation: Erosion, stagnation or elevation in 2020?

by | Jun 25, 2020 | Marketing, Public Relations

Many chief marketers are likely to have a disappointing upcoming year as 84 percent surveyed by the CMO Council say their compensation is tied to business performance improvements in 2020. Not surprisingly, take-home pay will likely be less due to the severe economic impact of the global pandemic.

The Council’s new report, CMO Compensation: Erosion, Stagnation or Elevation?, follows Spencer Stuart’s announcement that the average tenure for chief marketing officers of leading U.S. consumer brand companies decreased to 43 months from 44 months.

The research, undertaken prior to the pandemic declaration by the World Health Organization (WHO), tapped perspectives from 150 CMO Council members in enterprises of all sizes worldwide. The CMO Council has 16,000 members in 10,000 companies across more than 110 countries.

While tenure may be shorter in the U.S.-based, big brand companies analyzed by Spencer Stuart, CMO Council findings indicate a high degree of CMO success in raising the stature and influence of the marketing function before the market implosion. Most importantly, marketers believe they have increased C-suite recognition of marketing’s business value creation.

The study revealed:

  • Three quarters of chief marketers report they have gained stature and influence in the past year
  • A substantial 83 percent say marketing is viewed as a vital contributor to business value by executive teams
  • Only 15 percent of marketing leaders failed to meet marketing goals and business objectives in 2019
  • Despite making the numbers in 2019, 57 percent chief marketers expressed dissatisfaction with their current compensation packages
  • Over 65 percent are expecting a compensation increase in 2020; however, the global economic devastation triggered by the pandemic will moderate this
  • An overwhelming 84 percent of chief marketers report their compensation will be tied to business performance improvements in 2020; a very unlikely occurrence for most in the coming year

Additional analytics from the CMO Council goes wider and deeper across companies of all sizes, sectors and geographies. Data sourced from some 325 chief marketer compensation profiles created on the CMO Council’s CMO Compensation portal reveals interesting insights into salaries, benefits and bonuses of marketing leaders working at companies of all sizes around the world.

While the global economy will see an unprecedented downturn in 2020, top female marketers reported improvements in compensation and were able to narrowly outdistance their male counterparts in the compensation race last year.

CMO compensation: Erosion, stagnation or elevation in 2020?

Most notably, female marketers eclipsed their male counterparts in 2019 when it comes to both average annual base salary and bonus. Female salaries were on average $212,898 and their bonuses $56,229, while males earned an average of $209,525 and bonuses of $53,388.

As to be expected, analytics from CMOCompensation.com showed variations in compensation by size of company and number of employees:

CMO compensation: Erosion, stagnation or elevation in 2020?

The CMO Council has previously undertaken a major study to benchmark and understand the key factors influencing chief marketer compensation. It found that chief marketers who report directly to CEOs are likely to earn more than their peers. Additionally, good peer relationships provide an advantage as the most highly paid CMOs have forged close partnerships with chief financial officers and chief information officers.

The new 36-page report is filled with facts, stats, tables and analytics provided by Dr. Kimberly A. Whitler of the Darden School of Business at the University of Virginia. Key findings showed:

  • CMO compensation is directly related to reporting structure. Those making more than $500,000 annually are more likely to report directly to the CEO.
  • The highest paid CMOs have developed strong alliances with CIOs and CFOs.
  • CMOs earning the highest levels of base compensation tend to be focused on driving business performance (e.g., top-line growth, market share, efficiencies, etc.).
  • B2C CMOs have a higher base salary than B2B/hybrid-company CMOs.
  • CMO base compensation is correlated with firm size. The larger the company, the more likely that the CMO will make more in base compensation and the more likely they will have bonus compensation.
  • Digital marketing skills are important. CMO salary tends to increase as their firm’s digital marketing performance improves.
  • Marketing titles (i.e., CMO, VP of Marketing, SVP of Marketing, etc.) don’t significantly correlate with base compensation.
  • Key accomplishments of the top earners (greater than $500,000 base compensation) are centered on restructuring marketing to drive results, improving the yield/accountability of marketing, and building digital capabilities.
  • Bonuses are the most common type of compensation beyond base pay. Eighty-five percent of CMOs receive bonuses with large company CMOs being more likely to have bonus-based compensation.

Download an executive summary here.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter


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