The CMO’s role is expanding, and leading marketers are taking on more responsibility for revenue and growth while building a more influential role in strategic decision-making. With survey results show that CMOs have strong leadership aspirations, now there’s some empirical data to back up their growing clout, courtesy of Equilar.
For its study, Equilar examined US-based or listed public companies with more than $500 million in revenue from fiscal years 2012 to 2016. It then looked at proxy statements to determine cases in which CMOs were disclosed as being within the top-5 employees.
The results show impressive, almost-linear growth in these numbers over the past few years, as seen in the above chart. Equilar recorded 190 such instances in 2016, up from 144 in 2015 and 105 the year prior. Not only has the number of CMOs among the top-5 highest-paid employees more than doubled since 2012 (from 74 to 190), but the growth seems to have accelerated over the past couple of years.
It’s possible that the number of public companies with more than $500 million in revenue grew considerably during the period of analysis, which could in part affect the numbers. (We reached out to Equilar but are yet to hear back.) But the overall trend is largely consistent with research showing that the marketing role’s influence has expanded considerably in recent years. Such trends are detailed in MarketingCharts’ “11 Things to Know About the CMO Role” deck, available here.
How Much Do CMOs Earn?
There’s obviously a wide discrepancy in earnings for CMOs at the companies analyzed. The highest-paid, though, is Charter Communication’s Jonathan Hargis, whose 2016 total compensation exceeded $15 million. Two other CMOs – at Dell Technologies and Palo Alto Networks – surpassed $10 million in total compensation last year.
Interestingly, those top 3 had very different pay ratios in comparison to their company’s CEOs. Despite being the highest paid overall, Charter Communication’s CMO made less than one-sixth of his company’s CEO’s total compensation last year. The CMO at Dell Technologies, meanwhile, made more than 3 times as much as his company’s CEO. The reasons behind these disparities (and the greater pay for CMOs in a couple of cases) are tied to the specifics of how compensation is awarded in certain ways across years. Generally speaking, CEOs’ total compensation is about 2-3x that of the CMO, per the report.
Overall, the median total compensation for CMOs jumped by 24% during the 2012-2016 period of analysis, slightly outperforming the rise in compensation for CEOs (22.2%).
Gender and Other Findings
The Equilar analysis revealed that women are vastly underrepresented in chief marketing positions, accounting for just 35 of the 190 top marketing executives disclosed in public filings. On a more positive note, the number of women in top marketing roles has quadrupled since 2012 (8), and women’s representation in these top positions has also increased, though it remains low (from ~10% to ~18%).
Interestingly enough, the median total compensation for chief marketers disclosed in public filings has been higher for the women in these leadership positions than for the men since 2013. The gap was particularly large last year, when the median pay for women was almost 36% higher than for men ($1.64 million versus $1.21 million). The pay average for women comes from a small sample size, though, it’s worth noting.
A separate recent study from Act-On Software came to a different conclusion. It analyzed 80 CMOs in the UK from the FTSE100 and 70 in the US from the Inc. 5000 list of mid-size companies. While it’s unclear how these CMOs were selected (and as such how representative the data is), the analysis found that the majority in the US (39 of the 70) were women. In the UK, 60% (or 48) of the 80 were men.
Other highlights from Act-On’s report reveal that:
- The CMOs served their companies for an average of 5 years in the US and 8-9 years in the UK before earning their titles;
- More than one-quarter in the US (27%) and the UK (30%) had advanced degrees; and
- Almost 9 in 10 CMOs in both the US (89%) and UK (86%) were promoted from within the company rather than coming in from an outside agency.
For more on the CMO role, download MarketingCharts’ deck here.