Secrets Behind Paychecks of CIOs

Bangalore: Since the advent of neoteric technologies, one question that has raised debate over time is the financial worth of a CIO. Can it be measured in terms of a CIOs expertise or is it correlated to the revenue roped in by an organization? Whatever be the case, it seems some CIOs are ‘raking the moolah’ by meeting the business metrics and financial targets, reports Maryfran Johnson of CIO.

According to Lidia Fonseca, CIO of LabCorp, IT executives are measured and paid in the same ways as other senior officers. She states, “For us, it's not just aligning with the business. IT has to be ‘in’ the business. That has been a key driver in being an effective CIO.”

Senior Editor Kim S. Nash of CIO, rummaged through Fortune 1000's latest proxy statements with the intention to find those CIOs making extravagant amount of money.  Forty-five executives made the cut out of which included Harvey DeMovick, EVP, customer services organization and IT of Coventry, who takes home a mind numbing $4.5 million paycheck. His counterpart, Keith Halbert, former EVP and CIO of United Continental Holdings fares even better with an impressive $ 5 million pay package.

Nash also made a detailed effort to find the criteria based on which the paychecks of these CIOs were calculated among which included company profits and sales revenue.

One of the key findings of Nash’s research was the fluctuation of the pay package of a CIO to as much as 40 percent. Wayne Shurts, CIO of Supervalu comments, “Anything we do in IT must tangibly affect something that our customers can feel [or] that our Profit & Loss sheet can see. Even just five years ago, how much did we talk about IT and the [corporate] revenue line at a company? Very little. Today it's a big thing.”

As such, the value of stock and options grants for CIOs earning millions depends to a large extent on the company’s stock, making it one of the most important criteria to measure the worth of a CIO.

Thus, enterprises formulating IT strategies, trying to achieve the financial metrics, that were once the burden of the CEO and CFO only, have been taken over by CIOs enabling them to gain stature and influence in an organization, justifying the hefty paycheck that they are conferred with.