Factors Affecting Pay of A CIO

Bangalore: Contrary to the original belief, a CIOs pay package need not always be akin to an organization’s fiscal gain. There are various other factors at work that determine the paycheck that a CIO will ultimately take home with, reports Caron Carlson of FierceCIO.

Initially, a CIO’s remuneration was largely accounted to the overall performance of the IT sector. While this traditional practice is still adhered to by some companies, others have resorted to base it on the financial targets set by the board executives.

Moreover, the performance of the other departments in an enterprise as well as the relative marketing dynamics set the benchmarks based on which a CIO’s paycheck is evaluated. Additionally, the macroeconomic variables at play are also considered before finalizing the pay package.

For example, Wayne Shurts, CIO of Supervalu, who pocketed a paycheck of $1.3 million last year, was left without any bonus along with his C-suite counterparts, which can be alleged on fall in share prices of the company.

Interestingly, a CIO’s compensation can oscillate to as much as 40 percent on a year-to-year basis which mainly comprise of cash, stock and other options. Apparently, FedEx CIO Rob Carter was handed a $450,000 cheque in compensation in addition to the access of the company jet for personal use besides other security services, according to Network World. For few fortunate CIOs, the total compensation received can account for almost 80 percent of their salary.

Thus, when the compensation of the CIO is directly proportionate to a company’s financial goals, he can be expected to take some pressure off from the CFO as well as the CEO in meeting the same. In other cases, it is beyond the reach or comprehension of a contemporary CIO as when it is correlated with the return on invested capital of a company.