Elevated in prominence over the past few years, CIOs now an integral part of the C-suite, with salaries and compensation packages now commensurate with that stature.
“As key officers of their companies, technology leaders have entered a more lucrative compensation bracket,” notes Martha Heller, CEO of Heller Search Associates. Since 2023, compensation for CIOs and CTOs has increased by more than 7% and over 20% since 2019, according to Heller.
“This growth is evident in both base salaries and equity packages,” she says. “The primary driver behind this trend is the evolving reporting structure, with over half of CIOs now reporting directly to CEOs, a significant shift from five years ago when at least 60% reported to a lower executive level.”
The COVID-19 pandemic was another catalyst, having collapsed five-to-10-year salary timelines into two years, she says.
“Compensation is certainly increasing, and as CIOs continue to achieve more and more responsibilities, we fully anticipate that these levels continue to increase,” agrees Craig Stephenson, managing director of the North America technology and digital officers practice at Korn Ferry.
The search firm is seeing higher pay across the board in all industries. “If you bring the right portfolio of experience,” including data knowledge, business acumen, and information security, “I think any industry will pay relative to their market for their selection of a CIO,” Stephenson says.
CIO packages often include stock options, relocation expenses, and hiring bonuses, says Victor Janulaitis, CEO of consulting firm Janco. “Typically, [CIOs] have 401ks and as part of the negotiation process, they’ll negotiate a lump sum that will offset the cost of that loss” from leaving their current job.
The rise of retention awards
With technology initiatives increasingly critical to business success and board-level priorities, companies are offering substantial retention packages to tech leaders, further contributing to the overall rise in compensation, Heller says.
“Additionally, private equity-owned businesses now recognize that effective technology leadership extends beyond cost-cutting measures,” she says. “The maturity of the technology team and infrastructure plays a direct role in enhancing the company’s valuation. So, technology leaders are receiving a greater share of the company’s equity than in previous years.”
A retention bonus can be equivalent to an annual bonus or include an increase in the number of restricted stock units in the technology leader’s portfolio, Heller says. It typically is not an increase in base compensation, she adds.
“Regardless of the actual mechanism involved, the key point is that technology initiatives are so key to a company’s success that CIOs and CTOS increasingly are offered financial rewards to stick around to see the transformation through,” Heller says.
Stephenson echoes this, saying Korn Ferry is also seeing more retention awards being offered to CIOs “who are driving the desired impact across the enterprise.”
Compensation plays a key role in loyalty and retention, he says. While this is not a new phenomenon, there has been a lot of CIO movement in the past several years “and I don’t think compensation has had the same impact that it’s had in the last six to 12 months,” he says.
In the second half of 2020 through 2022, CIO turnover “was frenetic, there was a lot of movement and people were moving for money,” he explains. Now top CIOs are being offered a three-year retention award.
“CEOs and boards are trying to retain some semblance of order and avoid having too many turnovers at the top of the house,” Stephenson says.
The AI factor
The push for AI initiatives is another reason CIO salaries and compensation packages are on the rise.
“The strategic importance of technology leadership has never been greater, especially as organizations attempt to tackle information security, artificial intelligence, cloud transformations, etc.,” Stephenson says.
CIO and CTO positions have become much more important as leadership is starting to look at AI, Janulaitis says. However, CIOs are also held responsible when AI initiatives don’t pan out.
“AI projects are not always as successful as they could be” if they don’t have good sponsorship, lack quality data, or chatbots are not re-engineered as needed, he says.
When AI projects peter out, frustration builds, and “the fall guy happens to be the CIO,” Janulaitis says. When a CIO is replaced it’s with someone who has AI or machine learning experience who knows how to make those initiatives successful, he says. “That’s what’s driving salaries up. If you’re a CIO who is successful, lo and behold they entice you to leave your organization.”
This is creating a need for more competitive compensation packages. The pay increase varies depending on the size of the organization. CIO compensation increased 7.48% on average among large organizations and 9% among midsize firms in the past year, according to Janulaitis, who bases his research on salary surveys, proprietary data, and recruitment of CIO candidates.
The median pay for a CIO at a large enterprise is $196,000 and that figure is “well over $250,000 at Fortune 50 companies,” he says. The median salary is about $176,000 for CIOs at midsize organizations, according to Janulaitis’ research.
The flipside of the AI equation is true for CIOs out of work, Janulaitis argues, taking them anywhere from 90 to 120 days to find a new position if they do not have AI or machine learning experience.
“I’ve talked to people who are out of work and have legacy experience and can’t find a job, so they will do contract work, hoping they can find a position — but it’s really hard to find a job as a CTO or CIO if you are not currently in that role,” Janulaitis says.
Matt Richard, CIO of the Laborers’ International Union of North America (LIUNA), isn’t sure whether AI is having a big impact on salaries and compensation yet.
“Within the network of CIOs I’ve spoken to, I don’t see any impacts, be it significant [pay] increases or any sort of decreases with the advent of AI entering the workplace,” Richard says. “I don’t know if that’s just because AI is so new and everyone’s sort of getting their feet wet and leaders aren’t fully seeing the value of it yet — or compensation isn’t translating.”
He believes compensation increases are due more to the fact that CIOs are now heavily involved in business decisions and more deeply integrated into business units.
“I have seen that my compensation has changed in the last five years as I’ve become more integrated into business operations, but I’m not sure the business knows how to use AI yet,” Richard says. “Frankly, we’re finding it expensive.”
He cites products like Google Gemini and Microsoft Copilot at around $360 per user, per year, as examples. “That value and productivity dream those tools are supposed to give us isn’t translating the way people should see,” Richard says. “What I’m hearing is when we’re piloting these tools, it’s not all 500 users who are finding it a valuable tool, and I’m not seeing a bunch of productivity gains.”
Other CIOs have also expressed reservations on copilots providing the kinds of advances expected of them.
Traits that make CIOs more marketable
Stephenson says Korn Ferry looks for CIO candidates who are very capable in three areas of leadership, the first being functional; people who have a good handle on the broad tech stack and familiarity with infrastructure, cloud, and software engineering, Stephenson says. “The broader the better.”
They also want to see candidates who can demonstrate enterprise leadership. “That’s a refined skill that takes a lot of experience and is really different than coming up in the tech organization,” he says. This is a CIO who is the point person driving tech strategy and planning for the organization.
“You need to secure and drive a lot of alignment across functional collaboration,” Stephenson says. Historically, IT professionals who have come up through the organization are more vertically aligned if they started in infrastructure, for example, and have branched out and operate more horizontally.
“That’s being an agile leader who can handle and manage ambiguity and communicates very effectively and has stakeholder management capabilities,” he says.
The third area is the transformational leader: someone who can drive process improvement and effective change management, creating a mission and purpose within the organization, Stephenson says.
“Those are three things we look for in our clients,” he says. “They command top dollar.”
Heller agrees. “I see companies that have CIOs who have commanded credibility, leadership, they understand the business, they are great storytellers — and there aren’t many of them.” CIOs who are “transformation people and change agents” and have “all of tech covered, that person is making a ton of money.”
The CIOs with the highest level of those capabilities are “getting a big bump in compensation,” Heller adds.
Whereas 10 years ago the CFO, COO, and CEO were in “their own world” and the CTO and CIO were “another layer of C-suite executives; in the last five years “there has beensome recognition that chief information officers are just as important,” Richard observes. “We’re tasked with understanding how all these systems integrate and job processes integrate across all business units,” and this is driving salaries for CIOs and CTOs “closer to the CFO role.”
He adds, “I would argue that the person running all of the technology has a far deeper understanding of the day-to-day operations of an organization than the person in charge of the money.”
What the current job market looks like
The market for CIOs “remains extremely active” and competitive, Stephenson says. However, “It’s almost a tale of two markets, in a way. The barometer I love to use is we’re busy with lots of private equity, so from my perspective, the market is hopping.”
But two things are happening. “I think in general … the pandemic was a jolt to business and economics,” he says. “So people hired too many people, including tech people.” Then there was the push to implement AI or generative AI — or no one would invest in your business, Stephenson says.
“I feel like we’ve been in an AI bubble and think we’re going to see a real lack of return on your investment and you’re going to need those folks,” meaning the CIOs who can turn AI initiatives around. While the learning curve for these initiatives will be annoying and slow people down, he says, they will start to help, and overall, companies will see productivity gains from AI.
“My point is there is a lot of confusion there,” Stephenson explains. Politics is also impacting the market for CIO talent.
“Right now, the uncertainty of the [presidential] election and the whole AI distraction” is top of mind, he says. “All of that has created some hesitancy in some companies to swap out their CIOs and some hesitancy for CIOs to leave. … Once we get closer to the election and we start to have clarity, CIOs will start to move on.”
Stephenson predicts that toward the end of the year through at least the beginning of 2025, there will be heightened activity in job movement.
While the executive job market is “just fine right now,” in the fourth quarter, “I give the market a sold B minus for CIO job seekers,” Stephenson says. “It’s an okay market. There’s corporate bloat, but at the same time, smart tech leaders are a must-have for businesses, not a nice to have.”
