CHRO Pay Trails Other Top Executives

By Stephen Miller, CEBS Nov 27, 2016

A  new study of executive compensation reveals that chief HR officers (CHROs) at private U.S. companies are expected to have earned a median salary of $117,000 in 2016—which is 6.4 percent more than what they made in 2015. The median CHRO bonus is expected to be $15,000—a 20 percent increase over 2015.

The findings are reported in the 2016-2017 CEO and Senior Executive Compensation Report for Private Companies, published by the Chief Executive Group, a Stamford, Conn.-based research firm, and based on compensation practices from more than 1,300 companies. The firms were surveyed in April through June 2016 about their 2015 fiscal year compensation levels and practices, as well as their current and expected cash compensation levels for CEOs and senior executives in 2016.

Compared to Others

In 2015, the median salary for a CHRO at a private company comprised total cash compensation that was less than that for other senior-level positions, the report shows.

“It is interesting that the HR head made less than the other senior executives at most private companies, not just on an overall median basis but even in each company size group—and company size is a big driver of executive compensation,” says Wayne Cooper, chairman of the Chief Executive Group. “The gap is less as companies get larger, but there is still a gap nonetheless.”

The reason might be that “many companies still don’t recognize the central role HR has to a company’s success—probably the most important function, since without good people who are aligned and motivated, companies have nothing. But HR is still fighting to get a seat at the senior executive table at a majority of private companies, especially in the middle market,” Cooper notes.

Gender bias also could be a factor. A 2016 study by the Korn Ferry Institute and the University of Michigan showed that 55 percent of CHROs are female, a significantly higher percentage than for other executive roles.

Workforce Size

Company size is a major driver of compensation for top HR executives. The report shows that for 2016, the median total cash compensation (salary plus bonus) for CHROs at private companies is expected to be:

• $93,750 in private companies with under 100 employees ($87,000 salary, plus $6,750 bonus).

• $129,652 in private companies with between 100 and 999 employees ($114,652 salary, plus $15,000 bonus).

• $284,819 in private companies with more than 1,000 employees ($221,401 salary, plus $63,418 bonus).

Regional Differences

By region for 2016, the highest median total cash compensation, $186,500, was expected to be earned by those in the mid-Atlantic region ($162,500 salary, plus $24,000 bonus). The lowest, $103,500, is in the West North Central region ($88,500 salary, plus $15,000 bonus).

In addition: Major metropolitan areas showed higher median pay for CHROs in 2016. The median bonus for private-company CHROs across industries was 10.9 percent of salary. Higher CHRO bonus percentages were found in industries that have greater turnover, have more regulation or are going through major shifts in skill requirements.  

Senior Executives’ Total Cash Compensation at Private Companies in 2015

Position

Base

Salary

(median)

​​Annual

Bonus

(median)

Total Cash

Compensation

​CEO​​$250,000​$75,000
$325,000
​President​​$208,035$36,000
​$244,035
​Chief Operating Officer​​$160,000​$27,250
$187,250
​Chief Financial Officer​​$160,000$25,000
​$185,000
​Chief Marketing Officer​​$150,000$25,000
​$175,000
​Chief Sales Officer​​$150,000$40,000*
$190,000
Chief R&D/Engineering Officer​​​$150,000$15,000
​$165,000
Chief Technology Officer
​​$135,000​$12,500
$147,500
Chief HR Officer​​$110,000​$12,000
​$122,000


* Including commissions

Source: Chief Executive Group.



Stephen Miller, CEBS, is an online editor at SHRM.

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