Routes to the TopBy Kim S. Nash | Posted 2002-09-04 Print
Fewer than 40 technology executives in the entire Fortune 500 are paid enough to be publicly reported. Here's who made the cut.
Routes to the Top
Of course, getting your name into the proxy is not a definitive measure of CIO stature. Even if you don't make the cut, you still could be one of the top-paid technology executives in the country. For example, a CIO who makes $500,000 at one company might be one of the five highest-paid officers there and would be included in the proxy statement. But at a bigger company, a CIO's multimillion-dollar earnings might be exceeded by five—or more—other top officers.
An analysis of the CIOs in this year's elite 7% can help guide other technology executives to the top.
First, understand that longevity counts. The short tenure of CIOs—typically two to three years—contributes to the field's poor showing. That is, the longer you're at a company, the more likely you are to receive a fat paycheck and bonuses.
Tortora, for example, led technology strategy at Goldman for seven years before she retired in 2001, a 45-year-old multimillionaire. Steve Mnuchin, Tortora's replacement, didn't make the company's latest proxy. He came to Goldman the same year Tortora did, but has spent most of his time in departments other than technology, which he joined in 1999.
Some of the other highest-paid CIOs have been at the same company for many years as well, including Dawn Lepore of Charles Schwab brokerage (19 years), Brian Kilcourse of Longs Drug Stores chain (19 years) and Mike Heschel of grocery retailer Kroger (11 years). (Lepore was promoted to vice chairman of technology and administration in late 2001 and was replaced as CIO by Schwab Executive Vice President Geoff Penney.)
Know, too, that in several industries the top technology executives, even if they are corporate officers, consistently make less than other senior managers. For example, no CIOs appeared in proxies from the biggest pharmaceutical, petroleum, chemical and publishing companies in the U.S.
One more CIO dead zone: diversified financial firms, including American Express, Capital One Financial and Citigroup. The $22.3-billion American Express, for example, is widely regarded as having built a top-notch technology infrastructure. CIO Glen Salow wasn't listed in the company proxy this year, though a vice chairman, the president of the U.S. consumer group and the president of global financial services were, along with the chairman/chief executive and chief financial officer.
That doesn't mean technology isn't important, even critical, to these sorts of companies. But group presidents of geographic areas, heads of research and chief operating officers often occupy the spots that might otherwise be taken by CIOs. Top in-house lawyers and human resources leaders also sometimes end up among the five most highly compensated officers.
By contrast, some industries were favorable to CIOs this year. Electronics companies had seven CIOs listed, and firms in food manufacturing and food retail had six. Health care, specialty retail and commercial banks, each had four. A critical emphasis on logistics and supply-chain issues in these industries—especially in electronics, retail and food—let CIOs shine.
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