Salary of a Chief Executive Officer in the US
In the United States, the average salary for a CEO of a publicly-traded company was $12.3 million in 2020, according to data from the Economic Policy Institute. This is significantly higher than the average salary for a private company CEO, which was $1 million in 2020 according to PayScale data.
However, CEO pay at the largest publicly traded companies is even higher. According to the Wall Street Journal, in 2020 the median pay for CEOs of S&P 500 companies was $12.7 million.
It's worth noting that CEO pay can be even higher in certain industries, such as technology and finance, and in certain regions, such as Silicon Valley.
It's important to notice that the CEO's salary also could be composed of different components such as base salary, bonuses, equity, and other benefits, which can make the total salary more complex to calculate.
How to become a CEO in the Technology Industry?
Becoming a CEO in the technology industry requires a combination of technical knowledge, business acumen, and leadership skills. Here are some steps you can take to become a CEO in the technology industry:
- Acquire education: Consider obtaining a degree in a relevant field, such as computer science, engineering, or business. This will provide you with the foundation of knowledge and skills you need to succeed in the industry.
- Gain experience: Start your career in the technology industry by working in a related field, such as software development, IT, or product management. Work your way up through the organization, taking on more responsibilities and leadership roles as you progress.
- Stay current with industry trends: Stay informed about changes in the technology industry and the specific challenges faced by your organization. This will help you make informed decisions and stay ahead of the curve.
- Network: Build relationships with industry leaders, peers, and other executives. Networking can help you stay current with industry trends and provide you with opportunities for advancement.
- Seek out leadership opportunities: Look for opportunities to lead projects and initiatives within your organization. This will help you demonstrate your leadership skills and your ability to drive results.
- Develop strong communication skills: As a CEO in the technology industry, you will need to be able to effectively communicate with a wide range of stakeholders, including employees, customers, and partners.
- Demonstrate success: By consistently delivering strong results and demonstrating your value, you will increase your chances of being offered leadership positions within the technology industry.
By following these steps and continually improving your skills and knowledge, you can increase your chances of becoming a CEO in the technology industry. However, it's important to note that the specific path to a CEO role will vary based on factors such as your education, experience, and the needs of your organization.
Why do Chief Executive Officers have high salaries?
There are several reasons why CEOs have high salaries:
- Supply and demand: There is a limited pool of qualified and experienced CEOs, and companies are willing to pay top dollar to attract the best talent. This drives up salaries for the top CEOs.
- Performance-based pay: CEO pay is often tied to the performance of the company. If a company is doing well financially, the CEO may receive a larger bonus or stock options.
- Risk and responsibility: Being a CEO is a high-pressure, high-stakes job, with a lot of responsibility. CEOs are responsible for the overall performance of the company and making strategic decisions that can affect the livelihoods of thousands of employees and the wealth of shareholders.
- Comparison with peers: Companies often benchmark CEO pay against that of other companies in their industry, which can lead to a "ratcheting up" of salaries across the board.
- Board of Directors and Compensation Committee: The board of directors and compensation committee are responsible for determining the CEO's salary and are often composed of individuals who are also CEOs or have been CEOs in the past, so they have a good understanding of what the market pays.
- Shareholders' expectation: Shareholders also expect the company to be successful and profitable, and may view high CEO pay as a sign that the company is being well-managed.
It is considered, that CEO pay is a contentious issue and there are some criticisms that CEO pay is too high, not closely tied to performance, and may contribute to income inequality.