IT directors who move between sectors can improve their salaries

Bonuses and share options lead to rise in IT directors' pay

IT directors' salaries have started to rise again, with bonuses and share options bumping up the overall remuneration package.

More than a quarter of UKchief information officers have crossed the £200,000 a year barrier and the majority have remuneration packages of between £100,000 and £200,000, according to a survey published earlier this year by CIO Connect, a network of IT directors and research organisations.

In 2003 the average salary for a head of IT was £67,000, according to research from the National Computing Centre.

"As the economy comes out of recession things get easier. There are more jobs around so the price [of doing them] goes up," said CIO Connect chief executive John Handby.

Salaries vary across industries: financial services firms pay the most, and public sector and utilities pay the least, according to the survey.

Fortunately, it has become acceptable for IT directors to work in a variety of industries during their careers.

"Top organisations look at top CIOs, irrespective of which sector they are in. I have moved CIOs from financial services, to retail to telecoms," said headhunter Justin Gilbert of Odgers Ray Berndtson. "It can even be preferable to get someone new in [from a different sector] to get fresh ideas."

How much an organisation invests in IT will affect how much an IT director takes home. But although the percentage of revenue invested in IT can give an indication of how IT is valued at a company, how technology is viewed by the general business is just as important.

"Even if the company spends a lot on IT, if IT is seen as a black hole and resented for that reason, the company will not give you recognition and a pay rise," said Handby.

Whatever image an IT department has within a business, IT directors who show that they work at the heart of the business have a stronger hand during pay negotiations."Be seen to be part of the management team and delivering the commercial exploitation of technology, not just technology per se," said Handby.

Gilbert said, "Increase your earning power by understanding the demands of the business and contributing to business objectives.

"There is a tendency for organisations to think they can get away with paying less for CIOs whose role is babysitting technology."

What really impresses, said Handby, is chief information officers who can show that they have steered an organisation through major change or through a merger or acquisition.

Gilbert echoed this view. A FTSE 100 company could pay its IT director bonuses worth more than 100% of their £250,000 basic salary, he said.

Bonuses have started to take over from share options as the preferred sweetener for business high-flyers, said Gilbert.

www.cio-connect.com
This was last published in June 2004

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