Preview: The Secret to Becoming a 7-Figure CMO

Here's a sneak preview of a short feature I wrote for Brandweek this week:

What do Cammie Dunaway, Casey Keller, Deborah Wahl- Meyer and Jim Stengel all have in common? Well, each of these execs has managed to snag some of the highest profile gigs in the marketing field. But that’s not all. Each of them also made an exceptionally smooth move to maximize their take-home pay: They took a break from pure marketing, at least for a while. As these and many other high-earning chief marketing officers will tell you, sometimes when you want the most out of your career, you really do have to get out of your career.
Just a few years ago, Fortune 100 companies like Yahoo!, Motorola, Chrysler and Procter & Gamble that were, respectively, courting the marketers above, would have judged them mainly by the quality of their marketing communications: How cool was the logo they’d created; how hilarious was the TV spot running on prime time, etc.
But no more. Just ask a marketing headhunter like Jane Stevenson, who’s a managing partner at Atlanta-based Heidrich & Struggles. Today, Stevenson said, a top marketer aiming for a job at a top company had better do more than market. Preferably, that exec can run a division. Ideally, he or she can run an entire company. And increasingly, the only way for a marketer to amass an arsenal that includes skills like those is to spend years working outside the marketing department itself.
Companies, Stevenson said, “are looking for an experienced P&L leader.” Today, that’s a limited number of people. “The pool is the pool,” she added, “but there aren’t very many great CMOs. There aren’t many who can impact the direction of a company.”
David Gallagher, consumer product practice leader of executive-search firm Boyden Global Exec Search in Atlanta, concurred. “Historically, CMOs used to be highly creative people and were evaluated on how memorable the commercials were,” he said. “Now, marketing is tied in with broader strategy. There’s a bigger seat at the table and [CMOs are] paid a lot more than in the past.”
It goes without saying, then, that these über CMOs are commanding higher salaries from their employers than their forebears. According to Stevenson—whose firm placed Joe Tripodi at Coca-Cola and Keller at Motorola, among others—companies are often willing to cook up compensation packages valued between $3-5 million over three to five years.
Most of the pay comes in the form of options and bonuses. Salaries are generally in the range of $300,000 to $600,000. “It’s seldom less than $300,000 and more like $400,000 to $500,000,” Stevenson said. “Overall pay for top CMOs has risen about 10-20% over the past year,” she added.
Gallagher, who declined to name CMOs he had placed, said the very top people in the profession are pulling down $3 million a year, which has come to include base, bonus and long-term compensation.
“In a lot of companies,” Gallagher added,” the CMO is perhaps the third highest-paid [executive].”

Loot Suits
Anecdotal evidence supports this contention. In the few instances in which CMO salaries have been made public, salaries and compensation approach and surpass seven figures. When John Costello left his CMO post at The Home Depot in 2005, for instance, SEC filings showed he’d been receiving a salary of $725,000 (and would continue to receive that over the ensuing two years.) In 2004, Larry Light, McDonald’s then-CMO, received a $610,392 salary and an $840,000 bonus. During her short-lived stint as CMO of Wal-Mart, Julie Roehm enjoyed a salary of $325,000. This was in addition to a $250,000 signing bonus, stock options valued at roughly $500,000 and an annual performance bonus of up to $400,000.
Money like that (and in case you don’t have a calculator handy, Roehm’s total yearly comp came to $1.475 million) may not turn heads if you’re chumming with hedge-fund managers. But consider that as of May 2006 the Bureau of Labor Statistics pegged the average working stiff’s take-home at $39,190. The BLS’ number crunchers didn’t have a “marketing” category, per se, though the hardworking bloke in the “advertising and related services” area didn’t do a whole lot better: A modest $52,620 per annum was all he could expect. Of course, some did expect—and receive—more than that. In August, Adweek Media asked 1,475 advertising and marketing professionals how the pay was. Some claimed to be taking home more than $300K; 44 of them, to be exact, or 3% of the total.
Gaining membership to that club these days takes more than a firm handshake and some Brooks Brothers loafers. Simply put, the deeper and broader the range of professional experience you’ve got, the nicer your CMO’s paycheck is going to look. The consensus among consultants is that while it’s great to cut your teeth at a marketing “academy” such as P&G or General Mills, you’re going to have to leave the nest at some point in search of general management experience.
Oh yeah, and, it doesn’t hurt to get an MBA from Harvard or Wharton at some point along the way, too.
“Marketers today aren’t just marketing communications experts,” said Peter Kim, a senior analyst at Forrester Research in Cambridge, Mass. “CEOs are looking for general managers of business with that real left-brain ability.”
But why now? Has the game of branding changed so quickly that an “average” CMO, however one wishes to define that. is no longer enough? In a word, yes, according to industry gurus like Kim, who point out that a convergence of social and economic forces has been slowly melding the CMO’s duties with that of the CFO, and even the CEO. According to Kim, these include an overall increase in corporate accountability, especially Sarbanes-Oxley, the federal law passed in 2002. Additionally, the widespread use of contracted consulting services has optimized areas like information technology and is now directing its scrutiny to other operational areas. “Marketing is the last frontier,” said Kim. “It’s been largely untouched.”

A Marketer for All Seasons
Cammie Dunaway, a Harvard Business School graduate who spent 13 years at Frito-Lay before taking over the marketing helm in 2003 at Yahoo!, is a good example of today’s emergent, 21st-century CMO: Highly educated, multiskilled and constantly on the move to amass new experiences. At Frito-Lay, Dunaway was not only credited with coming up with the “Bold and Daring” campaign for Doritos in 2001, but for holding the title of vp/general manager of kids and teen brand, where she “managed volume and profit growth on a $3.5 billion portfolio and leveraged the Internet to reach this enigmatic demographic,” according to a Yahoo! press release. (Dunaway announced this month that she’s leaving Yahoo! and going to Nintendo as evp-sales and marketing.)
One attribute that clearly characterizes the new CMO power class is a CEO-like preoccupation with the bottom line, not just scoring points for creativity. Take Wharton MBA grad Wahl-Meyer, who recalls telling the brass at Chrysler that she was more focused on results than on producing award-winning creative. “I said, ‘If you’re looking for someone to deliver a great TV campaign, that’s not what I’m about,’” she said. “What’s really important are results. Marketers have to deliver on the real practical aspects of driving people to purchase your product.”

How Suite It Is
This new marketing-with-a-dash-of-general-management career track, say analysts and recruiters, is further evidence that the CMO title has gained equal footing with other “c” titles like chief financial officer and chief technical officer.
“At one time it was seen within the company as an expenditure and a necessary evil,” said Thomas Seclow, at the San Francisco office of Spencer Stuart. “But over time, the recognition of marketing as a driver of business has made it more important.”
That hasn’t always been the case. For one thing, the CMO title itself is relatively new. It was largely nonexistent until the 1980s, and really didn’t catch on until the late 1990s. What’s more, skeptics often regarded it as a “lite” alternative to heavier nameplates in the marble corridors of power. A 2005 survey by Spencer Stuart of 500 marketing managers, for instance, found that only 30% of respondents wanted to be CMO someday; the rest had their hearts set on being president, CEO or some other honcho in the executive suite. Seclow said that’s because mainstream management can be more rewarding both in the short- and long-term. “On the general-manager track, you can run a division and you have a better chance of being in line for the CEO or COO job,” said Seclow. “There’s a lot of personal reward to actually managing the P&L.”
While part of this aspirational trend was ascribed to the traditional assumption that marketing people lack the chops to make it in the results-oriented world of general management, Ed Tazzia, managing partner of Gundersen Partners, a consulting and executive recruitment firm in Bloomfield, Mich., suggested another reason: The CMO job itself is so ill-defined that it’s difficult to determine success within its parameters. “It’s stupid,” he said. “No one knows what it means because no one knows what it means to be successful at it.”
Tazzia pointed out that CMOs at top companies are often uninvolved with the marketing of products.
For example, for all his power at P&G, Penn State MBA grad Jim Stengel, who arguably holds the top marketing job in the world right now, has no control over the budgets of individual brands and is credited with creating Marketing University, an in-house, week-long program that retrains marketers in their chosen discipline. In other words, it’s largely a management job.
For his part, Stengel agreed that a lot of his job is consumed with managing, but that’s not the end of it. “While I can’t speak to other CMO roles, the P&G chief marketing officer has traditionally operated similar to the way it does today, with a close CEO relationship and significant management responsibility,” Stengel said. “The CMO is also an integral part of uncovering the best practices we develop regionally in marketing to apply to more brands globally. Industry-wide, more companies are looking to the CMO not [just to] be a business leader, but [to be] an organizational leader. I also believe the CMO is an ambassador in conveying the equity and purpose of the company, internally and externally.”
While Stengel said general management is “definitely an advantage” to a CMO, he rejected the notion that the higher on the ladder you go as a marketer, the less marketing you actually do.
“The CMO role represents a perfect blend of marketing and organizational management,” he said. “For anyone who has a passion for creativity, curiosity towards understanding consumers and an affinity for developing people who are committed to building brands, it’s the best job in the world.”

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