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CTO salaries declined in 2023, as role changes remain strong

Mark Chillingworth Profile picture for user Mark Chillingworth June 3, 2024
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Chief Technology Officer (CTO) roles witnessed a decline in salary levels in 2023, a study of CTOs in venture backed businesses has found. In a year marked by employment challenges in the technology sector, problems with diversity and poor leadership remained entrenched within technology teams. 

CTO base salaries declined by 3.6% in venture capital (VC) companies, according to the CTO Craft survey of its members. Working with recruiters Albany Partners, they found that in private equity (PE) backed companies, the salary drop was even more stark at 14.2%. CTOs in North America are getting the best compensation packages. However, the survey finds that European CTOs are benefiting from a more diverse range of long-term incentives than their peers across the Atlantic. The survey says of this trend: 

As a result, we predict that innovation around how employees are motivated via compensation incentives will stem from the many rapidly scaling sectors of the European market, such as countries like Estonia, which 'has the most startups per capita across all of Europe'.

The study finds that CTOs are receiving stock options that are three times their salary and states that higher equity in the organization increases the CTO's desire to stay in the role. The report says: 

The data is clear: rewarding leaders with the opportunity to generate real long-term wealth is still a strong incentive for retention.

Diversity challenge 

Male CTOs received over twice the cash value of equity as women, and the report says diversity and inclusion programmes are losing momentum. The survey finds that just 5% of CTOs in the UK are women, making the role one of the least likely to be represented by a woman when compared to other leadership roles. CTO Craft describes the CTO role as having a "leaky pipeline" because women on course to become CTO leave the role before taking on the top job. 

In line with a number of studies, CTO Craft finds that women and non-binary CTOs who work fully remotely are likely to remain in the role, with 59% of remote women and non-binary CTOs stating they will remain in the role compared to 41% that work in a hybrid model. 

Interestingly, 98% of respondents to the survey work in hybrid or remote environments. At the recent CTO Craft Con event in London, attendees received a frank description of overly masculine cultures in technology teams from Sarah Persov, Engineering Team Leader at Dojo, the payments technology provider. 

Leadership challenge

VC-backed firms carried out significant staff reductions in 2023, with 44% of organizations taking the survey reporting headcount reductions.

The deepest cuts within the engineering function occurring at Pre-seed/Seed and at Series C+.

This, as it always does, has created uncertainty amongst CTOs, who are, therefore, looking for new roles, with 41% of survey respondents looking to leave their current roles. Over half (65%) said a lack of faith in leadership was the main reason for looking to leave. For 42%, a concern with the culture and performance of the company motivated their interest in leaving, while 33% said poor line management was the main reason. CTO Craft warns companies that as they move from growth to efficiency, it is vital to keep talent to meet these objectives. 

Role changes in May 

In the enterprise technology sector, Freshworks, the SaaS software business, announced Ashwin Ballal as CIO. Ballal will be responsible for the infrastructure, systems and technology operations of the Chennai, India-headquartered business. He replaces retiring CIO Prasad Ramakrishnan. Ballal joins from customer and employee experience technology provider Medallia, where, during a seven-year career, he led the transformation of the IT, corporate procurement, security and workplace services. The new CIO said of joining Freshworks:

In today's tech-driven world, prioritizing the integration of generative AI capabilities isn't just about staying competitive - it's about redefining operational excellence and elevating the employee experience to new heights. I look forward to collaborating with the talented teams at Freshworks to unlock new possibilities and drive transformative growth.

Umesh Parekh, who has significant experience in the education and charity sectors, has joined Somerset House, the central London arts centre, as Head of Information Technology. Remaining in London, Frank Gibson, a veteran of media interim technology roles, has become the Interim CTO for the famous Time Out Group. He will be leading their modernization and innovation strategy. Gibson said of the role: 

I'm looking forward to working with the team to deliver maximum business value for Time Out and all our customers so they can find the best of their city.

Mark Phillips has been appointed Chief Information & Technology Officer for Berlin headquartered biotechnology company Tentamus Group. This follows a three year career with London headquartered healthcare laboratory testing and diagnostic imaging service provider Unilabs. Phillips has also held roles in telecoms, theatre, property, media and consulting. 

Construction and property experienced CIO Gregory Morely has been appointed as the first CIO for Elmdene Group, which is a manufacturer of specialist electronics for power supply. Morley said of the new role:

It's a newly created role to develop and deliver global digital strategy as the business grows and expands its primary brand, Millboard into new international territories.

Another experienced built environment CIO, Phil Brown, is moving on. After 11 years with Amey, Brown is joining PTSG, a private equity-backed maker of equipment for the construction industry. Brown will be leading the development of a largely greenfield IT estate.

CTO Andy Eva-Dale, who described to diginomica how he and his team reduced the energy consumption of the UK Power Networks websites, has moved up to become the CTO of Tangent, the agency that delivered the new sites for UK Power Networks. 

In the USA, healthcare provider Cleveland Clinic has recruited Sarah Hatchett as its CIO following her term as interim CIO since August 2023. Hatchett has been with the organization for over six years in various roles and has led the technology integrations of Mercy, Indian River and Martin Health into the Cleveland Clinic organization. In a similar announcement, Nick Lucius moved up to be the CIO for the City of Chicago Department of Technology and Innovation following a vote by the Council. Lucius has been CTO for the office of the Mayor of Chicago for almost four years. 

Mayor Brandon Johnson says of the appointment:

This is a major step forward in transforming how our city agencies provide services to our city residents. I am confident that with his expertise and years of experience as a technologist, this department will thrive in addressing the barriers between residents and accessing technology across Chicago.

As Chief Technology and Data Officer for the Office of the Mayor, Lucius led the development of the data architecture and infrastructure for public data dashboards and apps such as the Violence Reduction Dashboard and the COVID Dashboard. 

My take 

The CTO Craft study reveals a worrying cultural problem within technology. Given that the majority of the members of CTO Craft are new, modern, digital-first organizations, it troubles me that these outdated and unnecessary attitudes still exist. Clearly, the problem is largely beyond technology and is a societal issue, but that is not an excuse. With technology becoming such an important structure of society and organizations, then it is upon technology leaders and their teams to be exemplary in their behaviour to one another - no matter their gender.  

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