As the chief executive officer, the CEO sits at the top of executive leadership teams and often serves as the public face of a company. The job demands significant time and resources, not to mention expertise and exceptional leadership skills. As a result, CEOs typically make a lot of money.
Read on to learn about the factors that influence CEO pay, as well as typical salaries for chief executive officers. We’ll also examine how board management software helps executive teams work smarter while enhancing collaboration.
What is a CEO?
A CEO holds the pivotal role of overseeing the overall management, strategic direction, and decision-making processes within an organization. Businesses entrust the CEO to execute the company’s strategic vision and long-term goals. The CEO typically oversees the executive team, such as the managing director, CFO, and chairman.
CEOs are typically chosen by a company’s governing board of directors. Their performance and salary are determined and voted on by the board.
How Much Does a CEO Make?
CEO salaries vary widely, depending on the size and success of the organization. Salaries can range anywhere from low six figures to several million dollars per year.
Some CEOs intentionally take a smaller salary in return for stocks, benefits, or to show solidarity with the staff in difficult financial times, while other companies increase their CEO’s compensation as a sign of prestige or for exceeding performance goals.
Factors That Influence CEO Compensation
You’re likely wondering: What determines CEO pay? Whether you’re planning to become a CEO or you serve on a board that’s determining what to pay a new CEO, the following factors can all influence CEO compensation.
1. Obtain a Relevant Bachelor’s Degree
The first step involves completing an undergrad program. Prospective CEOs often major in business, corporate law, or another major relevant to their desired career path. Many CEOs hold masters or doctorate degrees, while others rise through the leadership path based on their work ethic and proven track record for success.
2. Build a Career and Gain Experience
A CEO’s compensation is also dependent on their career path and body of experience. A professional with a wide range of experience, leadership qualities, and ability to navigate challenging business decisions shows great potential for being chosen as CEO.
3. Demonstrate Leadership and Achievements
Naturally, you’ll also want to take every opportunity to display leadership qualities and rack up achievements. Take the lead on projects, ask for difficult tasks, and demonstrate tangible business results. Become known as a go-getter with an empathic capability that enhances every team you lead.
4. Build a Strong Professional Network
CEOs typically have deep networks of other high-level business professionals. Consider finding a mentor to help you develop leadership skills and guide you on the path to CEO.
5. Seek Opportunities for Advancement
Lastly, never miss an opportunity to advance your career and take on bigger and bolder projects. In order to reach the position of CEO, one must first become a manager, department head, and executive, while demonstrating success at each stage of leadership.
OnBoard Powers Effective Boards
Choosing a CEO and determining that person’s compensation is an important task that requires full board collaboration. Modern leadership teams frequently rely on board management software to enhance communication, quickly access and review resumes from a cloud-based hub, and vote on candidates for CEO.
OnBoard’s meeting software provides key features and capabilities to streamline board management, from voting and document storage to agenda building, meeting analytics, secure messaging, and task management.
Get started today with our free Board Meeting Minutes Template.
Frequently Asked Questions (FAQ)
What are the Qualities of a CEO?
A CEO must have strong leadership, organizational, problem-solving, and people skills. CEOs in each industry typically possess specialized skills related to their line of work.
How Long Does it Take to Be a CEO?
It can take anywhere from five to 25 years to become a CEO, usually closer to 20+ years of experience. Becoming a CEO of a small or startup company is easier than climbing to the top of a large corporation.
How Old is the Average CEO?
The average age of a newly appointed CEO is 54. However, nearly 30% of new CEOs are under 50.
About The Author
- Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.
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