The compensation for the Chief Data Officer (CDO) role varies by nearly a magnitude! There are two reasons for it. Firstly, the role continues to vary in responsibilities. Secondly, CDOs have become a common occurrence. Hence they are found in all types of companies, from startups to blue chips, and their financial capabilities differ greatly.
Data Scientists, a cautionary tale for the CDO role
A role that has a similar strong variability to the Chief Data Officer is the Data Scientist. Data Scientist packages span from £30,000/year to £200,000/year. The vague definition of the role in its early days and lack of dedicated education tracks means that candidates and roles can be absurdly different. On the bottom end, you have junior individuals compiling reports report and descriptive analytics using Excel and SQL. At the top end, you find academics with decades of experience contributing cutting-edge deep-learning research and working with some of the largest tech companies in the world.
That is problematic since it makes hiring, educating, and progressing individuals harder. As the Data Scientist role is maturing and dedicated educational tracks become available this is slowly resolved though. Today, most will agree that neither of the extreme examples is representative for the Data Scientist role. Data Scientists do use machine learning, for example, but they are also pragmatic problem solvers creating business value and not mere academic output. As time progresses, we hopefully will see decreasing extremes in the role in the market.
Chief Data Officers come in different shapes
The CDO role appears to be further away from an emerging shared definition (in the job market). There are less of them and dedicated educational tracks do not exist, which could be a forcing function. In a previous post, I highlighted the difference in responsibilities CDO job postings outline today (see What is a Chief Data Officer?). It ranges from data governance team leads to data science departmental heads to CDO-CTO-hybrid roles. The context in which these roles are posted range from early startups with minimal cash to top investment banks. Unsurprisingly, compensations can differ by nearly a magnitude!
According to payscale.com, the pay ranges from $124,040 – $307,863 (of 103 reported salaries) with the median CDO income being $178,034 in the USA. I suspect the small number of reports and a lower likelihood for top earners to self-report on these websites skew the numbers. That said the median might not be affected as much. It is hard to tell without more samples and data on the distribution.
Anecdotally, a recruiter who placed multiple Chief Data Officers in London shared his experience with me. Current packages range between £100,000 to £400,000 with the median lying closer to £200,000 rather than £250,000. The mix of base salary, bonus, shares and options naturally further impacts the actual take-home pay/final net value.
Top Chief Data Officer pay
CDOs can compete with the top C-level salaries in the future. See the example of one job posting of an investment bank. The recruitment agency hiring for them advertised the compensation range, which is:
£500,000-£800,000 / $700,000-$1,000,000 / 5,000,000-8,000,000 HKD
The description of the role is equivalent to a data science departmental lead. It focuses on data asset exploitation as well as new product development. The Chief Data Officer will have a high impact and change the earnings of the bank long-term. Getting the best possible person can justify paying a top package.
What does that mean for you?
If you are a CDO or on track to become one, I suggest to analyse the market and take into account responsibilities and type of company hiring. Nevertheless, a range from £100,000 to £800,000 leaves a lot of room for error. A good guide – as always – are your previous responsibilities and salary. You shouldn’t expect to double nor half it overnight. There remains a concern that the role is not as valuable long-term on your CV as long as the real-world interpretation varies so widely.