Who Should the CHRO Report To?

“It’s a huge red flag when the CHRO does not report to the CEO.” Is this statement fact or fiction? According to the data, it’s a fact.

‍

Let’s look at some data around Chief Human Resources Officers (CHROs)—where they typically fall in a company’s org chart, and how much they earn in compensation.

CHRO Reporting to the CEO

The findings from Pave’s dataset show that at companies in seed stage, about 80% of People/HR leaders report to the CEO. At later stage companies (1,000+ employees), roughly 85-90% of People/HR leaders report to the CEO.

Why is it important for the CHRO to report to the CEO and not the CFO or COO? Well, put simply, it leverages the HR team as a strategic partner managing a company’s largest expense–compensation spent on employees–rather than viewing HR simply as a cost center.

‍

{{mid-cta}}

Data on CHRO Compensation

While we’re on the topic of CHROs, let’s talk HR compensation. How much do individual contributors (ICs), managers, and executives make comp-wise?

‍

Our findings focus on all public companies in Pave’s dataset, drill in on all USA locations, looking at total cash (base salary + target variable) benchmarks in the 50th percentile.

The benchmarks for ICs (P2-P5) range from $100,000 to $194,500. We see a dip at the lowest level of manager (M3) down to $151,420, but then it increases to $300,000 at the M6 level. The benchmarks jump at the executive level. A VP of HR (E7) could expect around $397,066 in target cash, while a CHRO might earn $433,500. 

Equity Compensation for HR Leadership

I’m also going to call out the total equity ownership benchmarks for VPs of HR and CHROs, because they are staggering. 

‍

As we can see below, the benchmark for a VP of HR in the 50th percentile is $2.2M in equity ownership. For a CHRO in the 50th percentile, it’s a massive $8.8M.

Careers in HR are not easy. But they can certainly be lucrative if you make it to the C level.

‍

Have thoughts on these findings? Join the conversation on LinkedIn.

‍