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Who wants to be the top dog in corporate America? Not as many people as previously thought.
Fewer C-suite executives are aspiring to become CEO these days, Fortune’s Geoff Colvin writes. And while factors like the increasing difficulty of the job—managing unruly employees and growing discontent in the public eye—may contribute to executives passing on the opportunity, Colvin writes that one “little-noticed significant factor” is money.
While the average CEO’s pay has skyrocketed in recent years, that of other C-suite executives, including CHROs, has increased even more.
“There’s less financial incentive to be a CEO,” says Laszlo Bock, former HR chief at Google and cofounder of Humu, a maker of HR-related software. “The compensation of the layer below the CEO has risen at a higher rate than the CEO.”
Even CHROs, who tend to make the least of their C-suite counterparts, “may be making $8 million” annually at the biggest companies, says Bock. That figure is not the norm, although pay packages for HR chiefs have surged thanks to greater demand for the executive role—and its elevated stature.
The median compensation for HR chiefs at the 500 largest U.S. publicly traded companies grew by almost 13% to $2.2 million in 2022, according to an Equilar analysis of HR executive pay trends. The communication services sector offered the most extensive median HR pay packages at $2.9 million, while the energy sector gave the lowest at $1.2 million.
Meanwhile, companies with over $30 billion in revenue awarded HR executives a combined median pay of $3.3 billion.
Though today’s executives receive sizable financial rewards for their ability to deal with new paradigm shifts and, in many instances, are satisfied with their current pay, Colvin points out that “plenty of energetic strivers will still fight to be CEOs.” HR chiefs are emblematic of that.
As my CHRO Daily predecessor Amber Burton wrote last year, CHROs are increasingly contenders for the top job. But that trend may slow if their pay continues ticking upward and they, like their C-suite peers, lose interest in snagging the corner office.
Read the full story here.
Paige McGlauflin
paige.mcglauflin@fortune.com
@paidion
Reporter's Notebook
The most compelling data, quotes, and insights from the field.
Outsourcing labor through contracting has become a popular practice for employers. The number of employers using contract workers on the HR services platform Gusto has increased by 28% since the start of the pandemic.
But these workers often perform the same work as their full-time peers for less pay, fewer benefits, and greater job instability, according to research from the TechEquity Collaborative. To avoid legal, financial, and reputational liability, companies should adopt six responsible contracting standards, including family-sustaining wages and equal pay for equal work, TechEquity Collaborative CEO Catherine Bracy writes.
Around the Table
A round-up of the most important HR headlines.
- After years of remote school and jobs, some young people are entering the workplace without basic social and professional skills. Wall Street Journal
- We're just halfway through 2023, and already, it's a big year for strikes thanks to worsening worker conditions and wages that haven't kept up with inflation. Vox
- Private sector payrolls in the U.S. increased by 324,000 last month, according to ADP, breaking expectations and underscoring a strong labor market. Bloomberg
- Weight loss drugs like Ozempic can cost $1,350 a month for each patient, adding up to tens of millions of dollars for insurance plans. As a result, employers are blocking their access in health plans. Wall Street Journal
Watercooler
Everything you need to know from Fortune.
Concentrated wealth. Employees at the world's 500 largest companies are part of an exclusive set, according to Fortune's 2023 Global 500 ranking released yesterday. Only 2% of the global workforce (or 1% of the world's population) works at Global 500 companies, primarily based in the U.S., Europe, and China. —Paige Hagy
Disney district. DEI programs have been completely abolished in Florida's Disney World governing district. It's the latest in an ongoing feud between Gov. Ron DeSantis and the Mouse House. —AP
Everybody eats. ServiceNow debuted on the 2023 Fortune 500 list this year, crediting its growth to a strategic hiring season and talent mobility. The company has vowed not to lay off a single employee. —Sheryl Estrada
Behind the screen. Hollywood is no longer viewed as the land of glitzy and glamorous jobs. That's due to ongoing strikes and movements like #MeToo that have shed light on some of its most despicable aspects. —Maria Aspan
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