CTO Salary: How Much Do They Make?
Have you ever wondered how much CTOs make? CTO salary may vary depending on the company size, the industry they are in, and the company’s location. If you want to find out the average CTO salary, stick to this article.
What is a CTO
Before we delve deeper into the topic, let us first look back at what a CTO does. Let us define their roles and responsibilities and how they affect the company.
A chief technology officer (CTO) is a company executive who wields one of the most remarkable powers within the organization. The CTO works closely with the company’s chief information officer (CIO) and chief executive officer (CEO).
The main role of the CTO is to take charge of the company’s technical needs. It even includes the company’s research and development. Most often, the position of the CTO is confused with that of the CIO and CEO. However, these three differ a great deal.
Here is a quick overview of how these three positions differ. The CEO is the highest rank in the company. Compared to the CTO, the CEO makes major decisions that can drive success.
The CIO position is what’s often confused with the CTO. Maybe because these two executive positions deal with technology, but focus on different aspects. The CIO focuses more on how technology can improve internal company processes.
All the while, the CTO focuses more on the external elements, which are the customers. They implement strategies and launch products or services that will drive more customers.
How much is the average CTO salary?
According to PayScale, the average CTO salary is $164,349 annually. The salary varies for companies of different industries and locations. But mostly, CTO salary ranges from $90,000 to $248,000.
The CTO is the highest tech executive position, thus the high salary rate. Years back, the CIO functioned as the CTO. However, technological advancement is becoming a staple for every company’s growth. With that, companies saw the need to separate the job of the CTO from the CIO.
Roles and responsibilities of a CTO
What does a CTO do that they are paid so handsomely for? Since the chief technology officer is in an executive position, it is evident that they make critical decisions. These decisions can make or break the organization. Here are a few things that CTOs do within the organization:
Leads the organization
The CTO’s responsibility is to lead the whole technology or engineering department. Their job is to develop department policies and procedures to improve the processes. Another thing to know is that CTOs plan and set strategies using technology to enhance products and services for customers.
Oversee company infrastructure
CTOs oversee the company’s data, security, maintenance, and network. The whole technology infrastructure of the company. Their responsibility also includes planning and implementing technical strategies. Moreover, they manage the company’s technical roadmap.
How to be a CTO?
You can’t just simply decide to be a CTO and apply for the position on a whim. A CTO is a large sea to fill. Most widely established and top-earning companies have strict qualifications for their CTOs.
One of the major qualifications for the position is extensive technical knowledge. As the chief technology officer, you should be knowledgeable in all aspects of technology. To be qualified as a CTO, you need to have a graduate degree in computer science as well as business administration certifications. Some firms even go as far as requiring a master’s degree in computer sciences, information technologies, or even tech management.
Additionally, years of experience matter exceptionally to be a CTO. Ever wondered why CTOs have often been seasoned IT professionals? That is because practical experience is vital in leading a whole tech department. CTOs work their way up the ranks through different organizations. A minimum of fifteen years of IT experience is required for this executive position.
CTO Salary Comparisons
As mentioned before, CTO salary varies depending on the industry, company size, and locations. Now, we shall compare how much CTOs make.
Companies offer different CTO salary rates depending on their funding, revenue, and size. A startup CTO does not earn equal to that of the CTO of Facebook.
According to ZipRecruiter, a typical startup CTO receives a salary range between $91,000 to $155,500. All the while, Facebook Inc. CTO Mike Schroepfer made $21,812,977 in total compensation in 2019.
The large gap between these numbers lies in the company size. It is known to all that Facebook is a social media giant earning billions of dollars per year. Moreover, a company this big requires many management, leadership, and technical skills to flourish. Thus, the justification for their CTO salary.
On the other hand, most startups hold a tight rein on their budget. But not all startups offer the lowest rate for their CTOs. A good CTO is hard to come by. To ensure that they have the best tech leader in the company, they need to offer higher compensation than most competitors.
Luckily, some startups receive better funding. With increased funding, startups can provide a high CTO salary up to $207,000 annually.
Silicon Valley vs. Kansas City
Aside from company size, CTO salary varies for various locations. Silicon Valley companies offer above-average compensation compared to other locations such as Kansas City.
The average CTO salary in San Francisco, California is $194,594 a year. Even a startup CTO in San Francisco goes as high as $292,670. Currently, San Mateo, California has the most active CTO job market with several companies filling this position.
If you look up startups in New York, their CTO’s average goes up to $143,866 per year. On the other hand, the average CTO salary in Kansas City is $175,114 annually.
One of the reasons behind this is the cost of living in the area. Another thing is the tough competition. The San Francisco Bay Area is the home for IT giants. If you want the right people in your team, you better offer them the right price.
Compared to Silicon Valley, Kansas City is a developing area for information technology and tech startups. It is still growing, thus the lower CTO salary compared to California.
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