The chief technology officer (CTO) is an integral part of the decision-making team in an organization and generally oversees the technological developments and requirements, leading, managing and sometimes coercing high performance from the technical team.
The CTO not only evaluates short-and-long term technology goals for the business; but is also responsible for finding optimal ways to invest capital and developing policies that use technology to enhance the customer experience.
It’s a role that demands strategic thinking, problem-solving, management and leadership skills—whether focused on infrastructure, team building, planning, or customers – and a fair amount of pressure, as with most executive level roles.
Add to the fact it’s a competitive market for good quality tech leaders and you can see why some CTOs can drive very attractive salary and equity packages.
Before we break down the average CTO salary in the US, it is essential to remember that each role and company are unique in their own ways.
It is impossible to know exactly what CTO salary you might get from any one position, the negotiation will depend on variables outside the scope of this article but, we can start to provide an approximation, averages but alas no guarantees.
Also note that within these average calculations are unknown variables such as share options, often used to entice top quality staff and/or offered as long term rewards to offset short term salaries below market rate. These are particularly prevalent within the start up environment, which makes accurate analysis of senior management salaries quite tricky. But we’ll give it a try!
The average 2021 CTO salary in the US stands at $161,525 per year.
A Chief Technology Officer at the bottom end of the salary range earns $96,915.
Conversely, for a CTO at the top end of the range, the salary is $350,510. The average annual bonus and benefits for a CTO is $11,307.
CTO salaries in the US can also vary based on the business involved.
CTOs in the financial sector earn an average of $205,000 pa.
Not bad for most US locations, though San Francisco bucks the trend on salary (and cost of living these days!).
Determining the average CTO salary US in 2021 for start-ups is tricky. Several additional factors go into figuring out how much they make.
For instance, the founders of a company often take salary reductions, as the equity he holds in the company will be much higher than any other employee. Thus, they take pain today but stand to gain a significant reward in case of a potentially successful exit tomorrow.
Also important to consider what stage the company is currently at when it comes to fundraising. If the company is still looking for seed funding, the CTO salary range will be significantly lower than the average as investors will rarely tolerate big salaries to senior managers at such an early stage. As the company becomes more stable, raises more money and starts to grow then market rate salaries become more acceptable and frankly, the senior team should start demanding them. You should only underpay yourself in extreme circumstances.
Third, the average salary of a CTO can vary based on the negotiating position.
Is the company healthy?
What kind of tactical or strategic decisions are made by you? What is the revenue model?
What does your equity package look like?
How impressive is your resume from a ‘brand-perspective?
All these questions are directed to a CTO when someone decides to move into a high-reward, high-risk start-up.
Answers to these questions have an important bearing while determining his final salary in the US start-up.
It’s impossible to gauge an average start up CTO salary, because of all the variables mentioned but if working at rate significantly below market rate, expect the CTO to be aiming for a good chunk of the equity, as they’re likely to be amongst the key people in any ambitious start up.
The position of a CTO is in high demand in the global market, with demand outstripping supply of good quality CTOs with broad management skills.
The US market is no exception.
A prediction by the Bureau of Labor Statistics in the USA in early 2019 stated that job openings for CTOs in the USA are likely to continue increasing during the next few years.
There will be an exponential growth of businesses based on information systems during this time. Technology is fast moving away from its traditional physical assets and virtual assets based on cloud technology are coming to the forefront. This is one of the prime reasons predicted for this high demand for job openings for the position of CTO. Growth in the internet and mobile usage, increasing emphasis on business solutions and the increased importance of IoT (Internet of Things) and big data on business operations are other important reasons for this demand as well.
This will continue to drive up the value and demand for high quality tech leaders and CTOs.
If you have ambitions for a senior role then opportunity abounds.
If If you have ambitions for a senior tech role then opportunity abounds and you should be building up your skill set and aiming very high. Several factors will determine your final salary package as a CTO, and the more management and softer skills you can add to your technical capabilities the more in demand you will become and the higher your value in the market.
Arm yourself with a wide range of skills and expertise that makes you a must have employee/leader. Then negotiate salary package you deserve and they will be prepared to pay.