The responsibilities of HR are increasing but is compensation following suit?
By Larry Basinait
As the function of HR expands, its impact on company performance is undeniable. In the United States, the Bureau of Labor Statistic (BLS) projects that job opportunities for HR managers will grow by 5% through 2032, which is faster than the national average for all occupations. In EMEA, HR roles in France, Germany, and the U.K. are among the top 10 jobs, according to LinkedIn. HR executive compensation should be accurately reflected given their increasing responsibilities and impact on company performance.
HRO Today has published its fourth annual CHRO compensation study to garner these insights. For the analysis, we pulled publicly available data on the Fortune 1000 and gathered CHRO compensation data on 177 senior HR executives from those companies, a valid sample of 17.7%. The data was further segmented into Fortune 50, Fortune 100, Fortune 200, and Fortune 500 subcategories for analysis. Within each segmentation, we studied correlations to salary, total cash compensation, and non-cash compensation such as stock options and grants.
We looked for correlations between senior HR executive compensation, company performance, and company size. This included market capitalization, earnings per share (EPS), earnings before income tax, depreciation, amortization (EBITDA), and employee headcount.
To further explore how HR practitioners feel about their organization’s compensation, we surveyed 190 executives from the HRO Today network and compared the survey results to prior waves of the study. Note there are no separate findings for 2021, since the 2020 study was conducted late in the year.
Results of the 2024 study were combined with the Fortune 50 correlation analysis described above to provide a complete and overarching view of the CHRO compensation structure, practices, and perceptions. In 2024, study findings were segmented by the respondent’s location of North America or EMEA.
Below is a preview of report’s findings. To gain full access to the findings, please click here.
- There are five statistical correlations within CHRO compensation and company performance among the Fortune 50. These include total compensation versus EBITDA; total compensation versus market capitalization; restricted stock versus market capitalization; restricted stock versus EBITDA; and non-equity compensation versus market capitalization. These metrics were also the most statistically correlated in 2023.
- Women CHROs in the Fortune 1000 are more highly compensated than their male counterparts. For the third consecutive year, women CHROs in the Fortune 1000 are more highly compensated than their male counterparts. In 2023, women had higher salaries and total compensation than men. However, men earned more among the Fortune 500.
- Most in HR believe their senior leader is comparably compensated with other senior leaders. More than one-half (57%) of HR leaders in 2024 believe compensation for the highest-level executive in their department is in line with the rest of the C-Suite, up for the second year.
- However, HR as a department feels underpaid. About two-thirds (64%) of HR practitioners feel undercompensated compared to other organizational departments, though that improved from 2023, when 76% did not agree that HR departments were fairly compensated.
- Compensation among minorities is comparable to their non-minority counterparts. Three-quarters (77%) of respondents agree that the level of compensation among minorities is comparable to their non-minority counterparts, up from 62% in 2023. This is the same level as in 2020, reversing a two-year decline.
