The four highest-paid CIOs in our tally all have something in common: a major job transition. Three of the four CIOs started new jobs, and one left his CIO position but stayed on as a consultant. Each of these tech leaders negotiated an extremely lucrative transition.
Tim Theriault, who stepped down last June from his position as global CIO for Walgreens Boots Alliance, earned the largest of the 25 CIO pay packages we studied.
Theriault received a $13.6 million compensation package that included a giant parting payment of $8.5 million, as per his employment agreement with the $103 billion pharmacy giant. (Walgreens merged with Alliance Boots in December 2014 to become the largest retail pharmacy in the U.S. and Europe; the company has a presence in 23 countries.)
Theriault also negotiated a consulting agreement with Walgreens Boots Alliance that pays $40,000 a month in return for providing advice on a part-time basis. Among Theriault’s duties as a consultant are: “providing input for global involvement of architectural/technology choices, including software approach and advising on transformational programs, advising and supporting the cyber-security program, and advising on merger and acquisition integration and Global Platform Strategy matters,” according to the company’s most recent proxy statement.
Theriault’s initial consulting agreement was for a five-month term. A second agreement extended his $40,000/month consulting role though October 2016, with automatic extensions in two-month increments.
The second highest-paid CIO in our tally is Mike McNamara of Target. His 2015 pay package was worth $10 million.
McNamara joined Target as EVP and CIO in June of 2015, taking on responsibility for the retailer’s technology team and long-term IT roadmap for its stores, online and mobile assets, distribution centers and headquarters. Before joining Target, McNamara spent 17 years at European-based retailer Tesco, where he most recently served as CIO.
“To attract Mr. McNamara to Target, he received a sign-on bonus of $750,000, pro-rata equity grants consisting of PSUs and PBRSUs valued at $2.2 million and a Strategic Alignment Award valued at $2.5 million,” the company said in its proxy statement. McNamara’s sign-on compensation is “reflective of [his] significant retail experiences and was designed to orient a meaningful portion of [his] compensation to common goals shared by the other NEOs on terms consistent with the awards granted to Target’s other executive officers,” the company reported.
In addition to the sign-on cash and equity, McNamara received a $468,462 salary, $432,100 in performance-based cash bonuses, and an additional $3.3 million annual stock-award grant. Target also paid $271,229 in relocation costs for McNamara.
The third highest-paid CIO is Philip Fasano, EVP and CIO at AIG, who earned both the highest salary ($1 million) among the CIOs included in our tally and the largest cash bonuses ($4.4 million). Fasano joined AIG in October 2014 from Kaiser Permanente, where he was EVP and CIO.
Fasano’s total 2015 compensation was valued at $8.4 million. That included a one-time bonus of $3.4 million that AIG paid to make up for compensation foregone from his former employer. It also included a $1 million installment paid as part of a “transition award” related to retirement benefits foregone from his former employer. The transition award will continue to benefit Fasano, who’s set to receive another $1 million in January 2016, $1 million in January 2017, $1 million in January 2018, and $4 million in January 2019, provided he remains with the company.
AIG also picked up the tab for $112,911 in housing expenses related to Fasano’s relocation, including utilities and rent. On top of that, AIG paid $116,456 representing the reimbursement of taxes owed on Fasano’s temporary living expenses.
Tyler Best, CIO at Hertz Global Holdings, earned the fourth-largest pay package among the 25 CIOs.
Best was named CIO of Hertz Global Holdings in January of last year. As part of his employment agreement, Best received a one-time cash bonus of $2 million to replace awards forfeited at his former employer.
Best’s $6.6 million pay package also included: a $780,000 performance-based bonus, and stock and option awards valued at $3.1 million. Among the perks Best received was $66,772 that Hertz paid to cover lodging and transportation expenses for travel between Best’s home in Michigan and the company’s headquarters in Florida.
In justifying the $780,000 performance-based bonus, Hertz outlined a number of improvements that Best achieved in his first year as CIO including: developing an IT strategy and recruiting experienced IT professionals; implementing cybersecurity enhancements; and adopting cost-saving technology arrangements including a deal with IBM that will significantly reduce Hertz’s spending on legacy systems.
Best’s past experience includes senior IT roles at Vanguard Car Rental (Alamo and National brands) and Budget Rent-a-Car.
Here’s a breakdown of these four IT executives’ 2015 pay packages:
Tim Theriault, former EVP and global CIO, Walgreens Boots Alliance
Stock awards: $2,440,329
Option awards: $699,601
Change in pension value and nonqualified deferred compensation earnings: $4,156
Perks and other compensation: $8,960,890
TOTAL 2015 COMPENSATION: $13,578,312
Mike McNamara, EVP and CIO, Target
Stock awards: $8,015,929
Perks and other compensation: $293,636
TOTAL 2015 COMPENSATION: $9,960,127
Philip Fasano, EVP and CIO, AIG
Stock awards: $1,606,091
Change in pension value and nonqualified deferred compensation earnings: $10,665
Perks and other compensation: $250,471
TOTAL 2015 COMPENSATION: $8,397,689
Tyler Best, CIO, Hertz Global Holdings
Stock awards: $1,543,625
Option awards: $1,600,002
Perks and other compensation: $78,648
TOTAL 2015 COMPENSATION: $6,556,121