Profile of a Typical CPO: Male, 49 and Earning $366,000

Tempe, AZ — June 6, 2007 — The typical chief procurement officer is male, approaching 50 and earns upwards of $350,000, according to a new survey from CAPS Research.

In the study, "Chief Purchasing Officers' Mobility Compensation Benchmarks and Demographics: A Study of Fortune 500 Firms," authors Thomas E. Hendrick and John Ni consider the patterns that determine the likelihood of an individual becoming a CPO at his or her firm or another firm.

The focus of this research was to track the career, functional experiences and educational paths current CPOs have taken to become the top procurement executive at their organizations and the career histories of their immediate predecessors in CPO positions. Current Fortune 500 CPO demographic and compensation information was captured and compared with two earlier studies CAPS Research reported on compensation.

According to the study, the CPO community is predominately male (87 percent) and the average age is 49 years old. Total annual compensation is $366,000 ($418,000 if female), and the CPO has a staff of 247 associates. The average CPO has been in his or her current position for two or more years and reports to one level below the CEO.

Typical CPOs are responsible for an annual spend of $3.5 billion and have 19 years of purchasing experience. They have been with their current firms for less than six years, are the top purchasing executive for the entire firm and have a B.S. in business and an MBA.

According to the survey, average CPOs attained that post when their predecessors retired or they were the first CPO for the firm. They are not likely to be promoted to a level above CPO before retirement, and they have seen the value (in 2006) of their stock option plans and retirement funds fall since 2001 due to variability in the stock market.

Other findings from the study were:

  • CPO compensation, adjusted for inflation, has continued to rise over the time period studied.

  • There are not discernable patterns of previous experience, education or other variables that were observed to be predictors that an individual would become a CPO for his or her firm, or another firm.

  • Except in rare cases, the CPO position is not a stepping stone towards a higher position in his or her firm or another firm. In most cases the immediate predecessor in the CPO position retired or left the company.

  • Titles of CPOs have not homogenized over the time period studied, with a wide variety of titles resulting.




http://www.capsresearch.org/publications/pdfs-protected/hendrick2007.pdf

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