24 August 2006 | Rebecca Ellinor
The highest-paid chief purchasing officers at global companies receive around £375,000 in salaries and bonuses.
The figure is revealed in research conducted by purchasing recruitment firm Purcon. Executive Remuneration Within Procurement
- thought to be the first such study in the UK - found that purchasing salaries are in line with most other functions, although a lack of information makes it difficult for executives to know the market rate.
The median salaries of the 121 top purchasers surveyed is £85,000 and for CPOs £130,000. For CPOs at FTSE 100 firms it is £150,000. And this rises to around £250,000 when other bonuses are included.
Most CPOs (94 per cent) are happy with their remuneration, but they want responsibility or autonomy, interaction with the board and recognition for their achievements.
Report author Jenny Cooke, senior manager for compensation and benefits at Purcon, said she expected more CPOs to reach board-level in the next few years. "Organisations recognise procurement's contribution as vital to business success, so executives have a relatively high corporate profile," she said.
Cooke added non-procurement experience was also beneficial. "Executives ranked business acumen, leadership skills, and a strategic perspective as important 'broader' skills for a CPO, but stated clearly that these need to be backed by sound procurement knowledge."
The study found that many top roles are a blend of strategic and operational responsibilities, with the mix affecting salaries. Pay for executives with 100 per cent strategic focus are lower than those with 75 per cent strategic and 25 per cent operational focus.
"This suggests that the ability to operate at a strategic level is enhanced by maintaining firm links with the operational side," said Cooke.