Salaries in the tech industry: This is what C-level executives earn

The Berlin personnel consultancy Ipotentials has the salary data of executives on the first and second management level in the digital economy viewed. In total, data from 1,779 questionnaires were evaluated. Salaries have increased by 10 percent annually over the past ten years. The average gross annual salary in 2022 was 268,440 euros.

According to the research, there is a strong growth trajectory in C-level salaries: from 2011 to 2022, C-level salaries increased by 10.17 percent per year. Ipotentials cites as a reason that there is an increasing demand for “digital design expertise”, hence the competition for the few top executives that exist. The crises since 2020 would reinforce this trend. In addition, there is a need for executives who can shape a “paradigm shift” – that is, who can fundamentally develop a company further.

On average, the annual salaries of CEOs are between 220,000 and 390,000 euros. This is followed by the salary of C-level executives in Product and Tech with an average of 190,000 to 330,000 euros annually. C-level executives in the commercial area, i.e. sales, marketing, growth or revenue, earn an average of between 200,000 and 320,000 euros a year. They are often measured against short-term goals linked to bonus systems. C-Level people in Operations receive an average of 210,000 to 310,000 euros per year. C-level managers in finance bring up the rear with 180,000 to 270,000 euros a year.

The highest average remuneration in the C-level is in Hesse with 322,324 euros, followed by North Rhine-Westphalia with 317,672 euros. Companies far from the digital hubs must create other incentives in addition to remuneration. Home office or remote work and flexible working hours are indispensable according to Ipotentials.

The composition of salaries is becoming more complex and consists of a fixed portion and an average of 30 percent variable components such as bonuses, stock options and virtual stock options such as ESOP (Employee Stock Option Plan) and VSOP (Virtual Stock Option Plan). However, the variable components of remuneration, such as employee participation, are lower in times of crisis – this was particularly evident between 2021 and 2022.

If an individual has a direct influence on whether the company’s goals are met, then there is a higher likelihood that they will be paid heavily on the basis of success. Fixed-term remuneration agreements of three to five years are not uncommon. Variable shares of around 50 percent are common, especially for CEOs, CFOs and commercial executives. 64 percent of managers in the first management level have company shares, 27 percent do so in the second management level.

Overall, however, the understanding of work and the individual values ​​of people at C-level are also changing – accordingly, salary components are becoming more and more diverse. While in the past executives could be very well incentivized to work for the company with a performance-related salary, executives today tend to have more individual goals.

At the top management level, there are only 16 percent women. At the VP and Director level it is still 29 percent – in 2021 it was only 23 percent. While that could be a sign that diversity efforts are picking up steam, Ipotentials is observing an impact of the leaky pipeline effect. This states that the proportion of women decreases the higher the career level – despite the fact that the educational qualifications of girls and women are increasing, there are plans for the advancement of women and equal opportunities policies or mentoring programs are offered. The effect points to an ongoing structural inequality between men and women.

The statistical wage gap at C-Level is six percent, which is less than the general average in Germany of 18 percent. Ipotentials attributes this to the high competition for the best executives – there is little leeway in salary planning.

Because money is not everything – these alternatives are available for a salary increase: