How much do you need to pay a chief operating officer to join your company? The salary of a COO in 2021 depends on a number of business factors from the size of your company and where it’s located to whether you run a private or public firm. It also depends on the overall compensation bonuses and benefits you’re willing to offer in addition to the salary.
COO compensation should also factor in what phase your business is in and what you’re trying to accomplish. For instance, if you’re planning to roll out a new product, you may want a COO with significant production and marketing experience. If you’re just looking for someone to succeed the CEO, on the other hand, you can afford to take on someone with less experience. It’s important to consider what a successful COO looks like for your business and then factor that into the salary offer.
Another smart hiring move is to be aware of average salaries and compensation packages. Below is an overview of COO salaries being offered in 2021 for private and public companies. Keeping these numbers in mind will help your business stay competitive in these trying business times.
According to Salary.com, the median salary for a COO in the U.S. is $446,150. Bonuses for the position average an additional $166,802 and benefits are another $137,793. This brings the average compensation package for a public company COO to $750,745. Of course, when looking at this number it’s important to factor in your location, candidate experience, education level, and more.
By adjusting a few factors such as location and college degree, you can either increase the overall compensation amount or reduce it. For example, the median salary of a COO based in San Francisco, California is $557,687 whereas the median salary of a COO based in Raleigh, North Carolina is only $431,739. The rate is different because the cost of living is much higher in San Francisco than in Raleigh, so your COO needs to be compensated accordingly.
Education and experience are also significant factors in total salary and compensation. For example, if your company can’t afford a $400,000 salary, you should look at candidates with a bachelor’s degree and fewer years of experience. The cost difference between a bachelor’s and a master’s degree is roughly $8,000, and the gap between one year of experience versus five is another $10,000 to $12,000.
Private companies are significantly smaller than public companies, so their compensation range is a lot more modest compared to public salaries. According to the Chief Executive Group, the average compensation package of a COO in a private company is $223,500. This includes the base salary as well as bonuses. If the bonus makes up 22 percent of the compensation package, then the average base salary for a private company COO would be $174,330. Again, the final salary really depends on the overall size of the private company as well as the location and candidate qualifications.
Executive leadership is a serious role within your business and to attract the best talent you need to offer competitive compensation. Being aware of the average salary of a COO in a private or public company gives you a reference point when calculating what to pay a COO for your business. Remember, the COO is often considered the right-hand man of the CEO, so don’t undervalue this position as you work on the compensation package.
Cowen Partners is a national executive search firm and has put together the Top 20 COO interview questions to help you select a qualified COO. If you need help finding qualified Chief Operating Officer candidates, please contact us.
Everyone knows the major role a CEO plays in a company, but fewer people understand the significance of a COO. A chief operating officer is typically in charge of the daily operations of a company, and the duties required of this role can vary widely between businesses. The COO role is often seen as the right hand of the CEO, and the position usually exists to alleviate everyday management tasks from the CEO’s shoulders. With the general operation details designated to a COO, the CEO has more time to dedicate to big-picture aspects of the business, like long-term strategy and efficiency solutions.
The COO can be a vital role to any company but what exactly makes a great COO? The various roles played by a COO are so numerous and ever changing that companies need to find a true chameleon to fill the position. If you’re hiring for a COO, you’ll likely be looking for a candidate with a unique set of skills that set this leader apart from the rest of the group. Below are a set of attributes you can find in an excellent COO and ones you should look for when interviewing for the role in your own company.
The role of a COO is often changing and evolving as the business ebbs and flows, which is why a top COO needs to know how to adapt to various situations and strategies. The COO can also play a variety of roles within a company from the executor of business strategy or managing a major organizational change to simply complementing the skills and experience of the CEO. Whatever role the COO is initially brought in to play in your company, the ability to adapt to new responsibilities and situations will be a major benefit.
A COO needs to handle the day-to-day operations of a business, but they also need to understand how those small details impact the larger business strategy. Attention to detail is one characteristic that will help a COO keep everyone on-task and inline with company deadlines. People who are less detail-oriented might understand the big picture of your company but will have a harder time keeping all of the plates spinning as the finer details of running a business are lost.
A great COO understands running a business is a team effort. In most cases, the COO is not only working closely with the CEO but is also managing heads of various departments and regularly checking in with various teams to ensure production is running smoothly. A true team player COO will smoothly work alongside the company CEO, complementing his/her work style and skillset. Further, a great COO will understand the value of credit and praise to other managers, supervisors, and teams within the company. A COO who can acknowledge the hard work others put into the company will be able to build employee loyalty and increase employee satisfaction.
Every company needs at least one person in the c-suite to be a data-driven leader. It’s too easy for people to get carried away by “instinct” or a “gut feeling.” For a business to be really successful, decisions need to be based on data-driven information proving which choice is the best option. A COO with a data-driven mindset is the voice of reason when board members are trying to push an initiative based on business politics or mere hunches. By requesting data-backed evidence for a proposal, a great COO can redirect a company’s investments toward more worth-while projects.
A COO role isn’t for the faint of heart. This position is second in command of the company and will require a strong leader to successfully manage the job. Business deals, strategies, partnerships, and various other aspects of business do not always go smoothly. When the company hits a bump in the road, you need a leader who can navigate the situation with professionalism and start looking for solutions to the problem. A top COO will be able to face difficult situations and quickly recover from any setbacks or failures the company experiences.
Demand for capable COOs is growing as the role of the CEO becomes more and more complex. Companies need someone who can balance out the CEO position by bringing a wider skill set to the table and lightening the responsibility of upper-level management. The value of the position should not be underestimated, and if you’re looking to add a position to the c-suite of your company, a COO role is an excellent option.
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