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FOR IMMEDIATE RELEASE
Profile of a Typical CPO
The Chief Purchasing Officers' employment mobility, compensation and general demographics
are the focus of a new research report posted to the CAPS Research web site
Tempe, AZ, May 17, 2007 –What patterns determine the likelihood of an individual
becoming the Chief Purchasing Officer (CPO) of his or her firm or another firm?
This is a question authors Thomas E. Hendrick, Ph.D. and John Ni, Doctoral Research
Assistant, consider in the study, "Chief Purchasing Officers' Mobility Compensation
Benchmarks and Demographics: A Study of Fortune 500 Firms".
The focus of this research was to track the career, functional experiences and educational
paths current CPOs have taken to become the CPO of their organization and the career
histories of the 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.
The study provides details of a typical CPO in 2006:
The CPO community is predominately male (87%) 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. He has been CPO for 2+ years and reports to one level below the
CEO. He is responsible for an annual spend of $3.5 billion and has 19 years of purchasing
experience. He has been with the current firm for less than 6 years, is CPO of the
entire firm and has a B.S. in business and an MBA. He became CPO when his predecessor
retired or was the first CPO for the firm. He is not likely to be promoted to a
level above CPO before retirement and has seen the value (in 2006) of his stock
option plan and retirement fund fall since 2001 due to variability in the stock
market.
Other significant 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.
- For a substantial number of CPOs, they were the first to hold the title of CPO in
their firm.
- There continues to be a wide variety of factors that make up the goals a CPO must
meet to earn their bonus.
- Generally, CPOs reported they were satisfied with their compensation packages when
compared to their peers in other functions in their firms.
To review the CAPS Research Focus Study, "Chief Purchasing Officers' Mobility Compensation
Benchmarks and Demographics: A Study of Fortune 500 Firms", click on the following
link:
http://www.capsresearch.org/publications/pdfs-protected/hendrick2007.pdf
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CAPS Research is a nonprofit research organization founded in 1986 to provide leading
research to our strategic-minded corporate sponsors and to the public. Our mission
is to work in partnership with a global network of executives and academics for
the discovery and dissemination of strategic supply management knowledge and best
practices. CAPS Research is jointly sponsored by the W. P. Carey School of Business
at Arizona State University, and the Institute for Supply Management™.
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