Talent Recruitment
Interim CEOs: Examining salary & tenure
Find out how to determine an interim CEOs salary and how these experienced professionals can keep your business on track.
If you have a vacancy at the top of your organization – perhaps in the C-suite or even the CEO role – you know how urgent it is to get someone in the role. And with the search for a permanent leader taking six months or more, appointing an interim executive to manage the business in the short term means you won’t be without a leader while you wait.
In business, every second counts. Why risk losing momentum, when an interim CEO can quickly step in and keep the business moving forward during a time of transition?
Interim leaders (such as interim CEOs, CFOs, GMs and MDs) are high-level talent that can quickly step in to fill the role on a temporary basis and help solve a company’s immediate challenges. They work to create stability, provide leadership, manage the business and even drive a turnaround plan, depending on the unique situation of the company. So, what are the next steps to take in order to fill an interim CEO role? What does an interim CEO compensation package look like?
Here, we’ll look at some key aspects of working with an interim executive, including how long an interim CEO placement can be and how to calculate interim CEO salaries.
The length of an interim CEO placement
The role of the interim CEO (or other member of the C-suite) is to be the trusted pair of hands that’s able to manage the business for the time being. They provide direction and stability until a permanent leader can be found, vetted, appointed and onboarded.
Interim leaders generally only stay for a short time: a typical assignment is around six to nine months. But they can still have a huge impact. Interims focus on taking action as quickly as possible—a tactical ‘get in, get out’ mentality which is highly effective. They have been appointed to perform a specific task or solve a particular problem, and that’s what they expect to do. They roll up their sleeves from day one and work to quickly add value to the business. These leaders have the experience and knowledge that the role requires, so it won’t be new territory for them.
When they exit they’ll leave behind a well-functioning team and a stable business, which is great news for when their permanent replacement steps up.
Interim CEO compensation
Unsurprisingly, not just anyone can take on the challenge of being an interim CEO or executive. It requires a specific mindset, an impressive track record and a particular set of skills—and an interim CEO’s salary will reflect that.
Executives who work as interims are veterans in leadership, with nothing to prove. They are already professionally and financially secure – the interim role is a challenge where they know they can make a difference. They enjoy what they do, and they’re good at it. These dynamic individuals are prepared to drop everything to start work at a moment’s notice, and they can work anywhere.
Importantly, they’re overqualified; if your business a $500m turnover, typically someone will be placed that has already led a $1bn business. This is not a situation where you want someone to learn on the job.
In terms of compensation, interim leaders normally work on an hourly or a day rate, but they can also be engaged for a fixed-price piece of consultancy. This rate will be based on the size of the company, the competencies you need and the shape of the assignment: there’s no industry standard rate. Interim leaders’ salaries are paid to a level commensurate with their extensive industry experience and track record.
Interims don’t join your payroll. You agree on an hourly or daily rate that includes the interim’s fee as well as all administrative costs, making billing straightforward and removing the burdens associated with traditional onboarding. You pay for the time utilized, giving you flexibility.
For most businesses faced with a leadership gap at the very top, the cost of the interim CEO compensation package is not what’s causing them to lose sleep. Their number one concern is getting someone in post as quickly as possible, in order to maintain stability in the business and drive growth.
Setting your interim CEO up for success
In today’s fast-moving business environment, time is always of the essence. Interims have to hit the ground running if they are to complete their assignment in just a few months. Here are some ways you can help maximize impact from day one:
- Help them align with the board and other stakeholders: It’s imperative that the interim leader and the board are on the same page, so that the interim can understand what’s expected of them while they’re in the role. This helps them execute with decisiveness and confidence.
- Be honest and transparent: Give your interim a clear picture of the challenges your business is facing — this is no time to conceal where you’re failing. Be open about what’s going on and what you’ve tried before—this is key information that can help them succeed in the role.
- Remove obstacles: Your interim will know where they are expected to get to and will be plotting their path towards it. You can help by smoothing the way wherever possible. When they tell you what they need to get the job done, it’s time to listen.
- Help them embed into the culture: Interim CEOs need a good understanding of the situation they’re coming into. Give them the opportunity to speak to customers, suppliers, employees, board members and any other kind of stakeholder. This input might prove invaluable in getting them up to speed and helping them find solutions.
- Have a handover strategy ready: Interim CEOs rarely have the expectation of staying on permanently. They have been brought in to ensure the business is in good shape for the next incumbent, and once that person is found, they’ll prepare to hand over the reins. Of course, a major transition of leadership needs a strategy – it may be that the interim stays on in some kind of advisory capacity, for example, but a prolonged overlap is unlikely.
Hire your interim CEO today
In today’s fast-paced business environment, you can’t afford to be without a leader for long. At Korn Ferry, we understand the urgency of the mission and have designed our practice around that. We work fast, so you can keep your business on the right track during a time of instability.
Your interim will only have a short window of time—just 6-9 months on average—to make impact and get the job done. Fortunately, our unparalleled expertise means we can help you get the results you want, right out of the gate.
As a world-renowned organizational consulting firm, we have a deeper understanding of the challenges your business is facing – it’s not just about quickly filling the current vacancy and moving on. Using our strategic and advisory expertise, we can work with you to solve the whole problem, constructing the interim assignment in a way that adds maximum value and ensures real ROI.
And we’ll only bring you the best of the best. We have access to a huge global network of leadership talent, people of the highest caliber, with whom we have worked throughout their professional and executive careers. We’re proud of our global reach at this level of the market, and we work hard to maintain it.
This article is an excerpt from Interim CEOs: Big players, fast. Download the complete eBook to find out everything you need to know about interim leadership.
Want to find out more about our interim leadership practice? Get in touch with our team.
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