JPMorgan Chase & Co, PepsiCo Inc, Cardinal Health Inc, Deere & Co
and The United Services Automobile Association (USAA) are among the
Fortune 500 companies seeking chief information security officers
(CISOs) and other security personnel to shore up their cyber
defenses, according to people with knowledge of the matter.
While a CISO typically reports to a company's chief information
officer (CIO), some of the hiring discussions now involve giving
them a direct line to the chief executive and the board, consultants
and executives said.
After high-profile data breaches such as last year's attack on U.S.
retailer Target Corp, there is now an expectation that CISOs
understand not just technology but also a company's business and
"The trend that we are seeing is that organizations are elevating
the position of the CISO to be a peer of the CIO and having equal
voice associated with resource priorities and risk decisions," said
Barry Hensley, executive director at Dell SecureWorks' Counter
With many companies looking for security executives with military or
defense backgrounds, people with the right expertise can command
increasingly higher salaries.
Large corporations have recently hired CISOs for between $500,000
and $700,000 a year, according to Matt Comyns, global co-head of the
cybersecurity practice at search firm Russell Reynolds Associates.
Compensation for CISOs at some technology companies with generous
equity grants have reached as high as $2 million, he said.
In comparison, CISOs who have been with a company for five or more
years are on $200,000 to $300,000 per year, Comyns said.
Security experts have often criticized corporate America for being
too complacent about cyber risks and for not doing enough to protect
their computer networks from hackers.
A recent PwC survey found the vast majority of cybersecurity
programs fell far short of guidelines drafted by the Commerce
Department's National Institute of Standards and Technology (NIST).
Only 28 percent of more than 500 executives surveyed said their
company had a CISO or Chief Security Officer.
But high-profile data breaches, such as the one at Target, have
injected a new sense of urgency, executives said. Target ousted its
CEO, Gregg Steinhafel, earlier this month, and its chief information
officer, Beth Jacobs, resigned in February. The retailer is now
searching for a CISO, a newly created role.
"This is ringing bells at the C-suite," Charlie Croom, vice
president of cybersecurity solutions at U.S. defense contractor
Lockheed Martin Corp told the Reuters Cybersecurity Summit.
Recruiters and executives said companies are increasing both the
size and budget of their security teams. By the end of 2014,
JPMorgan's annual cybersecurity budget will rise to $250 million
from $200 million in 2012, CEO Jamie Dimon said in April. And the
largest U.S. bank will have about 1,000 people focused on
cybersecurity, compared with 600 people two years ago, he said.
A JPMorgan spokesman said the bank will continue to invest and
expand its security team, but declined to confirm if the firm was
looking for a CISO.
Cardinal Health CIO Patty Morrison said the healthcare services
company was looking to hire a vice president of security to bring in
"new talent and new ideas." USAA Chief Security Officer Gary McAlum
confirmed the diversified financial services group was looking for a
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Deere representatives were not available for comment, while a
spokesman for PepsiCo declined to comment. The soft drink and snack
maker lost its CISO, Zulfi Ahmed, to MetLife Inc earlier this year.
CHANGING FACE OF BOARDS
As companies look for CISOs, many boards are seeking directors with
technology know-how so that they can better understand cyber risks.
Matt Aiello, co-head of the cyber practice at Heidrick & Struggles,
said he is seeing "unprecedented" demand for CIOs to serve on
"Boards don't feel they have the right expertise to draw upon. It is
not that they don't understand it is a risk; they don't want to
blunder uninformed into it," said David DiBari, managing partner at
the law firm Clifford Chance in Washington.
Retired Accenture CIO Frank Modruson, former Department of Defense
CIO Teresa Takai, Dell SecureWorks chief Mike Cote and AT&T Inc CISO
Ed Amoroso have all been approached to serve as potential directors,
according to people with knowledge of the situation.
Takai said she is "looking at a couple of things," including with a
security technology company. Cote, through a Dell spokeswoman,
confirmed he has been approached by several companies about serving
on their boards. An AT&T spokesman declined to comment on behalf of
Amoroso. Modruson was not available for comment.
Pamela Craig, who serves on the boards of Akamai Technologies Inc,
Wal-Mart Stores Inc and software maker VMWare Inc, expects demand
for CIOs to serve on public boards to increase. "You need people who
have direct first-hand experience in the boardroom," she said.
Some boards are also considering moving responsibility for network
security to risk committees from audit committees, as cybersecurity
is increasingly viewed as a business risk more than a compliance
issue, according to Mary Galligan, director of Cyber Risk Services
at Deloitte & Touche LLP.
RSA Security Senior Vice President Amit Yoran said boards are
looking for experts who can help them build security into products
in development, rather than bolting it on at the last minute.
"CISOs are being brought to the business table more often," Yoran
said. "This is a realization that in many cases a business's
survival relies on the security of the technology."
(Reporting by Nadia Damouni in New York; Additional reporting by Jim
Finkle in Boston; Editing by Paritosh Bansal and Tiffany Wu)
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