The issue of adjusting compensation based on employee location has long been a topic of debate, particularly among multinationals entering the U.S. market for the first time. A common misconception is that employees living in secondary markets should earn less than those in primary markets, such as New York. The lower cost of living, in their calculations, justifies lower compensation.
While this logic may hold in most industries, it does not reflect the realities within the power and emerging infrastructure sectors. In these sectors, location-based salary scaling often fails to account for the high demand and limited supply of uniquely qualified executives. Compensation benchmarks from global consulting firms—though widely used—often rely on generalist data sets that lack nuance and relevance to novel infrastructure such has power, transmission and data centers.
These compensation models resemble real estate appraisals, using “comparables” that are anything but equivalent. For example, comparing a Chief Development Officer in power generation to a Head of Project Management in highway or bridge construction ignores the fundamental differences between the roles and intricacies of the industries they assist. Power plants, no matter the technology, require highly specialized knowledge and are significantly more complex. To make complicate matters further, these firms make strong suggestions regarding hiring, thwarting the success of these businesses they aim to serve.
Demand is at the core of monetary rewards and title allocation. The demand for executives with expertise in greenfield development, power markets, high voltage electrical engineering and asset management is exceptionally high. These skills are not only rare but take years to develop.
To illustrate the vast talent gap between companies: we asked a seasoned Vice President of Talent Acquisition whether their team handled transmission internally or used consultants. Her response: “What do you mean by transmission?”
Such examples highlight how critical and scarce deep sector knowledge is—and why compensation should be driven by expertise and demand, not zip codes.
Joe Amara Executive Search represents companies in power generation, transmission, and digital infrastructure, with a focus on C-suite, leadership, and critical hires.
To learn more, please visit us at joeamara.com
