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The Evolution of Total Rewards Leadership: Insights from the S&P 500

By Christopher G. Freedman and Adele Gibson
October 2026
| 4 min read

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Key insights

  • Total rewards has evolved into a strategic, enterprise-level leadership role. More than 80% of S&P 500 companies today combine compensation and benefits under a unified function.
  • Most total rewards leaders rose to the position through internal promotion. Nearly one-third hold broader responsibilities spanning HR operations, analytics, technology, shared services and M&A.
  • As the role grows in importance, organizations must start early to build a bench of potential successors. Those that wait until they have a vacancy risk leaving themselves with limited options at the worst moment.

Total rewards has evolved beyond a technical specialty into an increasingly important enterprise leadership role, front and center with CEOs, CFOs and boards. Workforce costs, executive incentives, pay transparency and talent scarcity have accelerated that shift.

New data from Spencer Stuart highlights this changing landscape for total rewards. We recently analyzed the total rewards function at S&P 500 companies, comparing it to a similar study we conducted in 2021 with Fortune 500 companies, and found that the total rewards role is now embedded in more companies. Furthermore, the mandate is broadening, with almost one-third of total rewards leaders carrying responsibilities beyond compensation and benefits, most often in HR operations, shared services, people analytics, HR technology and M&A.

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More companies have a total rewards function. More than 80% of S&P 500 companies have a unified total rewards function combining compensation and benefits, compared with 72% of the Fortune 500 in 2021. While the two indexes differ in composition, the comparison is consistent with a function that is becoming more formalized across large companies.

Tenures in the total rewards seat are short. The average tenure of a total rewards leader is four years, with more than half of sitting leaders (57%) having held their roles for less than three years. Only 7% of the total rewards leaders in our study have held the job for more than 10 years.

Most total rewards leaders are hired from within. Fifty-eight percent (58%) of sitting total rewards leaders were promoted internally, almost identical to what we see for the CHRO role (57%). Nevertheless, external recruitment remains an important source of capability, experience and perspective, as the role continues to grow in complexity.

Adoption varies widely by sector. Nearly all consumer staples companies in the S&P 500 (97%) have a unified total rewards function, compared with 62% in energy. Company size does not appear to explain the spread on its own; differences in workforce composition and compensation structure may play a role.

Total rewards leadership is evenly split by gender, unlike the CHRO role. Women hold just under 50% of total rewards leadership roles in our mapping, compared with 73% of S&P 500 CHRO roles in our most recent C-suite data. Our data does not explain the difference, but it is relevant for organizations considering how the function develops its future leaders and how those leaders move into broader HR roles.

As total rewards becomes more formalized and broader in scope, the question for organizations is whether their pipelines are developing the right leaders to keep pace.

Organizations that treat total rewards succession as a decision to be made only after the previous leader has left leave themselves with the fewest options at the worst moment. It's more critical than ever to start building the bench ahead of the need.

It starts with something small and specific: identifying one or more potential successors, and giving them appropriate exposure to the compensation committee cycle, whether contributing to the pre-read, presenting a discrete agenda item or attending in support at least once a year. Governance exposure is among the hardest capabilities to manufacture at the point of departure and easiest to build in advance. It should be complemented by cross-functional or adjacent assignments and a clear external benchmark of successor readiness at defined intervals, rather than only once a search has begun.

That preparation is what allows an intentional choice when the moment arrives: to promote a well-prepared internal successor, or to go outside for capabilities the organization has not built. Either can be the right answer, but the decision is far better made with time to prepare than under the pressure of an open seat.

Many want broader responsibility within HR and, for some, an eventual path to the CHRO role. In our experience, several experiences are especially valuable in preparing for that next step:

  • Leading compensation committee discussions directly, rather than only supporting the CHRO
  • Taking on responsibility beyond compensation and benefits, such as HR operations, people analytics or HR technology, as nearly one-third of the total rewards leaders in our study already do
  • Playing a leading role in an enterprise transformation, integration or organizational redesign
  • Partnering directly with business leaders on talent, organization and workforce decisions, not only on rewards programs

Technical depth earns credibility in the role, but on its own it rarely prepares a total rewards leader for the CHRO seat. Leaders who make that move typically have broader experience across HR and direct working relationships with the board, the CEO and business leaders. Organizations benefit as well, because the same exposure that develops a stronger total rewards successor also builds the pipeline for future HR leadership.

AI is already changing how organizations define work, value skills, price scarce talent and govern increasingly data-driven pay decisions. AI is unlikely, however, to replace the judgment a total rewards leader brings, and it may in fact raise the bar for it. It may also broaden where future leaders come from, with more drawn from analytics, finance or technology alongside compensation.

For now, the data makes clear that the best-positioned organizations are those building the next generation of total rewards leadership before they need it.

The authors wish to thank Adrian Ayala-Perez for his valuable contributions to this report.

About our research

Spencer Stuart reviewed total rewards leadership and how those roles are structured and filled by S&P 500 companies in 2026. We compared the data to similar research conducted in 2021 based on the Fortune 500. While the two lists overlap substantially, they are not identical, and any changes should be seen as directional rather than like-for-like. Tenure figures reflect time in the role among sitting leaders at the time of our analysis, not completed tenure in role. Data on CHROs comes from Spencer Stuart’s S&P 500 C-Suite Snapshot from 2025.

 

 

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