Yes. Compensation at that level should always be performance based. This would force better decision making and increase accoutability for those decisions.
A quality CIO builds a team that performs and should not have to worry about guaranteed compensation packages. Basing compensation on end result ensures the CIO builds the team to deliver a quality product.

Paying on straight commission requires an agreed to definition of who is the customer. For instance, is responsiveness to the CEO the criteria of customer, or is it to the general managers of the different divisions each having slightly different agendas, needs and success criteria?

A much better policy would be to provide a guaranteed salary with customer satisfaction indices related to bonus, similar to sports professional. This would allow for situations where implementation did not occur on time, due perhaps to vendor performance, but did get the minimum system available to help the business reap some gains.

Since the key factor for hiring a CIO relates to performance and the company generally seeks to hire the best available CIO for its compensation package, anything that will stimulate performance and stabilize the position is good for the company and for the people working for the CIO.

One final consideration is the size of the company which directly determines the speed of changes to the system and the infrastructure. In a large company the CIO needs time to implement successful redirection of customer relationships. In a small company this is much easier. So whatever compensation package is chosen it must recognize the realities of the environment.

It's most effective when everyone in a company, including all members of the top level executive team, have customer-satisfaction and customer-retention objectives as part of their overall compensation packages.

Otherwise there's always a temptation for those that aren't compensated in this way to reduce the funding needed for the training, databases and metrics required to build and sustain a customer-focused organization.

This type of compensation has become increasingly important as hardware, software and services become commodities, and brand equity becomes even more influenced by every point of contact that various types of internal and external customers have with a company, including their contacts via outsourced call centers.

The specific metrics and amounts of compensation require careful thought and planning, planned communication throughout the organization, and should include "best practices" training and the opportunities to build on the expertise of those within an organization that can do this well.

This is an area where online collaboration, training and guided "social networking" solutions can have a big payoff for the long term viability of most companies.

I think it is a bit of a reach for many reasons. I myself just led the implementation of a new ERP system at a mid-sized corporation. While many of the problems I encountered in this endeavor were specific to our organization they were not all that way. I personally feel there is a lot of inept management out there and not just in IT.

We had a solution that worked for 90% of the tasks and did development work for the rest. I was very open-minded and worked with each area of the company. I ended up developing the processes for every area except the financial department. Most managers couldn't tell me what their people did in specific terms. I had to work with the end users directly to figure out what they needed. I will be the first to admit that I did not hit the mark on all things. There was only one of me and a thin IT team that was stuck with this job. The other departments were allowed to just blow it off until it was go time.

When the dust settled I did have working models in place in every department and every major process. To say the least the department managers felt the need to put their own fingers in the processes once we were live without having an understanding of the effects of the changes they implemented at all. In summary, we had and continue to have a disaster and it is very unfortunate. The CUSTOMER (i.e. the rest of the business) took a perfectly good system and destroyed it. How on earth can a CIO be held to blame for that? It is 50% politics and 50% incompetence on the side the remainder of management. It is not like there was a poor relationship between myself and the other managers. They were simply "too busy" and the CEO let them slide.

This has had and continues to have a major impact on operations. To this date, I have managers making arbitrary changes in their departments that have far reaching impact. They do it at will and without regard for the business as a whole. I have seen this as an issue all too often. The customer may be the business, but the business doesn't do their part in creating solutions. This whole concept "it is IT's fault" is BS. People purchase applications on their own and without involving IT and then expect IT to make them work. These are people who shouldn't be purchasing their own clothes not to mention major purchases of software...

IT can not solve every problem and their are plenty of incompetent CIOs--far too many. But to come out with such a total loaded statement just for IT is unbelievably narrow. As Don pointed out there are many issues with it. I think he is mistaken on the size and the speed of change though. Smaller companies can be much more slow then large ones.

Just a final thought--why don't we talk about this in terms of management period? The complexity current IT solutions bring is mind boggling. That is not IT's fault. I blame it more on the customer at large for allowing it. That said, I can give you the best hammer in the world and if you insist on using a tiny screw driver to pound the nail, how can that be my fault? I do believe there should be some serious grading of job performance and have your income mostly based on that....

Perhaps the appropriate question is: Given the data-intensive nature of today's digitally distributed enterprise-enabled results--only collaborative workspace-based corporation, why aren't the CIO and the CEO the same person? How's that for flattening the organization based on function?