Why Executive Women Should Work for a Woman

Why Executive Women Should Work for a Woman

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If you are a woman who wants to earn what you are worth, try to work for a high-achieving women.

Male CEOs pay executive women less than men doing similar jobs, according to research recently published in Management Science.

The researchers examined salary data from publicly traded companies between 1996-2011 to see how a CEO’s gender and age affected senior executive pay. Adding more data to evidence of the persistence of the wage gap, they found that high-level women who worked for male CEOS were paid less than their male counterparts, and older CEOs were more likely to pay women less. “Our results suggest that CEO gender and age are economically more important determinants of officer compensation than are firm stock performance, stock volatility or return on assets,” according to the researchers.

The key findings:

  • Male CEOs pay female officers on average $46,500, or 12% of median compensation, less than they do their male subordinates.
  • Male CEOs paid their officers more richly than female CEOs do, an average of $15,210, or 4%, of the median officer total compensation.
  • Women officers were paid less than their male counterparts, and even less than men in lower-level positions.
  • Women also got smaller increases in compensation than men did.
  • Men who work for women CEOs were paid at similar levels to women who worked for women.
  • Older and male CEOs exhibit the greatest propensity to differentiate on the basis of sex.

As most companies remain run by men, the data is discouraging for high-achieving women. And looked at from a broader perspective than the impact on individuals, the wage gap has broader effects that should concern everyone. As numerous studies have shown that women CEOs are more successful than men, and if shareholders were rational, they would demand not only equal pay for women, but for a women to hold the top spot.

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