Advancing Women to the Boardroom

Compensation Difference for Female CEOs Add Up

Economists at the Federal Reserve of NY have released preliminary findings from a study on the gender pay gap in executive compensation. Their analysis identified three differences in the structure of compensation packages for male and female executives that continue to put women at a disadvantage – even at the top.

  • Incentive pay made up a smaller percentage of total compensation for women relative to men.
  • Compensation for female executives was less pay-performance sensitive relative to men.
  • Female executives were more likely to suffer the consequences of bad firm performance and less likely to benefit from positive firm performance relative to their male counterparts.

How big were the numbers? The table below shows some of the differences the researchers found in total compensation for men and women based on changes in the value of the organization.

Change in Total Compensation for Men for Women
$1 million increase in firm value $17,150 increase $1,670 increase
1% increase in firm value 44% increase 13% increase
1% decrease in firm value 33% decrease 63% decrease

 

Federal Reserve of NY: Incentive Pay and Gender Compensation Gaps for Top Executives (August 2015)

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