Closing The Gap

Research suggests female CEOs outearn their male peers—but it's not that simple

General Motors Chief Executive Officer Mary Barra
Getty Images

Research suggests that in the most rarefied circles, women might actually earn more than men.

In 2017, the annual Equilar/Associated Press CEO Pay Study found that the median compensation for female CEOs was $13,093,444, and the average was $14,488,643. Meanwhile, male CEOs had a median compensation of $11,376,284 and an average of $12,648,010.

The study included S&P 500 companies that filed a proxy statement for the fiscal year 2016 and looked at median and average compensation of CEOs who had served in their same position for two consecutive, full fiscal years.

But of the 346 total CEOs included in the study, only 21 were female, compared to 325 males — it can be hard to draw meaningful conclusions from such a small sample size. As Fortune's Kristen Bellstrom writes, data like this can also give the false sense that "America's biggest corner offices are a haven for gender equity — which does not appear to be the case."

And when comparing the top paid female on the list with the top male, the difference is hard to ignore. The highest paid CEO on Equilar's list was Thomas Rutledge of Charter Communications, who earned total compensation of nearly $99 million. Meanwhile, the highest paid female CEO included in Equilar's study was Virginia Rometty of IBM, with compensation just a little over $32 million.

Indra Nooyi, CEO of PepsiCo, one of the companies in the CEO Action for Diversity & Inclusion alliance
Spencer Platt | Getty Images

Other top-earning female CEOs included in the study were then-CEO of Yahoo Marissa Mayer with compensation of over $27 million and Indra Nooyi of PepsiCo, with just over $25 million in compensation. Those numbers may seem enormous but they're a drop in the bucket when you consider that the second-ranked male CEO, Leslie Moonves of CBS, had total compensation of over $68 million, and Robert Iger of Walt Disney took in nearly $41 million.

Among companies in general — not those just limited to the behemoths in the S&P 500 — the CEO wage gap actually favors men. The Institute for Women's Policy Research (IWPR) looked at recent earnings data from the Bureau of Labor Statistics, and found that for full-time chief executives, women's earnings were 79.5 percent of men's. Women CEOs' median weekly earnings were $1,920, compared to men's median weekly earnings of $2,415.

"When you look at all CEOs, all people who describe themselves as CEOs, there actually is a wage gap," says Ariane Hegewisch, the program director for employment and earnings at the IWPR.

Hegewisch argues that the heightened attention on companies like the S&P 500-level firms that make up Equilar's study may actually contribute to that favorable pay gap, while the BLS data includes private and smaller companies that might not be required to share their pay information.

In other words, companies that know they'll be required to disclose their compensation data may pay women more fairly.

"Transparency helps women," Hegewisch says. "And it's also likely that the women who made it through the barriers we know are there for women are really, exceptionally great."

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Rising to the top of the ranks as a woman is no easy feat, as the shockingly small number of women CEOs in the S&P 500 makes clear. And once you're there, getting paid your fair share also presents a unique set of challenges, says Andrea Johnson, senior counsel at the National Women's Law Center.

"When you're talking about these higher level, professional employees," Johnson says, "the way pay is set for them, there's a lot of opportunities for bias to enter into that. There's performance evaluations and how women are perceived in their ability to do their job versus men, there's less of a standardized process for determining that CEO pay. So you start to see more bias come in, because of the discretion that's allowed in setting the pay."

Further, Johnson points out, "the wage gap has been largely stagnant for the last decade."

"Greater pay transparency is a thing we need to focus on to close these gaps, and I think that's true for all workers," she says. "I think it's helpful to make clear what CEOs across companies are being paid and where women fall and where men fall so we can really think about what are the justifications for these differences."

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