At S&P 500 companies, female C-suite executives earned an average $0.75 for every $1 their male counterparts earned, which is the lowest since 2012 and down from $0.88 in 2018, according to a survey by Morningstar released this week. (C-suite executives are those holding named executive officer roles, or CEO, CFO, and the next three highest-paying roles.) Although there were slightly more women in the top jobs in 2020—14% vs. 8% in 2012—and their cash salaries were about on par with men, their share-based compensation, made up of stock and stock options, fell short. Men’s share-based pay increase outpaced women’s by nearly 30 percentage points, on average. At the current rate, women aren’t expected to reach pay parity with their male counterparts until at least 2060. Even though this study involved top executives, researchers point out that it has far-reaching implications for women down the corporate ladder. It is indicative of the institutional barriers women face from the start of their careers all the way to the top, they said. “What it is is an indicator of a systemic problem,” said Jacqueline Twillie, president of ZeroGap.co, a training and development firm for women who work in male-dominated industries. She said she remembered when she read that Citigroup CEO Jane Fraser last year earned $22.5 million, around $10 million less than her male counterparts who run large banks on Wall Street, and wondered, “If this happens at the highest level at a very visible company, how bad is it when we look down the line?” Some researchers say the wage gap persists because corporate cultures tend to favor men. Discretionary pay, including share-based compensation, is often influenced by personal connections and insider relationships, which may disproportionately benefit men, wrote researchers in a National Bureau of Economic Research paper on gender pay gaps among top executives in December 2020. Twillie also said that women, while they may be excellent negotiators, may not be using teams—like an employment attorney and financial planner—the way men do in negotiating their employment contracts. “So they’re working with a blind spot,” she said. To close the gender pay gap, transparency is the first step, said Jackie Cook, director of stewardship, product strategy, and development at Morningstar’s Sustainalytics team. Shareholders of large companies like Apple are already demanding transparency in compensation plans, and New York City will require companies to publish salary information in job listings, effective May 15. “There is no logical reason why a woman doing a job that is equivalent to any man should not receive the same in stock or any other compensation,” said Richard D. Quinn, a retired corporate officer and compensation and benefits executive, in an email. Have a question, comment, or story to share? You can reach Medora at medoralee@thebalance.com.
