Women do best in women-led companies

2005

A new study has found that women executives in the U.S. working in women-led firms earn between 15 and 20 per cent more in total compensation than women working in other firms.

The study, by Haverford College Economics Professor Linda Bell, reveals that having a woman at the helm of a company is instrumental to the success of other executive women in quantifiable and significant ways.

But overall, it emerged that top women executives in the U.S. are still paid between eight and 25 per cent less than male executives.

Women executives do better - in relative compensation and numbers - in firms with a female CEO or Chair, especially if the female CEO is a member of the Board.

Women executives also have relatively better compensation and representation among top management in firms with more female Board members.

"My research shows very strong empirical evidence that women leaders are associated with positive outcomes for women executives in substantive and important ways," said Professor Bell.

"It seems a logical conclusion to infer that women leaders help the women below them. If equity for high-skilled and performing women is a policy goal, then the one obvious instrument is affirmative action at the very top of the corporate hierarchy."

Professor Bell's study merges the Standard & Poor's ExecuComp data for the years 1992-2003 with an independent data set from the Institutional Investor Research Center (IIRC) on Corporate Directors.

Firms in the ExecuComp data constitute more than 80 per cent of the total market capitalization of U.S. public companies.