Female executives earn more than men

Jan 08 2009 by Nic Paton Print This Article

Once they break through the glass ceiling, top-ranking female American managers tend to progress just as fast as their male counterparts and receive even higher compensation packages. The tricky part is breaking through in the first place.

Research by the Tepper School of Business at Pittsburgh's Carnegie Mellon University tracked the career paths and compensation of more than 16,000 executives over a 14-year period.

This found that female executives actually earned about $100,000 more per year than men of the same age, educational background and job experience.

Yet, despite this, the study also found that the number of females in top executive positions remained a fraction of business leadership overall, largely because of the tendency of women to leave the workforce earlier than men.

On average, total compensation for all of the executives – about five per cent of who were female – was about $2.46m, including almost $461,000 in salary and bonus.

The average age was 53 years old, and approximately just under a quarter of the executives studied, irrespective of gender, held an MBA.

However, the women within the sample were, on average, younger and less experienced than males at the executive level and more prevalent at the lower executive levels.

For example, just two per cent of executives at the CEO, president or chairman level were female, while women represented almost six per cent of CFOs or vice-presidents, the survey found.

What this suggested, said Robert A Miller, professor of economics and strategy at the Tepper School and one of the study's co-authors, was a worrying haemorrhage of women as they progressed up the career ladder.

"Women aren't climbing as many rungs on the executive ladder because they are more likely than males to retire earlier or switch careers," he said.

"Although women may still be likely to face gender discrimination through unpleasant work environments or tougher, less rewarding, assignments, our results find that there does appear to be equal pay and equal opportunity for women if they stay in the workforce and get to the executive level," he added.

However, the study also appeared to indicate that job turnover, tenure and education were, overall, better indicators of compensation than gender alone.

In terms of compensation, an executive's history of career turnover and the presence of an MBA tended to have the greatest impact, not whether they happened to be a man or a woman.

MBA graduates earned about $130,000 more per year than executives with only an undergraduate degree, and $230,000 more than those with just a professional certification, the survey found.

The findings are worrying given latest UK research suggesting that the skills women can bring to the workplace are often more what is needed to help firms trade through the current slump.

The poll, by UK consultancy The Aziz Corporation, argued yesterday that, if more women had been in senior positions in finance and big business, there would have been a less macho, more risk-averse attitude to business and so many of the woes of the past year might have been avoided.

And when it comes to encouraging women to stay in work, a study in October by the UK-based Institute of Economic Affairs argued that focusing on gender discrimination and equal pay may in fact be less productive than just getting on and improving the general skills of managers within an organisation.