CEO Pay - Is My Pay Dependent on My Gender?

Abstract

Within the last thirty years, there has been a noticeable increase and diversity in academic literature concerning the topic of executive pay (Skovoroda et al. 2015) ranging from the nature of the pay-performance relationship, to the gender pay gap in CEO appointments and executive pay (Keloharju et al. 2016). Over the last decade, countries such as the U.K have witnessed an increase in executive pay specifically in the largest listed companies (Department for business innovation & Skills 2011). This has not been the same for women, as there has been evidence of gender bias in the appointment of women as non-executive directors and mixed evidence on the issue of discrimination in wages paid to them (Gregory-Smith et al. 2012). This study reviewed the evidence from existing literature on rise of CEO compensation during difficult financial periods, alongside the concept of CEOs being "rewarded for failure” and gender-based pay disparities amongst CEOs. This report will look at different countries (UK, US, Australia, Germany, Russia, Sweden and China) and sectors Tech, Financial, Retail, Food and beverage and public versus private sectors), then compare and contrast the results, draw conclusions and make recommendations. This was achieved using publicly available data (secondary data) to initiate further research and the analysis of the data was done through thematic analysis of secondary data gathered via peer-reviewed academic journals, blogs, reviews, news articles, financial reports and government reports.

The key outcome of the data analysis highlighted that, in all the countries reviewed there appeared to be a rise in CEO pay and disparity between CEO and worker compensation ration and There were issues with CEO gender pay disparities as there was evidence of pay inequalities between male and female CEOs even in times of pay rise and there was no female CEO in the list of top earners. Examining the evidence in detail it appeared that, the retail and the tech sector were the highest paying sector and female CEOS were under –represented when compared to male CEOs. Evidence also suggested that the gender gap declines, as females' representation amongst management and board increases. Like China, the Russian system is different, as salaries of CEOs in the public companies tend to be higher than those in private companies (Blyakher et al., 2014), however Russia is one of the few countries with a high number of female executives in its private companies but they still do earn less than their male counterparts. Overall, men dominated all sectors and enjoyed higher pay as there appeared to be a glass escalator for men and a glass ceiling for women.

These startling findings has led to the recommendations being made at the end of this paper.