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Gender Pay Gap for Executives Grew During Pandemic

Widening pay disparity for corporate leaders reversed years of improvement

A woman sitting at a desk with a laptop in front of her.

The pay gap between male and female executives at U.S. companies expanded during the pandemic after years of improvement, according to a new analysis by financial research firm Morningstar.

In 2020, the first year of the pandemic and the most recent year for which pay-disclosure data is available for publicly traded companies, the gender pay gap in the C-suite became wider, "a reversal of the narrowing that occurred between 2015 and 2019," wrote Jackie Cook, director of stewardship, product strategy and development at Morningstar. "Indeed, female C-suite pay as a percentage of pay earned by their male counterparts fell to a record low for the nine-year period since 2012," she noted. "While the number of women at the top of the corporate ladder has inched up, women will have to wait until 2060 to reach representation parity at the present rate of progress."

The data used in the analysis was sourced from annual proxy statements filed by S&P 500 companies, which represent the largest publicly traded U.S. companies. Public companies are required to annually disclose the pay of their chief executive officers, chief financial officers and the next three highest-paid executive officers.

SHRM Online has collected the following articles on the pay gap between men and women, at the executive level and throughout organizations. 

Female Executive Pay Gap Widest Since 2012

Overall, C-suite pay at S&P companies rose by 24 percent from 2012 to 2020. Men have taken home most of those gains, seeing a 27 percent increase versus a 10 percent jump for women.

In 2020, women in the C-suite earned 75 percent of what their male counterparts took home, Morningstar found, down from 88 percent—a high point—in 2018.

There were slightly more women in the highest-paying jobs at public companies than in years prior, and their base pay salaries were about on par with men in similar roles. However, the bulk of executive pay comes from stock-related awards, and here men out-earned women by 30 percentage points.

(Bloomberg via The Seattle Times)

Pay Inequity Begins at the Start of Careers

Research by the National Association of Colleges and Employers (NACE) reveals that the gender pay gap begins as graduates exit college for the world of work, at the start of their careers. The data shows that women with newly minted bachelor's degrees earn an average of $52,266, compared with $64,022 earned by men.

Academic majors account for some, but not all, of the difference—and there is some evidence that gender bias may account for why some majors have higher salaries. For example, science, technology, engineering and math (STEM) majors generally account for the highest starting salaries, with one exception: biological and biomedical sciences. Biological and biomedical sciences is the one STEM discipline where women account for a larger percentage of those earning a bachelor's degree than men. It is also the lowest-paying of the STEM disciplines, with an average starting salary of $39,314, compared with the average of $66,985 for the other STEM disciplines.


Transparency Shrinks Gender Pay Gap

The pay gap between men and women improves when employers adopt transparent pay practices, research by compensation data and software firm PayScale shows. The multiyear analysis found that the gender pay gap persists throughout organizations, up to the director and executive levels.

Within organizations, transparent pay discussions appear to have the largest impact for individual contributors, supervisors and managers. And while higher up on company org charts, female directors and executives still faced discriminatory pay penalties for their gender, the gender pay gap is diminished somewhat with transparent pay practices here, as well.

(SHRM Online

Fewer Women Advance to CEO Positions

Women account for just over half of the U.S. population and hold about 52 percent of all management-level jobs, but American women don't keep pace with men when it comes to top leadership roles. At the CEO level, men outnumber women by approximately 17-to-1.

As male versus female CEO statistics show, it's the profit-and-loss roles—such as leading a brand, unit or division—that set executives on track to becoming a CEO. Women who advance into the C-suite, however, typically take on roles such as head of HR, legal or administration; although all of these functions are extremely important, the line of work they focus on doesn't directly involve profit-generating responsibilities, which rarely makes them a path to running a company.


Visit SHRM's resource hub page on pay equity


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