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Gender differences in executive compensation: Variation with board gender composition and time

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  • Elkinawy, Susan
  • Stater, Mark
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    Abstract

    This paper uses EXECUCOMP, COMPUSTAT and Investor's Responsibility Resource Center data to examine gender differences in executive salaries and total compensation from 1996 to 2004. We find that the salaries of female executives are about 5 percent lower than those of male executives, controlling for executive, firm, and board characteristics, and that the gap exists primarily in the lower officer ranks, where women are relatively highly concentrated. The gender difference in salary is larger in firms with more male-dominated boards; perhaps not coincidentally, such firms are also found to have fewer female executives in top managerial positions as well as lower probabilities of having any top female executives at all. The results of Oaxaca wage decompositions suggest that, although the magnitude of the gender difference decreases slightly over the sample period, the share of the gender difference that is due to unobserved factors remains basically steady or even increases. Thus, although women have become better represented in top executive jobs in recent decades, their relative salaries remain below those of men, possibly due in part to governance structures that remain male-dominated.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economics and Business.

    Volume (Year): 63 (2011)
    Issue (Month): 1 (January)
    Pages: 23-45

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    Handle: RePEc:eee:jebusi:v:63:y::i:1:p:23-45

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    Web page: http://www.elsevier.com/locate/jeconbus

    Related research

    Keywords: Executive compensation Gender differences Wage decompositions;

    References

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    1. Blau, Francine D. & Kahn, Lawrence M., 2006. "The U.S. Gender Pay Gap in the 1990s: Slowing Convergence," IZA Discussion Papers 2176, Institute for the Study of Labor (IZA).
    2. Gabrielle Wanzenried, 2008. "How feminine is corporate America? A recent overview," Journal of Economic Inequality, Springer, vol. 6(2), pages 185-209, June.
    3. Francine D. Blau & Lawrence M. Kahn, 2000. "Gender Differences in Pay," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 75-99, Fall.
    4. Nancy Mohan & John Ruggiero, 2007. "Influence of firm performance and gender on CEO compensation," Applied Economics, Taylor & Francis Journals, vol. 39(9), pages 1107-1113.
    5. Marianne Bertrand & Kevin F. Hallock, 2001. "The Gender gap in top corporate jobs," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 55(1), pages 3-21, October.
    6. Benjamin E. Hermalin & Michael S. Weisbach, 2003. "Boards of directors as an endogenously determined institution: a survey of the economic literature," Economic Policy Review, Federal Reserve Bank of New York, issue Apr, pages 7-26.
    7. Brad M. Barber & Terrance Odean, 2001. "Boys Will Be Boys: Gender, Overconfidence, And Common Stock Investment," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 261-292, February.
    8. Oropesa, R S, 1993. " Female Labor Force Participation and Time-Saving Household Technology: A Case Study of the Microwave from 1978 to 1989," Journal of Consumer Research, University of Chicago Press, vol. 19(4), pages 567-79, March.
    9. Fama, Eugene F. & French, Kenneth R., 1997. "Industry costs of equity," Journal of Financial Economics, Elsevier, vol. 43(2), pages 153-193, February.
    10. Bell, Linda A., 2005. "Women-Led Firms and the Gender Gap in Top Executive Jobs," IZA Discussion Papers 1689, Institute for the Study of Labor (IZA).
    11. Becker, Gary S., 1971. "The Economics of Discrimination," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226041162, September.
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    Cited by:
    1. Bugeja, Martin & Matolcsy, Zoltan P. & Spiropoulos, Helen, 2012. "Is there a gender gap in CEO compensation?," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 849-859.
    2. Hirsch, Boris, 2013. "The impact of female managers on the gender pay gap: Evidence from linked employer–employee data for Germany," Economics Letters, Elsevier, vol. 119(3), pages 348-350.

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