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Does a gender pay gap exist on executive boards? An empirical multilevel analysis of executive board compensation in German listed companies

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  • Franziska Handschumacher-Knors

    (University Hamburg)

Abstract

Using a three-stage multilevel model, this paper investigates whether the compensation of female and male members of top management teams differs systematically. For this, the payment and the determinants of compensation of approximately 600 executive board members of German DAX, MDAX, and SDAX companies in the years 2016–2019 were analysed. The differences in remuneration are theoretically founded at the company level by agency theory and at the individual level by human capital theory. The empirical results show that women receive lower compensation than men on average throughout the period under review. However, these differences in pay are especially attributable to the fact that women serve on average for a shorter period on the executive board and rarely hold the CEO position. There is also evidence that executive compensation depends directly on individual attributes (length of service on and position in the board) and company-specific characteristics (firm size and performance) that differ systematically between men and women, but gender determines compensation only indirectly through these factors. The study also confirms that women are still underrepresented on executive boards. With these results, this paper contributes to corporate governance research in the context of the dualistic board system and encourages the discussion about women in leadership positions.

Suggested Citation

  • Franziska Handschumacher-Knors, 2023. "Does a gender pay gap exist on executive boards? An empirical multilevel analysis of executive board compensation in German listed companies," Journal of Business Economics, Springer, vol. 93(3), pages 325-357, April.
    • Handle: RePEc:spr:jbecon:v:93:y:2023:i:3:d:10.1007_s11573-022-01107-7
    DOI: 10.1007/s11573-022-01107-7
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Gender pay gap; Gender diversity; Board; Board compensation; Dualistic board system;
    All these keywords.

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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