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The Gender Pay Gap in the CEOs' Labor Market

Author

Listed:
  • Tani, Massimiliano

    (University of New South Wales)

  • Valentine, Andrew

    (UNSW Sydney)

  • Sharpe, Kieran

Abstract

We study the gender pay gap in the labor market for CEOs by analysing 1,174 outsider CEO successions over the past three decades across 18 countries. We find that male and female CEOs receive a similar compensation overall but this masks marked gender differences in the pay structure: namely, women CEOs receive a lower proportion of fixed to total compensation than comparable men. We interpret this outcome as the result of gendered risk preferences, which exacerbate the pay gap when there is bargaining over pay, and contribute a theoretical model of the CEO labor market to formalise this intuition. The model also suggests that a more balanced gender composition in companies' boards can help women close the gap in pay structure—an hypothesis that is empirically supported in our data.

Suggested Citation

  • Tani, Massimiliano & Valentine, Andrew & Sharpe, Kieran, 2022. "The Gender Pay Gap in the CEOs' Labor Market," IZA Discussion Papers 15781, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15781
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    References listed on IDEAS

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    More about this item

    Keywords

    CEO compensation; women CEOs; board diversity; corporate governance;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M59 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Other

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