Written By
Marissa Peretz

06.28.17

Equal Pay Gap is Reversed in the C Suite

Equal Pay Gap is Reversed in the C Suite
Although we began the year with the knowledge that many female employees still earn less than their male counterparts, top leadership compensation is a bright spot in the equal pay discussion that is worth highlighting. The Wall Street Journal recently reported that women who hold the highest office of the largest U.S. companies earned more than their male counterparts in six of the last seven years.

What factors create opportunities for equal pay?

One contributing factor in the Wall Street Journal’s analysis is that “several female CEOs are pursuing tough turnarounds.” Boards of directors typically compensate these leaders to account for the monumental risk involved. Good leadership takes a lot of time and effort in the best of times, but navigating a company through tumultuous times often requires a morale shift, a pivot, and re-establishment of trust for leadership in the highest offices. All of which require a strong resolve to rise to the challenge.

Compensation for the top seat is also often tied to performance. “S&P 500 businesses now run by women generated a median total shareholder return of 18.4% in 2016, compared with 15.7% for those commanded by men.” One of the highest compensated CEOs in the study was Meg Whitman, whose company Hewlett Packard recently posted a total shareholder return of around 55%.

Leading by example at the top

Even though female CEOs only account for 5% of CEOs at S&P 500 companies, their willingness to tackle tough challenges and their ability to outperform their peers at other companies provides a merit based case study that all hiring managers and leadership can learn from. As we continue the conversation about compensation disparity based on gender, it is important to note that results at the highest level are equally rewarded. Companies who are willing to compensate women for performance and their leadership through business challenges can increase their bottom line success. With women outperforming men in these roles, we may see the percentage female CEOs increase in the near future.