Female Ceo Pay


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The Corporate Library’s Female CEO Pay Survey 2009 is based on compensa􀆟on data
from more than 3,300 companies listed on United States exchanges.

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Female Ceo Pay

  1. 1. The leading independent source for corporate governance and executive ® compensation information and analysis.Thank you for purchasing this report published by The Corporate Library. Weappreciate your business. This transaction allows you to print one copy of this reportand maintain the downloaded PDF version on your computer’s hard drive for yourreview.As a for-profit publisher of research we appreciate your adherence to our intellectualproperty rights. Subscription access to our reports or individual report purchases allowfor single-use application of this document by the purchaser. Following are the standard distribution and reproduction restrictions that apply to our copyrighted materials: Limitations: The copyright covering this report does not provide for additional distribution or reproduction of the report in either electronic or hard copy format. Multi-copy Privileges: Enterprise or multi-copy privileges for reports may be purchased. If you are interested in multiple distribution rights please email your request to sales@thecorporatelibrary.com and an Account Manager will contact you.Please visit our online store at www.thecorporatelibrary.com to review other titles whichmay be of interest to you.If you have suggestions for other topics that you would like explored please feel free toemail them to info@thecorporatelibrary.com.Thank you again for your business. The Corporate Library | 56 Northport Drive | Portland, Maine 04103 www.thecorporatelibrary.com
  2. 2. The Corporate Library’s Female CEO Pay Survey 2009By Greg Ruel, Research AssociateOctober 2009$125© 2009 The Corporate Library, LLC. All rights reserved. No part of this publication may bereproduced, republished, altered, posted, transmitted, or distributed without written permissionfrom The Corporate Library, or, in the case of photocopying, under the terms of a license issued byThe Corporate Library. Additional copies of this publication may be purchased from The CorporateLibrary’s online store at www.thecorporatelibrary.com. ®
  3. 3. The Corporate Library’s Female CEO Pay Survey 2009
  4. 4. Execu�ve SummaryThe Corporate Library’s Female CEO Pay Survey 2009 is based on compensa�on datafrom more than 3,300 companies listed on United States exchanges. Excluded from thestudy were companies with CEOs who had not served for the full 12 months of the latestfiscal year because of promo�ons, appointments, or resigna�ons, as well as companieswhich did not report CEO compensa�on in a proxy filing during the period from August2008 through June 2009, reducing this number to 2,704 companies. Compensa�on foronly 78 female CEOs was available for the study compared to 2,625 males, with oneindividual’s gender undeterminable based on a review of proxy statements. This meansthat women make up only about 3 percent of CEOs in the study. The overall number andpercentage of female CEOs in the 2009 study is nearly iden�cal to our study from 2008,when 80 female chief execu�ves comprised slightly less than 3 percent of CEOs in thegroup.In The Corporate Library’s 2009 CEO Pay Survey, released in September 2009, weconcluded that CEO compensa�on had declined for the first �me since we began ourannual series of pay surveys in 2002. This report will compare male and female CEOpay in order to determine differences in overall compensa�on and the various paycomponents of which it is comprised. Addi�onally, we compare a matched sample subsetof CEOs on the job for the whole of the last two years in order to calculate changes inpay.Comparisons between male and female pay can be complicated. In addi�on torepresen�ng only 3 percent of our CEO popula�on, women also tend to be sta�onedat smaller companies. For example, there are 47 female CEOs in the Russell 2000 asopposed to only 22 in the Russell 1000. Similarly, there are 22 female CEOs among S&PSmallCaps in our sample but only 13 in the S&P 500. These figures suggest that womenare more likely to serve as CEO at companies of smaller market capitaliza�on, whereearning poten�al is typically lower. Other factors to consider when comparing male andfemale CEO pay include industry representa�on, tenure, and performance. As discussedthroughout this report, each of these factors can affect the total realized compensa�onsum received by these execu�ves. © 2009 The Corporate Library, LLC 3
  5. 5. Key findings of the survey include: • At the median, female CEOs earned $40,000 more in base salary than male CEOs. • On average, men’s discre�onary bonus amounts were more than 3.5 �mes larger than women’s. • On average, men’s perquisite payments are nearly twice the amount received by women, though the difference is negligible at the median. • On average, female CEOs earned 80 percent of what male CEOs made in annual compensa�on (excluding equity), but just 58 percent of what males earned in realized compensa�on (including value from op�ons exercise and the ves�ng of shares). At the median, females earned 91 percent of male annual compensa�on and 78 percent of male realized compensa�on. • On average, realized compensa�on in 2008 was $4.8 million for men, but $2.8 million for women. At the median, men earned $1.7 million compared to $1.3 million for female CEOs. • Mar�ne A. Rothbla� of United Therapeu�cs Corpora�on is the only female CEO among the top 150 earners of 2008 in total realized compensa�on. • In our matched sample analysis, female realized compensa�on declined by a median of 18.5 percent compared to 6.1 percent for male CEOs, though female annual compensa�on saw a slight increase compared to a slight decrease for males. • On average, total realized compensa�on in the S&P 500 was $13.7 million for men and $7.4 million for women CEOs. • At the median, female CEOs in the S&P 500 out-earned males in terms of annual and realized compensa�on. 2008 median annual compensa�on in the S&P 500 was $3.2 million for women and $2.5 million for men. Total realized compensa�on was $7.6 million at the median for females in the S&P 500 as opposed to about $6.6 million for males. Thus, while very few women (only 13) lead S&P 500 companies, those that do receive above- median compensa�on for that index.4 © 2009 The Corporate Library, LLC
  6. 6. MethodologySource DataCompensa�on data for over 3,300 companies was examined for the purposes of thesurvey, drawn from proxy statements filed in the U.S. between August 2008 and June2009 for CEOs who served a full 12-month term. For the most part, this data reflectscompensa�on received during the 2008 fiscal year, though occasionally, the fiscal yearend may fall in early 2009.Defini�ons of Compensa�onThe Corporate Library primarily uses two measures of compensa�on: total annualcompensa�on (which excludes equity compensa�on) and total realized compensa�on(which includes equity, but measures it by actual market values at the �me of ves�ng orexercise, rather than by accoun�ng es�mates).Total annual compensa�on includes: • base salary • bonus • non-equity incen�ve compensa�on • all other compensa�on (perquisites and benefits)Total realized compensa�on includes: • total annual compensa�on • change in pension and non-qualified deferred compensa�on (NQDC) • value realized on exercise of op�ons • value realized on ves�ng of other equity • any payments from a vested re�rement benefit planBecause of this way of handling equity compensa�on, our total realized compensa�onrepresents compensa�on that has actually been received by the CEO, rather thanany no�onal es�mates, accoun�ng costs, or other uncertain�es. For this reason, TheCorporate Library’s figures will differ from those of many other commentators and paysurvey producers. Our figures also differ from the total summary compensa�on figuresprovided by companies in the proxy statement’s Summary Compensa�on Table, whichrepresents an accoun�ng cost, rather than actual compensa�on received or receivable.While other figures have value for certain purposes, The Corporate Library con�nuesto be more interested in outcomes rather than inputs, real compensa�on rather thanes�mated compensa�on.Table 1 compares the full sample of male and female CEOs on the basis of individual paycomponents and in terms of dollar amounts received for the 2008 fiscal year. Thoughthe female sample is much smaller, there are nonetheless notable differences in the waymale and female CEOs are compensated. The maximum column alone illustrates this,with females earning maximum salaries, bonuses, perquisites and total compensa�on ata frac�on of the amounts earned by males. © 2009 The Corporate Library, LLC 5
  7. 7. Full Sample AnalysisTable 1: 2008 Compensa�on—All CEOs (Source: The Corporate Library) Count Minimum 25th Percen�le Median Mean 75th Percen�le MaximumBase Salary Male 2,625 $426,602 $600,000 $677,478 $875,000 $8,100,000 Female 78 $150,000 $443,390 $640,000 $686,330 $860,217 $1,503,366Bonus Male 2,625 $241,886 $14,316 $76,951,000 Female 78 $66,176 $3,042,000NEIC Male 2,625 ($299,624) $124,373 $598,355 $687,473 $18,590,000 Female 78 $149,626 $509,637 $634,600 $5,186,075All Other Male 2,625 ($10,231,206) $13,666 $42,947 $174,929 $133,900 $45,927,900Compensa�on Female 78 $16,032 $42,962 $90,962 $154,912 $708,696Total Annual Male 2,625 ($7,831,206) $637,646 $1,029,470 $1,690,819 $1,841,870 $79,726,817Compensa�on Female 78 $287,326 $606,959 $933,002 $1,353,104 $1,621,303 $6,650,241Total Realized Male 2,625 ($4,640,149) $846,664 $1,722,985 $4,808,293 $4,117,457 $702,440,573Compensa�on Female 78 $287,326 $739,359 $1,348,710 $2,800,075 $3,350,520 $21,825,700 Contrary to a recent trend among high-profile male CEOs, no female CEO forfeited her base salary in 2008 or reduced it to a dollar, resul�ng in a minimum of $150,000 in salary for all females in the sample. At the median, female CEOs earned $40,000 more in base salary than males did in 2008. On average, that difference is reduced to less than $9,000, but this is hardly a surprise as the male maximum is more than five �mes that of the maximum female base salary. There are also 58 male CEOs making more in salary than the highest salaried female, which is likely to inflate the average. S�ll, female CEOs had higher median and average base salaries than males in both 2007 and 2008. In 2007, women earned 3.6 percent more than men in base salary at the median and 0.68 more on average. In 2008, those figures increased to 6.7 percent at the median and 1.3 percent on average, indica�ng that female CEOs are effec�vely nego�a�ng compe��ve base salaries compared to their male peers, and even exceeding males in terms of median amounts for consecu�ve years. However, when it comes to less guaranteed components of pay such as the discre�onary bonus, there is a clear separa�on of the sexes. The bonus column of the summary compensa�on table is reserved primarily for discre�onary bonuses, or those independent of weighted performance metrics and targets. Only 26 percent of all CEOs in our sample received a bonus in 2008; this represents 22 percent of female CEOs compared to slightly more than 26 percent of males. Though males are only about 4 percent more likely than females to receive a discre�onary award, men’s bonuses were, on average, more than three and a half �mes the amount of women’s bonuses. Indeed, 65 percent of the discre�onary bonuses awarded to females were under $200,000, as opposed to only 37 percent under that total for males. Clearly, any leverage women have in base salary nego�a�ons does not extend to discre�onary bonuses.6 © 2009 The Corporate Library, LLC
  8. 8. The median non-equity incen�ve compensa�on (NEIC) cash bonus for female CEOswas a full 20 percent higher than that of males, though lower on average, at the upperquar�le and at the maximum. Fi�y-eight percent of females received an NEIC cash bonusin 2008 compared to 55 percent of male CEOs surveyed, meaning that women were 3percent more likely than men to receive a bonus when the payment was a result of apre-determined formula, as is the case with NEIC bonuses. However, 24 percent of thecash bonuses awarded to females were $1 million or more, compared to 32 percent ofmen’s NEIC bonuses. Simply put, while a higher percentage of female CEOs received NEICbonuses in 2008, and females earned more at the median, the male cash bonus wasmuch more likely to be at least a million dollars in total value.All other compensa�on shows li�le difference at the median, though the average level ofthe men’s perquisites is nearly twice that of females. There are tremendous fluctua�onsin all other compensa�on amounts for males, from a minimum value of nega�ve $10million due to the nega�ve accoun�ng value of share-based equity awards for John J.Lipsinki of CVR Energy, Inc., to a maximum of almost $46 million for Mario J. Gabelli ofGAMCO Investor, Inc. By contrast, the lowest all other compensa�on amount receivedby a female CEO is simply zero, and Lorna Nagler of Christopher & Banks Corpora�onwas the only female CEO surveyed to receive more than half a million dollars in all othercompensa�on (she received $708,696).Female CEOs earned about 91 percent of what males earned in median annualcompensa�on ($1,029,470 for males and $933,002 for females) and 78 percent of whatmales earned in median realized compensa�on ($1,722,985 for men and $1,348,710for women) in 2008. In 2007, female CEOs earned about 88 percent of male medianannual compensa�on amounts and 85 percent of male realized compensa�on earnings.On average in 2008, female CEOs made 80 percent of what male CEOs made in annualcompensa�on ($1,690,819 for males and $1,353,104 for women) and just 58 percent ofaverage male realized compensa�on ($4,808,293 for men and $2,800,075 for women).In 2007, women also earned 80 percent of male annual pay on average, but earnedmuch more in average realized compensa�on at 76 percent of what males earned. Thedisparity in realized compensa�on indicates a broader separa�on in pay when profitsfrom stock op�on exercises and vested restricted stock are factored in, which could beat least par�ally explained by performance. Average return vs. peers for the 78 femalessurveyed is -16.7 percent over the last one-year period and -19.6 percent over the lastthree-year period, but a posi�ve return of 17.5 percent vs. peers over the last five-yearperiod. If more female-run companies delivered returns that are below peer averages inthe short term, this could par�ally explain lower total realized compensa�on when pay iscompared to males. © 2009 The Corporate Library, LLC 7
  9. 9. CEO tenure could also be a factor in the realized compensa�on difference. For instance, the average tenure for female CEOs surveyed was 7.3 years as opposed to an average of 8.7 years for males. This compares to similar averages in 2007, when the average female CEO had been in office 7.5 years, compared to a male average of 9.3 years. This is likely to be a contribu�ng factor in males earning more than females in total realized compensa�on, as there are addi�onal long-term equity gains in the form of stock op�on exercises and vested restricted stock that become realized over that increased service �me of about a year and a half on average. Table 2 shows the top 10 highest paid female CEOs of 2008 in terms of total realized compensa�on. In 2007, eBay, Inc. CEO Margaret Whitman earned nearly $117 million in stock op�on profits upon resigning as chief execu�ve. This liquida�on of op�ons resulted in her inclusion on our top ten highest compensated CEOs of that year. In 2008, no female CEO came close to penetra�ng the top 10 in terms of total realized compensa�on. In fact, no female ranked in the top 80.8 © 2009 The Corporate Library, LLC
  10. 10. The Top 10 Earning Female CEOs of 2008: Realized Compensa�onTable 2: 2008 Top 10 Female CEOs (Source: The Corporate Library) Total RealizedCompany Name CEO Name Industry Compensa�onUnited Therapeu�cs Corpora�on Mar�ne A. Rothbla� Ph.D. Pharmaceu�cals $21,825,700Avon Products, Inc. Andrea Jung Consumer Products $13,916,408TJX Companies, Inc. (The) Carol M. Meyrowitz Retail $12,782,791Xerox Corpora�on Anne M. Mulcahy Photographics $10,987,553PepsiCo, Inc. Indra K. Nooyi Beverages Nonalcoholic $10,765,395Reynolds American Inc. Susan M. Ivey Tobacco Products $10,309,669Kra� Foods Inc. Irene B. Rosenfeld Ph.D. Food Products $8,399,059Ventas, Inc. Debra A. Cafaro Real Estate Investment Trusts $7,600,514Alaska Communica�ons Systems Group, Inc. Liane J. Pelle�er Communica�on Services $6,940,423AnnTaylor Stores Corpora�on Katherine Krill Retail Apparel $5,251,592 A few comparisons illustrate the differences between the overall top 10 highest paid CEOs of 2008 and the top 10 highest paid female chief execu�ves. Mar�ne A. Rothbla� of United Therapeu�cs Corpora�on earned just under $22 million in 2008, roughly 3 percent of the more than $702 million in realized compensa�on accrued by Stephen Schwarzman of The Blackstone Group L.P., the highest overall earner in our 2009 CEO Pay Survey. Realized compensa�on earned by Dr. Rothbla�, 90 percent of which was comprised of stock op�on profits, was the 84th highest amount accrued by all CEOs in our study. She is also the only female CEO among the top 150 earners of 2008. Each female CEO to earn at least $5.25 million in realized compensa�on is represented on this top 10 list; in contrast, a CEO had to earn more than $70 million to make it into the overall top 10. Indeed, 21 percent of male CEOs earned at least $5 million in realized compensa�on, compared to just 14 percent of female CEOs. The only industry represented more than once in the female top 10 is retail, whereas the overall top 10 was 70 percent comprised of petroleum execu�ves enriched by climbing share prices in the industry. The only female CEO in our pay survey sample who headed a petroleum company in 2008 was Cindy B. Taylor of Oil States Interna�onal, Inc., an S&P SmallCap company. In her second year as CEO, she earned $1.4 million in realized compensa�on. Interes�ngly, the only discre�onary bonus earned by a female CEO in this top 10 was a bonus of $22,500 paid to Dr. Rothbla� at United Therapeu�cs Corpora�on, based on performance in the first half of 2008. Compare this to the overall top 10, where six out of 10 CEOs received a discre�onary bonus. The lack of discre�onary bonuses is accompanied by a lack of lucra�ve perquisites for females in the top 10, again evidenced by Dr. Rothbla�, who despite being the highest paid female CEO of 2008, earned just $16,000 in perquisites. In fact, Anne M. Mulcahy of Xerox Corpora�on, at $470,764, was the only CEO in this list to earn more than $215,000 in all other compensa�on. Indeed, the median amount in perquisites for the female top 10 is just $158,973. This compares © 2009 The Corporate Library, LLC 9
  11. 11. to a median of $921,421 in perquisite amounts for the overall top 10. For example, three CEOs in the overall top 10 earned aircra� usage reimbursements averaging $609,755. Three of the female top 10 earned aircra� usage reimbursement as well, but at an average of only $116,564. Not a single female in this top 10 list received any type of security reimbursement, as is some�mes policy at companies with high execu�ve compensa�on. In the overall top 10, three CEOs received security reimbursement in the amounts of $1.4 million, $575,407 and $279,662. Matched Sample Analysis Included in The Corporate Library’s 2009 CEO Pay Survey is a matched sample analysis, calcula�ng changes in pay for a matched sample of 2,062 CEOs who were on the job for the whole of the last two years. It is from this smaller sample that changes in CEO compensa�on are calculated, in order to compare pay changes by gender. We discovered that total annual compensa�on for our en�re matched sample declined by a median of just less than one-tenth of a percentage point from 2007 to 2008. The median decrease in total realized compensa�on was greater, with a median change of -6.38 percent. With these figures in mind, the data was then broken down further in order to compare male and female CEOs’ compensa�on changes. Chart 1 below represents a sample containing 59 female CEOs and 2,003 male CEOs in office for all of the last two years. Chart 1: 2007/2008 Fiscal Year CEO Median Pay Changes (Source: The Corporate Library)10 © 2009 The Corporate Library, LLC
  12. 12. Base salary increases were slightly larger for the males in the sample, about 4.5 percentfor men and 4 percent for women. The median annual compensa�on decline was lessthan one-tenth of a percentage point for our en�re matched sample, as discussed in our2009 CEO Pay Survey; this number is different when factoring in gender. While male CEOannual compensa�on was down almost a tenth of a percentage point, female CEO annualcompensa�on actually increased by nearly two-tenths of a percentage point. The mostnotable difference, however, is the change in total realized compensa�on. Male CEOs hada realized compensa�on decline of 6.1 percent compared to a decline of 18.5 percent forfemales.Realized compensa�on does fluctuate a certain amount annually based upon when aCEO chooses to exercise in-the-money stock op�ons as well as when restricted stockvests. Realized compensa�on is also significantly affected by stock price, as a steepdecline can render stock op�ons underwater or reduce op�on profits, and restrictedstock awards can become less valuable than intended when granted. When factoringin stock price declines, the industry affilia�ons of female CEOs could be a key factor indetermining why CEOs’ total realized compensa�on declined by a mul�ple of three �mesmore for women than for men in 2008.In our 2009 CEO Pay Survey, we calculated median pay changes by industry from 2007to 2008 for this matched sample of CEOs. In five industries among the 100 examined,realized compensa�on increases for CEOs were at least 40 percent, including AlcoholicBeverages, Farm Products, Hospitals, Jewelry and Video Rental. Aside from VideoRental, these were all successful industries for CEOs in 2007 as well, with total realizedcompensa�on increases of 27 percent to 46 percent per industry. However, there isn’t asingle female CEO in any of these industries.There were an addi�onal six industries where CEOs registered at least a 25 percentincrease in compensa�on, including Automo�ve Services, Farm Equipment, Paint &Coa�ngs, Petroleum & Coal Services, Rail Transporta�on and Tex�les. Aside fromAutomo�ve Services and Paint & Coa�ng, these industries were also profitable for CEOsin 2007, with realized compensa�on of 20 percent to 74 percent across these industries.There was, however, only one female CEO surveyed from any of these industries,Veronica Hagen of Polymer Group, a tex�le company. All four industry categoriesassociated with petroleum—Extrac�on, Equipment, Products and Services—saw medianincreases in total realized compensa�on of at least 16 percent for 2008. These fourindustries included just one female in our sample, compared to 161 males. There were,however, three female CEOs in Retail Apparel, where sampled CEOs saw a realizedcompensa�on decline of about 30 percent, and another four female CEOs in Restaurants,where realized compensa�on declined about 40 percent from 2007 to 2008. It wouldappear that a certain amount of the realized compensa�on discrepancy could be chalkedup to industry membership—that is, women CEOs primarily worked in industries thatwere nega�vely impacted by the financial crisis and other economic developments, notin industries that have prospered over the last couple of years. © 2009 The Corporate Library, LLC 11
  13. 13. 2008 Compensa�on by Gender in the S&P Indices One final vehicle for gender comparisons is a look inside the S&P indices, where compensa�on trends noted throughout the report are largely repeated. The following chart displays average amounts of 2008 pay for 1,288 male CEOs and 43 female CEOs from the S&P 500, S&P MidCaps, and S&P SmallCaps. Chart 2: 2008 S&P Indices Average Compensa�on by Pay Compenent (Source: The Corporate Library) Base Salary Bonus NEIC All Other Compensa�on Female CEOs out-earned their male counterparts in the S&P 500 in terms of base salary by about 8 percent on average in 2008, up from last year when females earned about 2.9 percent more in salary. In 2008, men earned 3.7 percent more on average in base salary at S&P MidCaps, though it was females who earned nearly 9 percent more on average in 2007. At S&P SmallCap companies, men earned 8 percent more in base salary than females compared to 2007, when they earned roughly 1 percent more in salary. Since we have established that base salaries are climbing across our en�re coverage universe, these differen�als likely have more to do with sample changes among the few women surveyed rather than any significant policy changes. Discre�onary bonus amounts for female CEOs are lower than male amounts across the board and virtually non-existent for women at S&P MidCaps. Bonus amounts for S&P 500 male CEOs were 165 percent higher than females, $628,373 for males compared to only $236,692 for females. The difference at the MidCap level is more substan�al, with males taking home $174,358 on average and females just $2,813, though MidCap12 © 2009 The Corporate Library, LLC
  14. 14. figures incorporate just eight female CEOs. At S&P SmallCaps, which has the largestconcentra�on of female CEOs in our S&P sample at 22, the female bonus was 211percent less for females ($43,000 for women compared to $133,783 for men).Female S&P Midcap CEOs earned a 24 percent higher NEIC bonus than males on average,but the differen�al shrinks to less than 1 percent in the S&P 500. In the S&P SmallCapindex, which has the largest concentra�on of female CEOs in the S&P Indices, male NEICbonuses were 89 percent higher than females on average, which could be a byproductof performance or of target-se�ng policy. All other compensa�on is most similar atS&P SmallCaps, where males earn only about 2 percent more in perquisite paymentsthan females. At S&P Midcaps, perquisite payments were 64 percent higher for men onaverage and at S&P 500 companies, men earned about 96 percent more in perks. Thereis li�le doubt that at the biggest companies in the country, women do not see the levelof perquisites that men receive.Chart 3 below illustrates average annual and realized compensa�on by gender in the S&Pfor 2008.Chart 3: 2008 S&P Indices Average Total Compensa�on (Source: The Corporate Library) Total Annual Compensa�on Total Realized Compensa�on © 2009 The Corporate Library, LLC 13
  15. 15. In the S&P 500, male CEOs earned about 14 percent more than females in average annual compensa�on but a full 84 percent more in realized compensa�on. These numbers are down from last year, when S&P 500 males earned 22 percent more in annual compensa�on and 117 percent more in realized compensa�on. Indeed, 2008 average total realized compensa�on was $13,674,504 for male CEOs in the S&P 500 and $7,431,511 for females. In 2007, male CEOs in the S&P 500 earned $15,310,000 in realized compensa�on on average compared to $7,045,000 for females. At the MidCap level, female CEOs earned 5 percent less than male CEOs in terms of annual compensa�on, and roughly 4 percent less in realized compensa�on on average in 2008. This is also an improvement over 2007, when S&P MidCap males earned 8 percent more in annual compensa�on and about 90 percent more in total realized compensa�on on average. Again, the year-to-year percent changes are due at least in part to changes in sample and the rela�vely few female CEOs surveyed, as well as the changes in market cap classifica�on a�er the deple�on of much shareholder value in the wake of the financial crisis. At SmallCap companies in 2008, female CEOs earned 35 percent less in annual compensa�on, and 72 percent less in realized compensa�on on average compared to males. In 2007, women CEOs earned 19 percent less in annual compensa�on and only 17 percent less in realized compensa�on compared to men at SmallCap companies. MidCap companies show the closest alliance between male and female pay, with women earning only 5 percent less than men in annual and realized compensa�on. However, there were only eight female CEOs in this MidCap analysis. The highest-earning female CEO of 2008, United Therapeu�cs Corpora�on founder, chairman and CEO Mar�ne A. Rothbla�, is among this group. Her stock op�on profits of nearly $20 million were enough to inflate the average female realized compensa�on for the set, where realized compensa�on for females fell more typically in the $1 million to $5 million range. At the median for MidCap companies, men earned about 3 percent more than women in annual compensa�on and almost 9 percent more in realized compensa�on. The la�er figure is perhaps more representa�ve of the disparity in pay between the genders, as stock op�on profits for each female CEO other than Dr. Rothbla� were less than $1 million in 2008. There are 13 female CEOs in the S&P 500, none of whom earned $14 million in total realized compensa�on for 2008. By comparison, 25 percent of the 438 male CEOs in the S&P 500 made at least $14 million in realized compensa�on. While males certainly make more than females on average, median figures for companies surveyed show females out-earning males in the S&P 500. Female CEOs earned nearly 27 percent more in 2008 annual compensa�on than males ($3.2 million for women compared to $2.5 million for men). Female CEOs also made about 15 percent more than men in realized compensa�on: $7.6 million for women and just under $6.6 million for males. Unlike the average S&P 500 sta�s�cs, which factor in the large bonuses, perquisites and $100 million realized pay packages found at some of the na�on’s largest corpora�ons, median sta�s�cs show women out-earning men in 2008. In 2007, when we examined a similar set of S&P 500 CEOs, women out-earned men in median annual compensa�on by a margin of $3,295,000 to $3,205,000, or 2.8 percent. Despite earning more in annual compensa�on, females made 64 percent less in median realized compensa�on:14 © 2009 The Corporate Library, LLC
  16. 16. $9,318,000 for males and $5,678,000 for females. For the 507 S&P SmallCap companiessurveyed, 22 of which had female CEOs, annual compensa�on for males was 15 percenthigher than females at the median compared to a 35-percent differen�al favoring menin average annual compensa�on. Median realized compensa�on shows males earning 23percent more than females, while male average realized compensa�on was 72 percenthigher. Only 9 percent of female SmallCap CEOs earned $3 million or more in realizedcompensa�on for 2008, compared to 24 percent of the male CEOs in the index, indica�veof the disparity in pay noted in these average and median figures.ConclusionThere are s�ll very few women CEOs, and they s�ll make less than men do, but thisis partly because women chief execu�ves tend to have shorter tenures, lead smallercompanies, and work in industries which have fared less well in the recent economicclimate. As women become more broadly accepted at the top levels of Americanbusiness, these differences may lessen, though the percentage of females occupyingthe CEO role does not appear to be on the increase currently. At the same �me,an examina�on of compensa�on policy at companies run by the 10 most highlycompensated women CEOs suggests that certain features of poor compensa�ongovernance—including large discre�onary bonuses and generous perquisite alloca�ons—may be less prevalent at companies with female CEOs. It is beyond the scope of thisstudy to assess whether this superior compensa�on governance is in fact present atthe majority of women-led companies, and if it is, whether such policies are to anydegree related to gender or of other factors which currently happen to coincide withfemale leadership (such as industry affilia�on or market capitaliza�on). It might also beinstruc�ve to know whether the compensa�on commi�ees at women-led companiestend to differ in any respect from those at the popula�on generally (for instance,whether they are more likely to include women). Other areas of future research relatedto gender pay differen�als could include differences in male and female CEO employmenthistory, career trajectories, and stock ownership. © 2009 The Corporate Library, LLC 15
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