Gender differences in CEO compensation: evidence from the USA

Abstract

PurposeTo provide insights into the experience of women aspiring to the CEO position, particularly regarding qualifications and compensation expectations.Design/methodology/approachThe ExecuComp database of executives at 1,500 large US corporations from 1992 to 2004 was used to identify women CEOs and to examine gender differences in compensation of executives over that period. Additional information about the backgrounds of female CEOs was collected from company press releases and regulatory filings.FindingsWomen are not as highly compensated as men before becoming CEO but the few who reach the CEO position receive similar compensation as men. While women CEOs are younger on average than men, they have impressive work experience and education.Research limitations/implicationsThe study covers relatively large US companies that are publicly traded; thus, smaller firms and privately‐held firms are not included.Practical implicationsImpressive work experience, usually from within the company, and a strong education seem to be associated with promotion to the CEO position. Female executives should be more aware of the existence of gender differences in compensation at positions other than the CEO.Originality/valueMuch is written about the gender‐based duality of the leadership career and the overall gender gap in compensation. This study adds an in‐depth analysis of compensation at the top of the executive ladder to better understand who makes it to the top and whether they are equitably rewarded.