EOWA recently released a study of remuneration of the very top of the Australian corporate tree. They took the public information about the top 200 listed companies, their five highest paid executives, their top management team – described as executive managers (CEO and director reports) and analysed the gender splits by role and salary.
They point out in the study that there is no “statistical significance” problem with this – it is the entire universe of listed companies. High level numbers of interest:
12% of all the “executive managers” are women, with the highest proportion (39%) in the HR role, smallest (3%) in the CEO role.
in 10 of 13 positions, the median female remuneartion is less than the median male salary – by up to 50% for CEO and CFO
the three positions where the median female remuneration is higher are strategy, communications and support
in all line positions, female median remuneration is 28% lower than male median remuneration
in all support positions, female median remuneration is 38% lower than the male equivalent
The big question in all of this, for me is understanding the main reasons. There are two likely reasons, which interact. First, is that women are much more likely to be in the lower status jobs. Women in the study are clustered in HR, Communications and Legal roles. They are also much more likely to be in the second tier of the ASX 200 – the second 100 rather than the first. The second possibility, which is impossible to prove or disprove with this data, is that women are likely to be seriously underpaid compared with men for the same role.
The study tries to tease out some guidance as to whether the second issue is a major contributor – looking at different roles and how likely they are to be one of the top five paid executives at a company, depending on whether they are male or female. For example, in HR, one of the roles which has a significant number of women in it, half the 55 men in that role are in the top five earners at their company. But only 20% of the 38 women are in that top 5. In IT, 55% of the men make the top five earnings, but only 25% of the women.
So I think it is very plausible that there is some serious underpaying of women going on for the same roles. At the steps immediately below the top table, corporate culture dictates that remuneration is very opaque. Nobody knows how much anybody else is paid. In that kind of situation, the aggressive negotiator who has a high regard for their own value is much more likely to be well paid than the person who relies on the company to do the right thing, and meekly takes the remuneration offered. And it is much easier for the company to offer wildly unequal levels of remuneration. The higher you get in any organisation, the less your position is directly comparable with others. It’s much harder to work out what the market is, and so the employer is in a much stronger bargaining position from that information asymmetry. In my experience of managing remuneration reviews over the last five years or so, women are more likely to be at the meek end of the spectrum. Since remuneration is usually reviewed compared with what you are currently getting, a few years of lower increases can add up to a substantial difference after a while.
And many managers do, unconsciously or consciously, discriminate against women. I’ve written about this before – the same trait in men and women – say ambition – is often regarded much more negatively in a woman than a man. And that will definitely feed through into performance reviews and remuneration outcomes.
These days, most stories about women in the corporate, professional, workplace tend to suggest that discrimination is old hat – it might still happen, but much of the discrepancies are from other causes. That what might be holding women back is about workplace flexibility, or lack of mentors, or childcare responsibilities. But this study plausibly suggests that there’s still discrimination happening in the corporate world, and it applies from the very top.