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New Report Reveals How Companies Pay Female Executives Less Than Men

Women at the top of their fields aren't any less victimized by the pay gap. In a new study titled "Gender and Dynamic Agency: Theory and Evidence on the Compensation of Top Executives," Stefania Albanesi of the Federal Reserve Bank of New York, as well as researchers from Boston University and USC, found that female executives make less than their male counterparts and are more negatively affected by performance-based pay. In short, male executives tend to receive larger bonuses when the companies they work for do well. When those companies do not perform, it's female executives who see a loss in compensation. Albanesi and her coauthors, Claudia Olivetti and MarÍa José Prados, uncovered three distinct findings. From the report: "Female executives receive a lower share of incentive pay in total compensation relative to males. This difference accounts for 93 percent of the gender differences in total flow compensation." "The compensation of female executives displays a lower pay-performance sensitivity relative to males. A $1 million increase in firm value generates a $17,150 increase in firm specific wealth for male executives and a $1,670 increase for females." "Female executives' pay is more exposed to bad firm performance and less exposed to good

Women at the top of their fields aren't any less victimized by the pay gap. In a new study titled "Gender and Dynamic Agency: Theory and Evidence on the Compensation of Top Executives," Stefania Albanesi of the Federal Reserve Bank of New York, as well as researchers from Boston University and USC, found that female executives make less than their male counterparts *and *are more negatively affected by performance-based pay. In short, male executives tend to receive larger bonuses when the companies they work for do well. When those companies do not perform, it's female executives who see a loss in compensation.

Albanesi and her coauthors, Claudia Olivetti and MarÍa José Prados, uncovered three distinct findings. From the report:

"Female executives receive a lower share of incentive pay in total compensation relative to males. This difference accounts for 93 percent of the gender differences in total flow compensation."

"__The compensation of female executives displays a lower pay-performance sensitivity__relative to males. A $1 million increase in firm value generates a $17,150 increase in firm specific wealth for male executives and a $1,670 increase for females."

"Female executives' pay is more exposed to bad firm performance and less exposed to good firm performance than for males. A 1 percent increase in firm value generates a 13 percent rise in firm specific wealth for female executives, and a 44 percent rise for male executives, while a 1 percent decline in firm value generates a 63 percent decline in firm specific wealth for female executives and only a 33 percent decline for male executives."

The researchers analyzed data from Standard & Poor's ExecuComp, which includes executive pay for executives at S&P 500 companies. They specifically looked at data from 1992 to 2005. During that time period, female executives were found to be not just younger than male executives, but they had also spent less time at their current firms (eight years compared with 14 years) and were much less likely to hold top positions. During the time period researched, women made up just 1.4 percent of CEOs, 6 percent of CFOs, 4.5 percent of presidents, and 3.5 percent of COOs.

Age and tenure could be partially responsible for the gap in compensation, as well as the perception that the higher ranks are still a (mostly) boys' club. The researchers found that "female top executives perceive limited access to informal networks" and that, due to being younger and having spent fewer years with the company, "they might be considerably less entrenched and exert lower control on their own compensation than their male counterparts on average."

Top female executives collectively earned a lesser base salary than men, as well as smaller bonuses and fewer stock options.

Albanesi told BloombergBusiness that one key step toward more equal compensation is "increasing transparency in general in an organization but specifically with how your pay is set relative to others in similar positions."

What do you think of report's findings? Are you surprised? Not surprised? Share in the comments.