Effect of Gender on Executive Compensation in S&P 1500

Abstract

This paper examines the gender di erences in executive representation and compensation in the S&P 1500 from 1992 to 2015. Results show the convergence towards equal representation in the workforce has lost signi cant momentum in the past decade. Female executives are found to receive 4 to 7 percent lower total compensation than those of male executives, after controlling for characteristics at the executive, rm, and economic level. While the overall raw pay gap appears to have declined over time, the unexplained portion has remained virtually the same as two decades ago. For CEOs and executive directors, there also remains a gap in earning potential, with the male compensation frontier more outwards than the female compensation frontier. Finally, there are notable disparities in the gender pay gap across compensation components, particularly between salary and different forms of incentive pay. These findings suggest gender bias and discrimination are not necessarily obsolete in the twenty-first century labor market, and further research is needed to direct policy.