Are female CEO’s undercompensated?

In this article we continue the examination of top executive pay by comparing performance, total pay and the influence of CEO gender. We analyse compensation differences between male and female CEOs using nonparametric analysis. We calculate the potential compensation for each executive using two benchmarks. First, each executive’s performance and compensation are evaluated relative to members of the same gender to produce a same-gender measure of under-compensation. Each executive’s compensation is also benchmarked against the other gender’s potential compensation, producing an other-gender measure of under-compensation. Together, both measures allow an analysis of the gender-specific potential salaries of each executive while controlling for performance. The approach is applied to a sample of male and female executives. The results indicate that women are under-compensated.

Source: “Influence of firm performance and gender on CEO compensation” from Applied Economics, Volume 39, Issue 9 May 2007 , pages 1107 – 1113

If you’re interested in Wall Street I recommend Liar’s Poker and Den of Thieves. I don’t know if this is really a business book or not but it can help you in business and in life. One reason I’m hesistant to call it a business book is because it is well-written.

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