Compensation differences between male and female CEOs for publicly traded firms: a nonparametric analysis

Abstract

A recent article in the popular press suggested that gender is one determining factor of corporate executives' pay. The average compensation for the top 20 men was more than 10 times larger than for the top 20 women. We would expect, however, that direct compensation from salary and bonuses would be similar for both genders given the public nature of the data. There have been few academic articles on the topic of gender pay differences among top executives. One paper found marginally significant statistical evidence that women CEOs are paid more than their male counterparts. In this paper, we extend the literature by looking at compensation differences of male and female CEOs. Our sample includes over 40 female CEOs for publicly traded companies and matched pairs of comparable male CEOs. In addition, we use data envelopment analysis to derive a gap measure representing the difference between male and female compensation. The results suggest that there is a statistical difference between male and female potential compensation.