I want to talk about compensation, specifically Mary Barra's compensation. Mary is the first female CEO of an automotive company--General Motors-- where she has spent her entire career moving up the ranks from entry-level jobs to the corner office. GO, MARY!
But first, I have to correct an error in last week's post. The Zero-Zero survey in Massachusetts is conducted by The Boston Club, not 2020Women on Boards, although the latter organization does survey the female composition of public company boards. Zero-Zero means no women in the senior management ranks; no women on the board of directors. This condition of American companies is not unusual, but it definitely doesn't characterize General Motors, where there is now a woman CEO and five women on the 14-member board.
Executive compensation is a hot topic these days since most CEO salaries are hundreds of times larger than employee pay, and that gap has been getting wider and wider in just the last few years. But Mary Barra's salary was in the news because it was thought to be significantly lower than her male predecessor's. GM subsequently revealed that her total compensation was actually more than his at $4.4 million salary, plus $10 million in long-term compensation tied to performance.
Perhaps it helped that as a "first" in this major male-dominated industry, the whole world was watching and maybe waiting to pounce. How refreshing, since the earnings of less visible female CEOs of the S&P 500, reflect the overall workplace discrepancy between male and female salaries-- a fact that rarely gets attention.
One female CEO, who is an amazing success story, makes 25% less than all the other CEOS in the food and beverage industry, and not because the company is performing poorly. A female CEO in pharmaceuticals makes one-third of the earnings of the top male execs in her field.
A recent Bloomberg survey found that the best-paid female executives make 18% less in compensation than their male counterparts. Overall in 2012, women made $10,784 less than men in the same jobs. Noting that the percentage difference in female and male salaries in England has gone from 2.4% to 3% in a year, a business publication noted, "at this rate it will take women 98 years to catch up"! Meghan Casserly of Fortune magazine writes that the gap also widened between 2011 and 2012 in America.
We all know that compensation depends on a many variables. Some executives make a lot more money than others because they are measurably better, more competent at their jobs. But are we convinced that gender is a major factor in determining competence? On the contrary, it is widely accepted that for a woman to advance, especially on the narrow executive track, she has to be more competent than her male challengers.
One group that is working to change these attitudes and practices are the women directors of public companies. Many of the 58 women profiled in The Board Game: How Smart Women Become Corporate Directors by Betsy Berkhemer-Credaire, say they regularly raise the issue of the training, opportunities and promotions for women in the company, advocating for fairness and equality. They are often instrumental in increasing awareness and implementing change.
So more women on boards not only contribute to improved company performance, they also advocate for a more level playing field for women in the companies they serve.