A new report by New York-based GMI Ratings used a model that accurately predicted the gender of CFOs at at Russell 3000 Index (RAY) companies with a market value of $100 million to $25 billion in 2010.The firm said its model accurately predicted a CFO’s gender. The lower the salary, the more likely the CFO would be female.
The study is based on an analysis of salaries of more than 1,900 CFOs. Female CFOs received on average $1.32 million a year in total compensation, compared with $1.54 million for their male counterparts, according to a model based on the analysis. Compensation included base salary, bonuses, grant-date value of stock awards and stock option grants and retirement benefits. It found that female chief financial officers at U.S. companies are paid an average of 16% less than their male counterparts of similar age at companies with comparable market values.
The authors of the study tried to conduct the study from a new perspective. They went into it thinking that if men and women holding the same job did make the same amount of money then they wouldn’t be able to predict their gender but that wasn’t the case. Using the model, the authors found that, even after accounting for other factors that might affect CFO pay, including market capitalization and chief executive officer pay levels, the average female CFO would earn about $215,000 more if she were male. “To the extent that this kind of ongoing differential exists and is unexplained, it represents a failure of boards to address an important cultural issue, which is fairness,” said Eleanor Bloxham, CEO of Value Alliance Co., a board advisory firm in Westerville, Ohio.
Bloxham added that this income gap could also be a result of a lack of women on company boards who could advocate for female executives.The GMI study didn’t account for the possibility that female CFOs could have shorter work histories due to being more likely than men to interrupt their careers to bear and care for children, according to the report.
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