Earlier this week a report was released that found that female CFOs 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 as well as others quoted in the story on the report in Bloomberg blamed the income gap on gender discrimination. However, Steve Tobak, a former senior executive and consultant, and others made a compelling argument for why women are making less at this level, and sexism was not the reason.
“It’s actually the result of men and women making different choices. In other words, it is what it is: no corrective action — affirmative or otherwise — required,” wrote Tobak. He also pointed out that in the CFO study, released by GMI Ratings, there were a number of other factors not accounted for that contributed to this disparity.
- Women and men may not negotiate the same way: Though we offer a lot of resources on negotiating right here on this site, this is something women just naturally don’t do as much men and statistically aren’t as good at as their male colleagues. Lisa Gates, founder, trainer and coach of She Negotiates, an institution that helps women with essential negotiation skills that positively impact every area of their life and work Forbes writer, said, “We keep quiet, we don’t speak up. That is our first biggest mistake,” she said. Look for opportunities to show off your accomplishments to your manager. “Women have to learn how to sing their own praises. The female thing we do is use words like ‘pretty good’, ‘sortuv’, ‘kinduv’. Men naturally brag and it looks good on them. When we do it, we judge ourselves and we judge others.” Sabrina Parsons said “My immediate gut reaction is to call loudly for negotiation classes for young women in high school and at the college level. Offer classes that specifically deal with acceptable negotiation practices.”
- Men usually have longer executive careers: Even though the study accounted for tenure at the company, it did not account for tenure at the executive level. On average, men have been at it longer. Also, the number of successes and accomplishments under their belts due to career longevity influences compensation, wrote Tobak.
- Men jump companies more than women: Though research shows that staying at one company for at least five years can pay off in the long run, it may not do so in the short term. The CFO report mentioned that women may be more likely to move up within one company while men may be more likely to switch jobs.” The latter typically leads to higher executive compensation, according to the article and in my experience. That was also not accounted for in the study,” wrote Tobak.
- Men and women are not equally motivated by the same factors. It’s well documented that women weigh non-compensation factors such as work flexibility, security, and benefits more heavily than men. That alone could account for a significant difference in compensation. We have seen many studies showing that women would sacrifice a lot of things, including higher compensation, in exchange for a more flexible work schedule or working from home. According to another recent study, women work longer days and report working more often on vacation than their male colleagues but they are much more satisfied with their compensation than their male counterparts.
- Gender bias in job performance: With this one, Tobak admits that gender does play a role. “Like it or not, the vast majority of CEOs, senior executives, and board directors — those influencing the CFO hiring decision — are men. So, to be fair to the subject, I have to admit that some men will likely have a gender bias or perception that men will be more aggressive in terms of job performance than women. And that will affect the offer,” he wrote.
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