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January 14, 2013

Gender Difference in Executive Compensation

It is appalling to note that in today’s world gender equality has not been achieved. Today, a less number of women attain executive managerial positions in the workplace compared to their male counterparts yet they possess similar or even more skills and experience. It is also evident that women earn less in the course of their career. Women are also likely to hold most junior positions in any workplace setting in America. There exists a difference between the pay awarded to women and men in top jobs and this can be attributed to firm size, occupational segregation, level of education, industrial segregation and individual demographic characteristics. This paper is to identify the pay differences that exist between men and women who hold executive jobs.

In the workplace today, women are more likely to hold executive positions that are lower as compared to their male counterparts. Such positions include senior vice president, company secretary while the male are likely to hold positions such as chief executive officer and president. Men and women usually attend the same institutions of learning before they join the job market. It is also expected that at higher levels of education women should earn the same levels as men, unfortunately a gender gap in terms of wages exists for individuals holding higher levels of education. These are the same individuals who take executive positions in the workplace.

Male dominated occupations are usually high paying and this include lawyers, engineers and pilots, however this does not mean that women who venture into the same occupations earn the same amount of money. Most jobs which are viewed as requiring feminine skills are usually perceived as less prestigious and hence end up getting less pay.

Women in executive positions are likely to be found working in smaller organizations when compared to their male counterparts. It is common knowledge that executive compensation tends to rise or increase as size of the organization or corporation increases. This clearly shows that the gender gap in terms of compensation in executive positions can be attributed to under-representation of female employees in large organizations.

Women are most likely to be found managing corporations that normally specialize in social services, hospitality and health. In contrast more men are likely to be found holding top-level jobs in industries or corporation such as construction and mining. A sector such as banking is has more women taking up lower level management jobs unlike the male counterparts who tend to hold top level managerial positions. This industrial segregation accounts for the gender gap that arises in compensation.
The discrepancies in gender compensation can also be attributed to women being less likely to put in more work hours when compared to men and also not willing to relocate unlike the male counterparts. Women are more inclined to taking care of the family and may reject jobs or promotions based on the length of time they are likely to spend with their families. These translate to fewer women taking up executive positions and hence lower pay and compensation unlike their male counterparts. The gender gap in terms of compensation can also be attributed to lack of women in compensation committees. Such committees are mostly dominated by men and hence an increased number of women in such committees is likely to reduce the gap existing between men and women on compensation.

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