Women Narrowing Compensation Gap But Still Underrepresented in Executive Positions

March 23, 2012 Cathy Tinsley

In industries where women comprise more than 10 percent of the leadership positions, they often earn more than their male counterparts according to a new study by Catherine Tinsley, professor of management at Georgetown University’s McDonough School of Business.

Overall, the representation of women in leadership positions is less promising – with only 5 percent of executives in mid-sized companies being female, the study found.

The research came about through a new partnership between the Executive Development Program at Georgetown McDonough, which joined the U.S. Chamber of Commerce as an academic partner to launch the Chamber’s Center for Women in Business in December 2011. Drawing on the Chamber’s network of member businesses and local and state chambers of commerce, the Center for Women in Business connects mid-career women mentors with junior career women, increases the number of women on boards and in C-suites, and helps connect women entrepreneurs with their peers.

Tinsley and students from the Full-time and Evening MBA Programs conducted the pioneering study of women in small- and medium-size corporations to complement what is already known about their status large companies.
The research, titled Women in Leadership: A Look at Companies in the S&P MidCap 400 Index, 2000-2010, was presented March 21, 2012, as part of the “Women in Business: Redefining the Game” conference hosted by the Center for Women in Business. Key findings included:

• Women make up half the workforce, but percentages of women in the top ranks are disappointing.  Fewer than 5 percent of the top executives in 2010 were women. In the 10-year period the survey covered, women in executive positions never exceeded 6 percent.

• Only three industries – media, life sciences, and retailing – included women in more than 10 percent of executive positions. On the other end of the spectrum, the automobile and components industry reported no women executives.

• Although the numbers of women in the top ranks are concerning, the compensation gap is narrowing. The survey showed that, while the gender gap in compensation had been significant throughout most of the decade, by 2010, the gap had closed. In fact, in the three industries where women make up more than 10 percent of top executives, women reported making more in overall pay than their male counterparts.

• Location matters for women CEOs. Breaking the country into four regions and looking at data from 2006 to 2010, women fared best in the West (3.9 percent) and the Northeast (3.6 percent), with lower representation in the South (2.2 percent) and Midwest (0 percent).

• Contrary to research that has suggested that women are recession proof, the survey found that the slow and steady climb of women executives came to a halt at the start of the global economic contraction in 2008. This trend affected younger female executives (between 27 and 39 years old) most acutely, with a decline in their ranks starting as early as 2006.

In addition to the research initiative, the partnership will include training and leadership development opportunities.