Gender executive pay gap widens to 25% in US, biggest gulf since 2012

Women in the US earn, on average, 83 per cent of what men do, partly because they tend to hold the lowest-paying jobs. PHOTO: AFP

MICHIGAN (BLOOMBERG) - The gender pay gap among top executives at S&P 500 companies in the first year of the pandemic grew to its widest since 2012, fuelled in part by male executives' disproportionate gains from stock-based compensation.

In 2020, women in the C-suite earned 75 per cent of what their male counterparts took home, a report released on Wednesday (Feb 16) by investment research firm Morningstar found. That is the widest the gap has been in nine years, and down from 88 per cent - a high point - in 2018.

There were slightly more women in the highest-paying jobs at public companies than years prior and their salaries were about on a par with men in similar roles. Yet, the bulk of executive pay comes from stock-related awards and there, men outperformed women by 30 percentage points.

Of 18 executives earning more than US$50 million (S$67 million) in 2020, only one was a woman, the report found.

Morningstar analysed data from annual regulatory filings from public companies of compensation for chief executive officers, chief financial officers and the next three highest-paid executives.

Women in the United States earn, on average, 83 per cent of what men do, partly because they tend to hold the lowest-paying jobs. At the current rate of progress, it will take another four decades for women to reach parity in the C-suite, for example, according to Morningstar.

But the group's analysis also shows that even among the highest earners, there are gender gaps.

Companies are under increasing pressure from shareholders to disclose gender and racial pay gaps as a potential way to create more parity. Citigroup, Starbucks and Mastercard are among the few that publicly disclose how much men earn compared with women among their US workforces. Companies in Britain have to share that information publicly for their workers based there.

Seven US states also require job postings to show a salary range so that women have a better shot at getting the same pay as men. New York City will add that requirement in May.

Overall, S&P 500 C-suite pay rose by 24 per cent from 2012 to 2020. Men have taken home most of those gains, seeing a 27 per cent increase compared with a 10 per cent jump for women.

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