New Tepper School Study Finds Women Get Better Pay,
Same Promotion Rates as Men at the Executive Level
Women Leaving Workforce Earlier than Men Is Primary Reason Fewer Break Through "Glass Ceiling"
PITTSBURGH—Female executives who break through the "glass ceiling" in corporate America are rewarded with higher overall compensation than their male counterparts and benefit from the same rate of promotion, according to new research from the Tepper School of Business at Carnegie Mellon University. However, the study also found that the number of females in top executive positions remains a mere fraction of business leadership overall largely due to the tendency of women to leave the workforce earlier than men.
The findings, gleaned from tracking the career paths and compensation of more than 16,000 executives over a 14-year period, identified that female executives actually earned a total of about $100,000 more per year than men of the same age, educational background and job experience. On average, total compensation for all of the executives — about 5 percent of whom were female — was about $2.46 million, including nearly $461,000 in salary and bonuses. The average age was 53 and approximately 23 percent of the executives studied — men and women — held an MBA.
However, women within the overall sample were, on average, younger and less experienced than males at the executive level and more prevalent at the lower executive levels. For example, only 2 percent of executives at the CEO, president or chairman level were female, while women represented nearly 6 percent of CFOs or vice presidents.
"Women aren't climbing as many rungs on the executive ladder because they are more likely than males to retire earlier or switch careers," said Robert A. Miller, professor of economics and strategy at the Tepper School and one of the study's co-authors. "Although women may still be likely to face gender discrimination through unpleasant work environments or tougher, less rewarding assignments, our results find that there does appear to be equal pay and equal opportunity for women if they stay in the workforce and get to the executive level."
A snapshot of executive pay and career progression
Miller and his colleagues compiled comprehensive data representing 60 different job titles at more than 1,800 companies between 1992 and 2006 using Standard & Poor's ExecuComp database and Marquis' "Who's Who." Grouping the executives into seven different ranks based on titles, the study analyzed trends in promotion rates and total compensation — including salary, bonus, stock, options, retirement schemes and other information — for both men and women.
The study indicates that job turnover and tenure as well as education are better overall indicators of compensation rather than gender. In terms of compensation, an executive's history of career turnover and the presence of an MBA or other advanced degree tend to have the greatest impact. In fact, Ph.D. and MBA graduates earned a total of about $300,000 more per year than executives with only an undergraduate degree and a total of $686,793 more per year than those with just a professional certification.
Executives in the consumer sector were less likely to have advanced degrees, but that industry had the highest percent of females in executive positions. In contrast, the service sector had the lowest average executive tenure, but the highest promotion rates and highest total compensation. In addition, executives at large firms were paid nearly twice as much as executives from small firms, but both promotion and turnover rates were greater at larger firms.
The study — titled "Are There Glass Ceilings for Female Executives?" — was conducted by Miller along with George-Levi Gayle and Limor Golan, both assistant professors of economics at the Tepper School, and supported by the Center for Organizational Learning, Innovation and Performance at Carnegie Mellon. A PDF of the working paper is available for download at http://www.comlabgames.com/ramiller/working_papers/GC100708.pdf.