Role Of Women Ceos Have A Lower Compensation Than Men

In “The Overpaid CEO” Susan Homberg and Mark Schmitt bring to attention how CEO pay in America is ridiculous in numbers as opposed to other parts of the world. Looking back, in the nineteen hundreds CEO pay was relativity average. As businesses and companies began to expand there was a demand for higher pay. Between 1978-2012 CEO pay increased by 875%! Many rules and regulations were put in to place to limit the pay of a CEO, such as the Securities Exchange Act that I will explain later on, regardless CEO pay kept getting higher and higher as many loopholes were found. Bonuses pay a large part in the salaries of CEOS’, as an effect CEOS’ tend to partake in risky behavior in order to score those big paychecks.

This paper will discuss the reasons why CEOs are not being overpaid. It will apply the utilitarian ethical principle to many a few aspects to CEO compensation and whether or not it is justifiable for such pay. The paper will look at whether or not their performance is justifiable for the pay because they play such a big role in the livelihood of the company along with the principle agency theory and how it is being addressed for the benefit of the shareholders and others involved with the company, the supply and demand of the CEOs, and the paper will describe the comparison of other professions to help link the idea of CEOs being fairly compensated.

Executive Compensation. I’m in agreement with Thomas Piketty that the one cause of rising inequality in the United States “the rise of supersalaries” for top executives (Piketty & Goldhammer, 2014, p. 298). The average American estimates CEO to worker pay ratio at about 30-to-1, which is more than 4 times what they believe to be ideal. The career review site Glassdoor reported from 2014 data that the average pay ratio of CEO to median worker was 204-to-1 and that at the top of the list, four CEOs earn more than 1,000 times the salary of their median worker with the very top pay ratio of 1,951-to-1. In some cases a CEO makes in one-hour what it takes the average employee six-months to earn. In comparison, the Washington Post reported for the

In the United States, study after study continues to show that women have fewer opportunities to advance in the workplace than men. These disadvantages are a result of society’s views of women in leadership positions and how women may view themselves in these roles. Women have been making progress in terms of equality in pay and job positions, but significant gaps remain. Women who strive to be promoted into higher levels of responsibility in their companies often meet resistance that prevents them from achieving the goal of a senior or executive level of management. This barrier is referred to as the “glass ceiling” and it is a controversial issue in our country today. The glass ceiling called this because women are able to see the higher level positions, but can reach them because of an intangible barrier. One can look at the Fortune 500 companies, which are the most successful companies in the U.S. in terms of revenue to see how few women are in leadership positions. Clearly, women are significantly underrepresented in these companies, as less than 5 percent of these companies have female chief executive officers (CEO) today (Dockterman 105). Providing the opportunity for women to move into management positions, like CEOs, would bring a unique talent and a new perspective on how the company can operate to perform better (Buckalew 147). The “glass ceiling” is a real obstacle that creates an intangible barrier that puts women at a disadvantage in advancing in a company.

Why are there not more women in the upper ranks of corporate America? Is it because women slow down or stop career plans to spend more time caring for family? Or possibly because they are just less ambitious than men and don’t have the confidence? Simple answer: No. Something else is occurring whilst on their way to the top. Women are not surrendering their vocations in huge numbers. Parenthood actually builds their craving for winning advancements; and women by large don 't lack of aspiration or certainty that they can use to go up against difficult tasks. Yet when asked whether they want a top role in their companies or industries, a majority of women say they would rather not grab the brass ring.

CEOs usually get paid a lot more than any of their employees and it is believed that the ratio between the CEOs salary and the average employee salary has continued to increase throughout the years (Mackey, 2014). The increase in the CEOs salary is mainly attributed to two factors: First, the required skills and the high responsibilities that are associated with this position. Second, the number of qualified people who could fill such a position is really limited (Executive Compensation, n.d.). This does explain the

Although in 2012, only 18 women served as CEOs of Fortune 500 companies. Furthermore, in a recent report, women only held 16.6% of board seats in 2012 in the fortune 500 companies (Aguilar). Women are somehow being held back from achieving their higher potential, and is is not due to lack of education. The department of education found that “140 women will graduate with a college degree at some level this year for every 100 men”(Aguilar). Most people believe the reason is because of the phenomenon of the “glass ceiling”. Many large companies do not hire women for the upper level positions, because they have always hired men, and many companies may believe that they do not see women in that position. This is also influenced by the media as well, as “women hold only 3% of clout positions in telecommunications, entertainment, publishing and advertising.”(Newsom 2011). With so few women leaders in the media industry, women are rarely portrayed in highly respected executives roles. This in turn communicates to young girls and the public in general that women are not supposed to hold these

Today in America it is difficult to comprehend that there is still a sizable disparity between men and women concerning with leadership and wages. Women in the American workforce constitute 47%. However, there is an extensive compensation-earning differential between men and women. Additionally, women are still lagging behind men in leadership positions. Everyone is entitled to equal pay; however, compensating based on this guidance is difficult because there are additional factors organizations consider. Advancement into leadership positions should be filled with the most qualified individuals. After reviewing why there is a wage gap (laws and organization interpretation, reason for wage gaps, and pay secrecy role) and women in leadership

For every dollar a man makes, a woman makes seventy-four cents. Though this is illegal due to the Equal Pay Act in 1963, there are several reasons for the existence of gender pay gaps in the United States. One reason why women make less than men is because men are more likely to promote themselves/ask for promotions then women are to do so because they fear they should be modest or else they will look abrasive. Women work hard, and higher and higher rates as time passes but they still do not take over the highest paying/highest position jobs. A study of job negotiations was done, and the results show that male workers were at least eight times more likely to negotiate starting pay than female students. Along with this, it seems that women become penalized when trying to negotiate salaries, while men are generally not questioned for negotiating salaries, so it seems like women do not have ambition when really it is very hard to ask for something as such. This labeled “lack of ambition,” as brought up above is part of the reason why women have trouble making it to the top. Since they have trouble making the connections to ask for promotions and raises and keep pushing themselves forward, they remain stagnant in their work positions while men move up. According to American Society, by Erik Olin Wright, only 4.2% of women are CEOs among top fortune 500

In Peter Eavis’ article “Executive Pay: The Invasion of Supersalaries” the conflict of CEOs and top executives outrageous pay grade is discussed. Even though the “compensation machine” of Corporate America is running smoothly, there are multiple negative and dark undertones. In fact, many people believe that these shocking salaries are the roots of inequality within America. Currently, some CEOs are being compensated millions and millions of dollars as their normal annual salary. Even though the current executive compensation system focuses on performance and can “theoretically constrain pay,” there is nothing stopping the companies from giving their CEOs more. According to the Equilar 100 C.E.O Pay Study, “the median compensation of a

Another reason for job inequality could be the misconception that women are unable to make rational decisions, because they are emotionally driven. Women are emotional creatures, but their emotions do not override common sense. Typically, women have to study more, and work harder than a man to achieve their position of power. According to the Harvard Business Review Women, still face tougher odds not only getting into, but also staying in the C-suite. (CEO). They conducted a study in which they studied the leadership of the world's top 2000 companies; they found that 29 (1.5%) of those CEOs were women. The Harvard Business Review also notes the difference between men and women CEOs and "suggests that women still aren't treated as equals to men when it comes to high-stakes positions." Another study by Darden Professor Erica James reported that stock in a company drops after the announcement of a female CEO, but not after that of a male CEO.

This report explores the issue of the pay that top executives make, and the reasons why they do. It also suggests improvements that can be made to make the system better. High Pay Seems Small When Compared To Company Profits Many companies pull in profits that are extremely high. When an employee of such a companies salary is compared to the amount of profit that the company earns, it starts to seem reasonable. It only makes sense that if the employee is directly responsible for the success of their company, then they deserve to get their payback. It seems ironic, but many salaries even look small once compared with a companies profits. Top Executives Are Under A Lot Of Pressure Being the CEO of a

Given the effect a CEO can have on a company's success, we can understand why their compensation packages

Even though numbers are slowly rising in the United States, there are still more men in executive positions than women. According to one survey, female workers only made up 43% of legislators, senior managers, and senior officials whereas male workers made up 57%. In congress, congresswomen make up only 17% of representation compared to congressmen making up 83% (Ferrante, 2011, p. 312). Gender stratification is one explanation for the tremendous gap. Ferrante (2011) describes gender stratification as the unequal distribution of opportunities and resources amongst male and female employees. (p. 311) For example, male workers have an increased opportunity to receive a promotion than a female worker. According to Tinsley (2013), women are more likely to receive executive positions when a company is doing well, rather than when a company is suffering. Some companies stereotype that women workers will leave the workforce soon to bear children, limiting their chances of achieving executive status (Ferrante, 2011, p. 316).

“The wage gap has narrowed by more than one-third since 1960”(Hegewisch, 2010) and “the share of companies with female CEOs increased more than six-fold” (Warner, 2014) since 1997. As well as the truth that men and women’s earnings differ for many other reasons besides the presence of sexism. “Discrimination in labor market, in education/retiring programs, unequal societal norms at home and the constrained decisions men and women make about work and home issues” (Hegewisch, 2010) are also factors that can contribute to the unequal treatment of man and women in the workplace. Yet even with most of these variables removed women are still being paid less than men, sexually harassed in the workplace and hold very little managerial positions.