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Female CFOs in U.S. paid less than men, survey finds

Thursday, April 5, 2012  
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Male chief financial officers at U.S. companies are paid an average of 16 percent more than their female counterparts of similar age at companies with comparable market values, according to a new study by GMI Ratings, a corporate governance consulting firm.

Approximately 150 of the CFOs at the 1,900 Russell 3000 Index companies with a market value of $100 million to $25 billion that were studied in 2010 were women. The women received on average $1.32 million a year in total compensation, compared with $1.54 million for their male counterparts, according to the analysis. Compensation included base salary, bonuses, grant-date value of stock awards and stock option grants, and retirement benefits.

The lower the salary, the more likely the CFO would be female, according to the model built for the analysis. "It’s a pretty strong argument that men and women are not being treated the same,” said Tom White, director of quantitative research for GMI and co-author of the report.

White and co-author Kimberly Gladman, director of research and risk analytics, built the analysis model to test whether women are paid less than men because of factors like age or experience at a company, or simply because they are female. Although female CFOs tended to be younger than their male counterparts, there was virtually no difference in their average tenure at a company, GMI Ratings found. The women on average served on a greater number of boards.

"We tried to turn the question around a little bit,” White said. "We thought: If men and women are truly being paid the same, then their compensation won’t have any predictive value on their gender -- it should be irrelevant.”

Using the model, White and Gladman found that even after accounting for other factors that might affect CFO pay, including market capitalization and chief executive officer pay levels, the average female CFO would earn about $215,000 more if she were male.

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