BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
ECONOMIC TRENDS

The Gender Gap in Top Brass Pay
It's a lot smaller than it seems

How large is the gender gap in compensation for top executives of U.S. companies? To find out, Marianne Bertrand of the University of Chicago and Kevin F. Hallock of the University of Illinois at Urbana-Champaign looked at data on total compensation for the top five executives of all companies in the Standard & Poor's 500, MidCap 400, and SmallCap 600 stock indexes from 1992 to 1997.

Notwithstanding the small number of women in the sample, the two economists found that on average they received about 45% less in pay, bonuses, and options than males in the top brass group, or about $900,000 a year, vs. $1.3 million. About 75% of this gap seems to reflect the fact that women tend to manage smaller companies and are much less likely to be a CEO, chair, or president. Another 20% seems due to their tendency to be younger and have less seniority than men.

The good news is that the glass ceiling appears to be cracking. The number of women in top ranks grew from 1.3% in 1992 to 3.4% in 1997, and the fraction of companies with at least one woman among the five highest-paid execs jumped from 5.4% to 15%. Moreover, their average pay rose to 73% of the male average in the sample by 1997, as more women joined the top ranks of larger corporations.

By GENE KORETZ

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