Female top executives in major European corporations earn an average of 1.2 million euros less annually compared to their male counterparts, reveals a study from the University of Tübingen. The investigation, covering 84 companies (including 16 from Germany) listed on Euro Stoxx 50 and/or Stoxx Europe 50—indices featuring the largest European companies—underscores a significant disparity in total remuneration.
The study points out that the average yearly earnings for male top executives in the surveyed companies stand at 4 million euros, while their female counterparts receive 2.8 million euros. Beyond the evident pay gap, the research also sheds light on the influence of gender perceptions associated with executive roles.
Gender norms
Particularly noteworthy is the impact of whether an executive role is viewed as “typically masculine” or “typically feminine.” This distinction plays a role in shaping top executive pay. The study suggests that understanding these dynamics is crucial in comprehending and addressing the gender pay gap prevalent at the highest echelons of corporate leadership.
In scrutinizing the root causes of this gender pay gap among top executives, the researchers unearthed various contributing factors. The findings underscore the need for comprehensive examination and targeted efforts to rectify the disparities in compensation based on gender and the perception of roles within executive structures.
“Women are comparatively often in charge of an executive function that is perceived as ‘more feminine’ and that is less well paid on average,” the researchers explain.
Executive stereotypes
The study also delved into how certain executive functions are perceived, classifying some as “more feminine” like human resources and corporate communications, while others like IT are seen as “masculine.” Strikingly, roles considered “feminine” in nature tend to receive lower pay and are more commonly occupied by women.
To gauge societal perceptions of these roles, the researchers conducted a survey. The results highlighted significant stereotypes deeply ingrained in society, with these perceptions aligning with actual executive pay. The trend indicates that the more an executive function is viewed as “typically masculine,” the higher the pay for the executive in that role.
However, it’s worth noting that women, even when occupying a “typically masculine” function, don’t enjoy the same pay advantages—this benefit seems reserved for men. This underscores the persisting gender-based pay disparities and the need for addressing ingrained biases in executive compensation.
“Women in ‘masculine’ functions are not perceived as suitable candidates for the respective job. Their clear pay disadvantage is surprising because women are in fact desperately sought after for executive positions,” the authors say.
The researchers explored and dismissed several potential reasons for the pay disparities. Notably, the differences couldn’t be attributed to the “human capital” of top executives—essentially, their qualifications. The analysis of LinkedIn profiles and company annual reports revealed that female top executives in European companies are just as qualified as their male counterparts.
