CBS analyst Mellody Hobson, whose husband George Lucas is worth $7.3 billion, appeared on This Morning to slam excessive salaries for corporate bosses. Discussing income inequality and Barack Obama's planned discussion at the State of the Union, Hobson lashed out, "If you look today, the typical CEO makes 354 times more than the typical worker in his or her company, mostly his because there are so few women running companies."But the last line is what really amazes me--that she believes that income disparity is the result of too few women running companies. Well, my own experience has not shown women to be any more altruistic than men (and probably the opposite is true). I couldn't find any articles or studies supporting Hobson's assertion, but the Ivey Business Journal discussed female executive compensation last year, and noted:
In 2009, Yahoo CEO Carol Bartz received a pay package of $42.7 million, believed to be the largest in history for a female executive. Bartz was not the only female executive whose compensation raised a few eyebrows. That same year, Irene Rosenfeld, the CEO of Kraft Foods Inc., received $26.3 million in total compensation, while Indra Nooyi, the chair and CEO of PepsiCo (and Number One on the 2010 Fortune list of the “50 Most Powerful Women”) took home $14.9 million.So, income disparity was allegedly growing at the same time more women were being promoted to executive positions and being paid more.
CEO compensation is based on a number of elements, including tenure, the ability of a CEO to return value to shareholders, and the competitive advantage they establish for the firm. The pay packages above might suggest that Bartz, Rosenfeld and Nooyi are the vanguard of a trend that will see significant increases in compensation for female leaders and that will erase the long history of significant gender pay disparity at the upper echelon level.
This trend appears to be supported by an examination of pay packages in some of the largest global companies. According to 2009 data compiled by Bloomberg News, the 16 female CEOs who headed companies included in the Standard & Poor’s 500 Index had earnings that were, on average, 43 percent higher than earnings for males. These female CEOs also received an annual 19 percent raise, while their male counterparts experienced a 5 percent cut. And it is worth remembering that all of these salaries and increases were granted during a global recession.
I would also note that this is a different issue than the male-female income gap, which has been shown to be false at low and mid-level positions, and results at higher positions due to women choosing not to follow the executive path.
H/t Weasel Zippers