International Differences in the CEO Gender Pay Gap

Chen, Xiaoqi; Torsin, Wouter; Tsang, Albert

doi:10.1111/corg.12421

Request a copy

Article (Scientific journals)

International Differences in the CEO Gender Pay Gap

Chen, Xiaoqi; Torsin, Wouter; Tsang, Albert

2022 • In Corporate Governance: An International Review, 30 (5), p. 516-541

Peer reviewed

Permalink
https://hdl.handle.net/2268/266028

DOI
10.1111/corg.12421

Files (1)Send to Details Statistics Bibliography Similar publications

Files

Full Text

CGIR.pdf

Publisher postprint (1.71 MB)

Request a copy

All documents in ORBi are protected by a user license.

Send to

RIS BibTex APA Chicago Permalink X Linkedin

Details

Keywords :

CEO compensation; Gender pay gap; International differences

Abstract :

[en] Using executive compensation data from 27 countries over the 2001–2016 period, this study documents a 3.3% average difference in the level of executive compensation between male and female CEOs in countries around the world. The results further indicate that firms that transition from a male to a female CEO tend to have a significantly lower level of compensation. These results are robust when controlling for an array of key CEO attributes including education, age, and work experience and when US firms are excluded from the sample. Our findings also suggest that attitudes related to gender equality across countries can be an important factor explaining the CEO gender pay gap observed in our study.

Disciplines :

Finance

Author, co-author :

Chen, Xiaoqi; Xiamen University

Torsin, Wouter ; Université de Liège - ULiège > HEC Liège : UER > UER Finance et Droit : Financial Reporting and Audit

Tsang, Albert; Hong Kong Polytechnic Universtiy

Language :

English

Title :

International Differences in the CEO Gender Pay Gap

Publication date :

2022

Journal title :

Corporate Governance: An International Review

ISSN :

0964-8410

eISSN :

1467-8683

Publisher :

Blackwell, Oxford, United Kingdom

Volume :

Issue :

Pages :

516-541

Peer reviewed :

Peer reviewed

Available on ORBi :

since 14 December 2021

Statistics

Number of views

144 (11 by ULiège)

Number of downloads

5 (5 by ULiège)

More statistics

Scopus citations^®

Scopus citations^®
without self-citations

OpenCitations

Bibliography

Adams, S. M., Gupta, A., Haughton, D. M., & Leeth, J. D. (2007). Gender differences in CEO compensation: Evidence from the USA. Women in Management Review, 22(3), 208–224. https://doi.org/10.1108/09649420710743662
Algan, Y., & Cahuc, P. (2006). Job protection: The macho hypothesis? Oxford Review of Economic Policy, 22(3), 390–410. https://doi.org/10.1093/oxrep/grj023
Alksnis, C., Demarais, S., & Curtis, J. (2008). Workforce segregation and the gender wage gap: Is “women's” work valued as highly as “men's”? Journal of Applied Social Psychology, 38, 1416–1441. https://doi.org/10.1111/j.1559-1816.2008.00354.x
Armstrong, C. S., Gow, I. D., & Larcker, D. F. (2013). The efficacy of shareholder voting: Evidence from equity compensation plans. Journal of Accounting Research, 51(5), 909–950. https://doi.org/10.1111/1475-679X.12023
Arulampalam, W., Booth, A. L., & Bryan, M. L. (2007). Is there a glass ceiling over Europe? Exploring the gender pay gap across the wage distribution. Industrial & Labor Relations Review, 60(2), 163–186. https://doi.org/10.1177/001979390706000201
Atkinson, A. B., Casarico, A., & Voitchovsky, S. (2018). Top incomes and the gender divide. Journal of Economic Inequality, 16, 225–256. https://doi.org/10.1007/s10888-018-9384-z
Bae, K.-H., Tan, H., & Welker, M. (2008). International GAAP differences: The impact on foreign analysts. The Accounting Review, 83(3), 593–628. https://doi.org/10.2308/accr.2008.83.3.593
Baker, G. P., Jensen, M. C., & Murphy, K. J. (1988). Compensation and incentives: Practice vs. theory. The Journal of Finance, 43, 593–561. https://doi.org/10.1111/j.1540-6261.1988.tb04593.x
Balsam, S., Kwack, S. Y., & Lee, J. Y. (2017). Network connections, CEO compensation and involuntary turnover: The impact of a friend of a friend. Journal of Corporate Finance, 45, 220–244. https://doi.org/10.1016/j.jcorpfin.2017.05.001
Barker, V. L., & Mueller, G. C. (2002). CEO characteristics and firm R&D spending. Management Science, 48(6), 782–801. https://doi.org/10.1287/mnsc.48.6.782.187
Bertrand, M., Duflo, E., & Mullainathan, S. (2004). How much should we trust differences-in-differences estimates? Quarterly Journal of Economics, 119(1), 249–275. https://doi.org/10.1162/003355304772839588
Bertrand, M., & Hallock, K. F. (2016). The gender gap in top corporate jobs. Industrial & Labor Relations Review, 55(1), 3–21. https://doi.org/10.1177/001979390105500101
Bugeja, M., Matolcsy, Z. P., & Spiropoulos, H. (2012). Is there a gender gap in CEO compensation? Journal of Corporate Finance, 18(4), 849–859. https://doi.org/10.1016/j.jcorpfin.2012.06.008
Burbidge, J. B., Magee, L., & Robb, A. L. (1988). Alternative transformations to handle extreme values of the dependent variable. Journal of the American Statistical Association, 83(401), 123–127. https://doi.org/10.1080/01621459.1988.10478575
Cameron, A. C., Gelbach, J. B., & Miller, D. L. (2011). Robust inference with multiway clustering. Journal of Business & Economic Statistics, 29(2), 238–249. https://doi.org/10.1198/jbes.2010.07136
Conyon, M. J., Core, J. E., & Guay, W. R. (2011). Are U.S. CEOs paid more than U.K. CEOs? Inferences from risk-adjusted pay. The Review of Financial Studies, 24(2), 402–438. https://doi.org/10.1093/rfs/hhq112
Custódio, C., Ferreira, M. A., & Matos, P. (2013). Generalists versus specialists: Lifetime work experience and chief executive officer pay. Journal of Financial Economics, 108(2), 471–492. https://doi.org/10.1016/j.jfineco.2013.01.001
Dechow, P. M. (1994). Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals. Journal of Accounting and Economics, 18(1), 3–42. https://doi.org/10.1016/0165-4101(94)90016-7
Dehejia, R. H., & Wahba, S. (2002). Propensity score-matching methods for nonexperimental causal studies. Review of Economics and Statistics, 84(1), 151–161. https://doi.org/10.1162/003465302317331982
Dey, A., Engel, E., & Liu, X. (2011). CEO and board chair roles: To split or not to split? Journal of Corporate Finance, 17(5), 1595–1618. https://doi.org/10.1016/j.jcorpfin.2011.09.001
Dreher, G. F., Lee, J. Y., & Clerkin, T. A. (2011). Mobility and cash compensation: The moderating effects of gender, race, and executive search firms. Journal of Management, 37(3), 651–681. https://doi.org/10.1177/0149206310365728
Eagly, A. H. (1987). Sex differences in social behavior: A social-role interpretation. Lawrence Erlbaum.
Eagly, A. H., & Carli, L. L. (2003). Finding gender advantage and disadvantage: Systematic research integration is the solution. The Leadership Quarterly, 14, 851–859. https://doi.org/10.1016/j.leaqua.2003.09.003
Ellwood, S., Garcia-Lacalle, J., & Royo, S. (2020). The shattered glass ceiling and a narrowing gender pay gap in NHS foundation trusts: Gender and salaries of chief executives. Public Money & Management, 40(1), 31–41. https://doi.org/10.1080/09540962.2019.1621052
Ely, K. (1991). Interindustry differences in the relation between compensation and firm performance variables. Journal of Accounting Research, 29(1), 37–58. https://doi.org/10.2307/2491027
Equilar. (2016). How CEO pay differs around the globe. Retrieved online at: https://www.equilar.com/press-releases/53-how-ceo-pay-differs-around-the-globe.html
Equilar. (2017). Equilar|Associated Press CEO Pay Study 2017. Retrieved online at: https://www.equilar.com/reports/48-associated-press-ceo-pay-study-2017
Estrin, S., & Mickiewicz, T. (2011). Institutions and female entrepreneurship. Small Business Economics, 37, 397–415. https://doi.org/10.1007/s11187-011-9373-0
Falato, A., Li, D., & Milbourn, T. (2015). Which skills matter in the market for CEOs? Evidence from pay for CEO credentials. Management Science, 61(12), 2845–2869. https://doi.org/10.1287/mnsc.2014.2024
Fang, L. H., & Huang, S. (2017). Gender and connections among wall street analysts. Review of Financial Studies, 30(9), 3305–3335. https://doi.org/10.1093/rfs/hhx040
Finkelstein, S., & D'aveni, R. A. (1994). CEO duality as a double-edged sword: How boards of directors balance entrenchment avoidance and unity of command. Academy of Management Journal, 37(5), 1079–1108. https://doi.org/10.5465/256667
Fortin, N. M. (2005). Gender role attitudes and the labour-market outcomes of women across OECD countries. Oxford Review of Economic Policy, 21(3), 416–438. https://doi.org/10.1093/oxrep/gri024
Francis, B., Hasan, I., Park, J. C., & Wu, Q. (2014). Gender differences in financial reporting decision making: Evidence from accounting conservatism. Contemporary Accounting Research, 32(3), 1285–1318. https://doi.org/10.1111/1911-3846.12098
Fryer, R. G. Jr., & Levitt, S. D. (2010). An empirical analysis of the gender gap in mathematics. American Economic Journal: Applied Economics, 2(2), 210–240. https://doi.org/10.1257/app.2.2.210
Geiler, P., & Renneboog, L. (2015). Are female top managers really paid less? Journal of Corporate Finance, 35, 345–369. https://doi.org/10.1016/j.jcorpfin.2015.08.010
Gow, I. D., Ormazabal, G., & Taylor, D. J. (2010). Correcting for cross-sectional and time-series dependence in accounting research. The Accounting Review, 85(2), 483–512. https://doi.org/10.2308/accr.2010.85.2.483
Grosvold, J., Rayton, B., & Brammer, S. (2016). Women on corporate boards. Business & Society, 55(8), 1157–1196. https://doi.org/10.1177/0007650315613980
Gupta, V. K., Mortal, S. C., & Guo, X. (2018). Revisiting the gender gap in CEO compensation: Replication and extension of Hill, Upadhyay, and Beekun's (2015) work on CEO gender pay gap. Strategic Management Journal, 39(7), 2036–2050. https://doi.org/10.1002/smj.2905
Guthrie, D., & Roth, L. M. (1999). The state, courts, and equal opportunities for female CEOs in U.S. organizations: Specifying institutional mechanisms. Social Forces, 78(2), 511–543. https://doi.org/10.2307/3005566
Hall, B. J., & Liebman, J. B. (1998). Are CEOs really paid like bureaucrats? The Quarterly Journal of Economics, 113(3), 653–691. https://doi.org/10.1162/003355398555702
Hambrick, D. C., Geletkanycz, M. A., & Fredrickson, J. W. (1993). Top executive commitment to the status quo: Some tests of its determinants. Strategic Management Journal, 14(6), 401–418. https://doi.org/10.1002/smj.4250140602
Haslam, S. A., & Ryan, M. K. (2005). The glass cliff: Evidence that women are over-represented in precarious leadership positions. British Journal of Management, 16, 81–90. https://doi.org/10.1111/j.1467-8551.2005.00433.x
Haslam, S. A., & Ryan, M. K. (2007). The glass cliff: Exploring the dynamics surrounding women's appointment to precarious leadership positions. Academy of Management Review, 32(2), 549–572. https://doi.org/10.5465/amr.2007.24351856
Haslam, S. A., & Ryan, M. K. (2008). The road to the glass cliff: Differences in the perceived suitability of men and women for leadership positions in succeeding and failing organizations. The Leadership Quarterly, 19(5), 530–546. https://doi.org/10.1016/j.leaqua.2008.07.011
Heilman, M. E. (1983). Sex bias in work settings: The lack of fit model. In B. M. Staw & L. L. Cummings (Eds.), Research in organizational behavior (Vol. 5) (pp. 269–298). JAI Press.
Heilman, M. E., & Okimoto, T. G. (2007). Why are women penalized for success at male tasks? The implied communality deficit. Journal of Applied Psychology, 92(1), 81–92. https://doi.org/10.1037/0021-9010.92.1.81
Hill, C. W. L., & Phan, P. (1991). CEO tenure as a determinant of CEO pay. Academy of Management Journal, 34(3), 707–717. https://doi.org/10.5465/256413
Hogan, T. D., & McPheters, L. R. (1980). Executive compensation: Performance versus personal characteristics. Southern Economic Journal, 46(4), 1060–1068.
Hyland M., Djankov, S., & Goldberg, P. K. (2019). Gendered laws. Retrieved online at: http://documents1.worldbank.org/curated/en/514981576015899984/pdf/Gendered-Laws.pdf, DOI: https://doi.org/10.1596/1813-9450-9080
Jensen, M. C., & Murphy, K. J. (1990). Performance pay and top-management incentives. The Journal of Political Economy, 98(2), 225–264. https://doi.org/10.1086/261677
John, K., Mehran, H., & Qian, Y. (2010). Outside monitoring and CEO compensation in the banking industry. Journal of Corporate Finance, 16(4), 383–399. https://doi.org/10.1016/j.jcorpfin.2010.01.001
Kai, L., & Prabhala, N. R. (2007). Self-selection models in corporate finance. In B. Espen Eckbo (Ed.), Handbook of empirical corporate finance (pp. 37–86). Elsevier. https://doi.org/10.1016/B978-0-444-53265-7.50016-0
Karolyi, G. A. (2016). The gravity of culture for finance. Journal of Corporate Finance, 41, 610–625. https://doi.org/10.1016/j.jcorpfin.2016.07.003
Keloharju, M., Knüpfer, S., & Tåg, J. (2016). Equal opportunity? Gender gaps in CEO appointments and executive pay. Working Paper. https://doi.org/10.2139/ssrn.2730207
Koenig, A. M., Eagly, A. H., Mitchell, A. A., & Ristikari, T. (2011). Are leader stereotypes masculine? A meta-analysis of three research paradigms. Psychological Bulletin, 137(4), 616–642. https://doi.org/10.1037/a0023557
Lam, K. C. K., McGuinness, P. B., & Vieito, J. P. (2013). CEO gender, executive compensation and firm performance in Chinese-listed enterprises. Pacific-Basin Finance Journal, 21(1), 1136–1159. https://doi.org/10.1016/j.pacfin.2012.08.006
Lam, S. S., & Dreher, G. E. (2004). Gender, extra-firm mobility, and compensation attainment in the United States and Hong Kong. Journal of Organizational Behavior, 25(7), 791–805. https://doi.org/10.1002/job.264
Latu, I. M., Mast, M. S., Lammers, J., & Bombari, D. (2013). Successful female leaders empower women's behavior in leadership tasks. Journal of Experimental Social Psychology, 49(3), 444–448. https://doi.org/10.1016/j.jesp.2013.01.003
Lublin, J., & Krouse, S. (2017). State Street to start voting against companies that don't have women directors. The Wall Street journal, Retrieved online at: https://www.wsj.com/articles/state-street-says-it-will-start-voting-against-companies-that-dont-have-women-directors-1488862863
McDonnell, M. H., & King, B. (2013). Keeping up appearances: Reputational threat and impression management after social movement boycotts. Administrative Science Quarterly, 58(3), 387–419. https://doi.org/10.1177/0001839213500032
Meyersson Milgrom, E. M., Petersen, T., & Snartland, V. (2001). Equal pay for equal work? Evidence from Sweden and a comparison with Norway and the U.S. Scandinavian Journal of Economics, 103, 559–583. https://doi.org/10.1111/1467-9442.00260
Moss-Racusin, C. A., Dovidio, J. F., Brescoll, V. L., Graham, M. J., & Handelsman, J. (2012). Science faculty's subtle gender biases favor male students. Proceedings of the National Academy of Sciences, 109(41), 16474–16479. https://doi.org/10.1073/pnas.1211286109
Nadler, C., & Breuer, W. (2019). Cultural finance as a research field: An evaluative survey. Journal of Business Economics, 89(2), 191–220. https://doi.org/10.1007/s11573-017-0888-y
Namwong, K., Jantarakolica, T., Suwannoi, T., & Wongkantarakorn, J. (2017). A gender gap in executive cash compensation in Thailand: A view of the expectancy theory. In Global corporate governance (Advances in financial economics) (Vol. 19) (pp. 147–166). Emerald Publishing Limited. https://doi.org/10.1108/S1569-373220160000019006
Nobes, C. W. (2009). Observations on measuring the differences between domestic accounting standards and IAS. Journal of Accounting and Public Policy, 28(2), 148–153. https://doi.org/10.1016/j.jaccpubpol.2009.01.003
Nyberg, A., Fulmer, I., Gerhart, B., & Carpenter, M. (2010). Agency theory revisited: CEO return and shareholder interest alignment. Academy of Management Journal, 53(5), 1029–1049. https://doi.org/10.5465/amj.2010.54533188
Oakley, J. G. (2000). Gender-based barriers to senior management positions: Understanding the scarcity of female CEOs. Journal of Business Ethics, 27(4), 321–334. https://doi.org/10.1023/A:1006226129868
Parboteeah, K. P., Hoegl, M., & Cullen, J. B. (2008). Managers' gender role attitudes: A country institutional profile approach. Journal of International Business Studies, 39(5), 795–813. https://doi.org/10.1057/palgrave.jibs.8400384
Petersen, M. A. (2009). Estimating standard errors in finance panel data sets: Comparing approaches. Review of Financial Studies, 22(1), 435–480. https://doi.org/10.1093/rfs/hhn053
Pingree, S. (1978). The effects of nonsexist television commercials and perceptions of reality on children's attitudes about women. Psychology of Women Quarterly, 2, 262–277. https://doi.org/10.1111/j.1471-6402.1978.tb00507.x
Powell, G. N., & Butterfield, D. A. (1979). The “good manager”: Masculine or androgynous? Academy of Management Journal, 22, 395–403. https://doi.org/10.5465/255597
Powell, G. N., & Butterfield, D. A. (1989). The “good manager”: Did androgyny fare better in the 1980s? Group and Organization Studies, 14(2), 216–233. https://doi.org/10.1177/105960118901400209
Powell, G. N., Butterfield, D. A., & Parent, J. D. (2002). Gender and managerial stereotypes: Have the times changed? Journal of Management, 28(2), 177–193. https://doi.org/10.1177/014920630202800203
Regan, D. T., Straus, E., & Fazio, R. (1974). Liking and the attribution process. Journal of Experimental Social Psychology, 10(4), 385–397. https://doi.org/10.1016/0022-1031(74)90034-1
Ridgeway, C. L., & Correll, S. J. (2004). Unpacking the gender system—A theoretical perspective on gender beliefs and social relations. Gender & Society, 18(4), 510–531. https://doi.org/10.1177/0891243204265269
Ritter-Hayashi, D., Vermeulen, P., & Knoben, J. (2019). Is this a man's world? The effect of gender diversity and gender equality on firm innovativeness. PLoS ONE, 14(9), 1–19. https://doi.org/10.1371/journal.pone.0222443
Roth, L. M. (2006). Selling women short: Gender and money on Wall Street. Princeton University Press.
Rubery, J., & Fagan, C. (1994). Equal pay policy and wage regulation systems in Europe. Industrial Relations Journal, 25, 281–292. https://doi.org/10.1111/j.1468-2338.1994.tb00712.x
Schein, V. E. (1973). Relationship between sex role stereotypes and requisite management characteristics. Journal of Applied Psychology, 57(2), 95–100. https://doi.org/10.1037/h0037128
Schein, V. E., Mueller, R., Lituchy, T., & Liu, J. (1996). Think manager-think male: A global phenomenon? Journal of Organizational Behavior, 17, 33–41. https://doi.org/10.1002/(SICI)1099-1379(199601)17:1<33::AID-JOB778>3.0.CO;2-F
Schwartz, S. H. (1994). Are there universal aspects in the structure and contents of human values? Journal of Social Issues, 50(4), 19–45. https://doi.org/10.1111/j.1540-4560.1994.tb01196.x
Schwartz, S. H. (1999). A theory of cultural values and some implications for work. Applied Psychology, 48, 23–47. https://doi.org/10.1111/j.1464-0597.1999.tb00047.x
Schwartz, S. H. (2004). Mapping and interpreting cultural differences around the world. V. Vinken, J. Soeters & P. Ester, Comparing cultures: Dimensions of culture in a comparative perspective (43–73). Brill.
Schwartz, S. H. (2008). The 7 Schwartz cultural value orientation scores for 80 countries. Retrieved from https://www.researchgate.net/publication/304715744_The_7_Schwartz_cultural_value_orientation_scores_for_80_countries
Serfling, M. A. (2014). CEO age and the riskiness of corporate policies. Journal of Corporate Finance, 25, 251–273. https://doi.org/10.1016/j.jcorpfin.2013.12.013
Smith, N., Smith, V., & Verne, M. (2011). The gender pay gap in top corporate jobs in Denmark. International Journal of Manpower, 32(2), 156–177. https://doi.org/10.1108/01437721111130189
Stuhlmacher, A. F., & Poitras, J. (2010). Gender and job role congruence: A field study of trust in labor mediators. Sex Roles, 65, 489–499. https://doi.org/10.1007/s11199-010-9844-9
Thompson, S. B. (2011). Simple formulas for standard errors that cluster by both firm and time. Journal of Financial Economics, 99(1), 1–10. https://doi.org/10.1016/j.jfineco.2010.08.016
Tosi, H. L., & Greckhamer, T. (2004). Culture and CEO compensation. Organization Science, 15(6), 617–734. https://doi.org/10.1287/orsc.1040.0099
Tosi, H. L., Werner, S., Katz, J. P., & Gomez-Mejia, L. R. (2016). How much does performance matter? A meta-analysis of CEO pay studies. Journal of Management, 26(2), 301–339. https://doi.org/10.1177/014920630002600207
Tozzo, S. G., & Golub, S. (1990). Playing nurse and playing cop: Do they change children's perceptions of sex-role stereotypes? Journal of Research in Childhood Education, 4, 123–129. https://doi.org/10.1080/02568549009594793
Triventi, M. (2013). The gender wage gap and its institutional context: A comparative analysis of European graduates. Work, Employment and Society, 27(4), 563–580. https://doi.org/10.1177/0950017012460322
Vella, F. (1994). Gender roles and human capital investment. Economica, 61(242), 191–211. https://doi.org/10.2307/2554957
Vracheva, V., & Stoyneva, I. (2020). Does gender equality bridge or buffer the entrepreneurship gender gap? A cross-country investigation. International Journal of Entrepreneurial Behavior & Research, 26(8), 1827–1844. https://doi.org/10.1108/IJEBR-03-2020-0144
Xiao, Z., He, R., Lin, Z., & Elkins, H. (2013). CEO compensation in China: Accounting performance, corporate governance, and the gender gap. Nankai Business Review International, 4(4), 309–328. https://doi.org/10.1108/NBRI-09-2013-0032