The Advisors' Blog

This blog features wisdom from respected compensation consultants and lawyers

February 28, 2022

Executive Pay: Pandemic Widens Gender Pay Gap

Emily blogged last fall that women execs are getting stuck at the median due to pay benchmarking practices. Morningstar is now out with data showing that the pandemic also widened the gender pay gap in the C-suite – a reversal of the narrowing that occurred from 2015 – 2019. A big reason for the disparity is that the largest equity grants have been going to men – another issue that Emily & the NASPP recently noted. Here are a few key takeaways from data expert Jackie Cook and her Morningstar team:

– Female C-suite pay as a percentage of pay earned by their male counterparts reached a record low for the nine-year period since 2012. On average in 2020, women with C-suite positions earned only $0.75 for every $1.00 earned by men at the top of the corporate ladder, down from $0.88 for every dollar in 2018. Median female pay for NEOs was 81% that of pay for male NEOs in 2020.

– Overall, S&P 500 C-suite pay rose by 24% from 2012 to 2020. However, this increase breaks down to a 27% increase for men in the C-suite, compared with 10% for women.

– While women made incremental inroads into corporate America’s C-suites, they’ll have to wait until at least 2060 to reach parity at the present rate of progress. The number of women holding NEO positions at S&P 500 companies increased by only 6 percentage points over the most recent nine years for which data is available (to 14% in 2020, up from 8% in 2012).

– Just over half of S&P 500 C-suites (56%) had at least one female NEO in 2020, up from one third (34%) in 2012. However, C-suites have been slow to advance a second female executive, as only 16% of C-suites had two or more female NEOs in 2020, up from 7% in 2012. And at the very top, progress is even slower: The number of woman-headed S&P 500 companies inched up to 5.5% from 4.3%.

The article notes that a shareholder resolution about internal pay equity received 40% support at Microsoft last fall – and a similar resolution is going to a vote at Apple this Friday.

Liz Dunshee