A Gender Pay Gap—at the Very Top

Britain’s high-flying businesswomen remain underrepresented and underpaid at the very top of the corporate ladder, a new report finds. 

British women have come a long way in business, but even those taking the top CEO role are getting short-changed it seems—and by some signifcant sums.

The few women CEOs in the public companies that make up the FTSE 100 index of leading UK stocks get paid 23.5% less than their male counterparts, according to a recent report The High Pay Center, a the UK think tank. In 2022, the average pay for male FTSE 100 CEOs was £4.3 million ($5.2 million) versus £3.4 million for women. And there are only 11 such women in those top roles. 

One factor may where those 11 are working. Many female CEOs are not running the largest firms in their industry, raising a different gender gap issue, says Ben Frost, a senior client partner in Korn Ferry's Products business. “The size of your pay depends in large part on the size of your job,” he says. In all, there were nine FTSE 100 CEOs who are women. 

Experts say the data may also suggest that female chiefs are negotiating less aggressively than men. It comes down to a personality trait known as “agreeableness,” and the more agreeable a person is the less well they tend to negotiate, according to research from the American Psychological Association. That’s true of men and women, but women tend to be even more agreeable, at least according to the research. "It doesn't surprise me that the gender pay gap  so high even at CEO level, sadly," says Sally Talbot, a senior client partner in Korn Ferry's global HR practice. "In my experience, female candidates at the end of a search are less focused on their market worth than their male counterparts and don't always negotiate as hard."

"When the CEO's seat is there to be filled, the chances are that women have always been paid less," says Donna Herdsman, Korn Ferry’s head of diversity, equity and inclusion in EMEA. Herdsman also says: "If you are underrepresented, you are far more likely to find it hard to network, and it takes much longer."

Some companies are getting together to change the problem. Notably, in 2014 Britain’s top 80 employers in oil, gas, and electricity companies, put together an organization named Powerful Women. The organization publishes annual data on female executive and board director representation at its member companies. “It raises the awareness of the presence of women in the top roles,” says Anthony McNulty, a senior client partner in Korn Ferry’s Rewards practice.

Raising awareness does two things, McNulty says. First, it helps highlight that at least some of the companies in this traditionally male-dominated industry are now embracing women at the top of the corporate tree. In turn, that should encourage women to want to join the industry and build up the pipeline of candidates that may one day be CEO. “The pipeline is about getting more female representation,” he says. “You don’t become CEO overnight.”  He also adds that the public nature of the data published by Powerful Women likely helps foster some one-upmanship between the companies.

McNulty also points to the vast quantities of research that show when companies are run by a group of people with intellectually diverse views they tend to perform better financially and develop disruptive ways of doing business. “Why wouldn’t you have as wide a range of viewpoints as you can?” McNulty says. “It’s about innovation and growth, and having something different, like more women, is key to that goal.”


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