05 September 2014

Female CEOWomen who break the glass ceiling and obtain executive positions earn $200,000 a year less than executive men, new research from the University of South Australia reveals.

As Australia today marks Equal Pay Day, Dr Yoshio Yanadori from the Centre for Human Resource Management says women have a long way to go in catching up to men when it comes to financial reward in the workplace.

Equal Pay Day marks the period of extra days in the current year which women need to work to achieve the same wages that men earned during the previous financial year.

Dr Yanadori says at the labour market level in Australia, female workers earn 18.2 per cent less than male workers.

“In fact, we’ve known for about 20 years that the gender pay gap sits around 15 to 18 per cent across the workforce,” he says.

“But what we don’t know much about is the gender pay gap in Australia at executive level – until now. A US study reported that mean total pay for female executives was 53 per cent of male executives for 1992 to 2006. We investigated whether there is a similar pay gap at executive level in Australia.”

Dr Yanadori’s research found that, in 2011, the average total pay for female executives was $689,766 – significantly lower than the average base pay for male executives of $884,175.

Dr Yanadori says the glass ceiling – a term to describe the difficulties women face in obtaining executive positions – is part of the reason for the gender pay gap in the labour market.

“Even after women break the glass ceiling and obtain executive positions, there is a statistically significant gender pay gap,” he says.

Part of the reason for this pay gap is that females are likely to hold relatively less important positions, he says.

“In our sample, women hold 8.5 per cent of executive positions,” he says.

“However, the proportion of females with the two most highly paid executive job titles remains very low, with just two per cent of Chief Executive Officers being women, and six per cent of Managing Directors.

“Thus, even when women successfully break the glass ceiling, many of them are not in ‘top’ executive positions.”

Even after controlling for the difference in positions and other factors such as the length of tenure and industry, there is still a statistically significant gender pay gap. Female executives earn 85.6 per cent of the total pay their male counterparts earn.

Dr Yanadori says female executives are likely to stay in their organisations despite underpayment, so firms have limited motivation to address the pay gap.

Other reasons include women’s reluctance to negotiate and men’s access to comparative salary information through high quality networks.

“The next step is to identify factors that reduce the pay gap,” he says.

“We want to find when firms pay male executives and female executives equitably. Such knowledge helps Australian firms and policy makers address the problem to achieve gender equity.”   

Dr Yanadori is the lead author of the paper ‘A fair go? The gender pay gap at the executive level in Australia’. He presented key findings of the paper – co-authored by Centre for Human Resource Management Director Professor Carol Kulik and PhD student Jill Gould – at the Academy of Management annual meeting in Philadelphia in the United States last month. The Academy of Management is the largest conference gathering of management scholars in the world to discuss pre-publication research.

Dr Yanadori’s paper won the Gender and Diversity in Organisations Faculty Transnational Research Best Paper Award at the Academy of Management meeting.

Media contact: Kelly Stone office 8302 0963 mobile 0417 861 832 email Kelly.stone@unisa.edu.au

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