Underpayment and greater risk for dismissal of female CEOs

It's been said a lot that there are too few female CEOs, but sometimes women have good reasons not to become a CEO. Because there is still some evidence that female CEOs are underpaid and the chances of getting fired are much higher than for male CEOs.

Female and male CEOs have very similar backgrounds. They have almost the same age, life in the same area as the headquarters of the company, have few international experience and reached rarely the combi-function CEO and president. But there are still some differences between the two genders. The biggest difference is the remuneration. Female CEOs are still underpaid compared to their male colleagues. This gap still remains, although it is getting smaller slowly. Female CEOs only earned 80 cent per dollar compared to the male CEOs, this is evidenced out of a research of the American Ministry of Labour. A wage survey of The Wall Street Journal did research to the remuneration of 300 CEOs of listed companies. The result was that only 8 out of the 14 female CEOs had a wage above the median. The wage of the 6 other female CEOs was below the median.

The reason of this gap is due to a negotiation gap between women and men. Women are afraid to ask what they want, “Nice girls don’t negotiate”. This gender bias will also be there in the negotiation phase and this creates some psychological barriers. There is a social stigma against women who ask for more. Women are expected to be nice, sweet and kind. But when they ask for more remuneration or better circumstances in the negotiation phase, they will be seen as the unfriendly and rude person.

Next to the fact of the underpayment of the female CEOs, there are still more chances of getting fired. Because women get riskier responsibilities as a CEO and have thus more chances of failing. Studies of Europe and US show that female stick only half the time in the CEO position than men and that female CEOs have 50% more changes to get fired.

17% of the Belgian listed companies have one or more females in the board of directors, which should be 30% at the end of next year. Still, Europe wants to put the target at 40% by 2020, the magic year in which Europe hopes that everything will change. The Belgian female CEOs in the listed companies give, let’s say, a distorted picture. There are only 136 listed companies in Belgium while there are almost 90.000 firms in Belgium. It wouldn’t be bad for every company, both listed and non-listed firms, to have at least one woman in the board of directors.

Our hopes are up that there are quite some changes coming and people will pay more attention to competences, team spirit, ethical issues and sustainability. And the good news is that everybody assumes that women are better at these soft skills than men will ever be.

So, at this end, we can only hope that female CEOs will rock the world some day!

“The less important fact about me, is the fact that I am a woman.”