The Significance of Gender in Explaining Senior Executive Pay Variations: An Exploratory Study

A Summary Report of Renner, Rives and Bowlin’s “The Significance of Gender in Explaining Senior Executive Pay Variations: An Exploratory Study”

Introduction

Although there are many laws in effect that directly relate to and address discrimination in the workplace, unfortunately, discrimination still exists and is a major concern. One discrimination issue that is being addressed on separate levels is the gap in gender pay. Gender pay discrimination has been researched and investigated for many years; however the research has come up short in terms of providing any resolutions. The purpose of this study was to address the question of differential pay levels among male and female senior executives and find explanations for the variations. There are several determinants that are considered by the authors, which are discussed in the study. The authors’ methodology of the study was two models, one model would analyze the determinants of the executive’s annual compensation and the other model would examine the determinants of the executive’s total compensation (annual plus long-term); this research would help to provide specifications of the earning equations (Renner, Rives, & Bowlin, 2002).

Does the research measure anything useful?

Past research has attempted to unravel the factors that might account for the gap in gender pay (Renner, et al., 2002). In a previous research conducted which included data from Bureau of Labor statistics, it was shown that the female to male ratio of median weekly earnings of full-time employees increased by 9.8% from 1979 to 1991 (Renner, et al., 2002). Researchers have reported that the decline in this ratio may be attributed to the occupational distribution of women and men and differences in their age-experience profiles (Renner, et al., 2002). One researcher examined five industries and found that gender pay gap differences were due to occupation (Renner, et al., 2002); however, the authors in this study examined only the occupation of executives, namely those in the top-five paid positions.

Research has also been done on female and male Chief Executive Officers (CEOs), but there were only two female CEOs in the top 500 companies when the study was done (Renner, et al., 2002). This study focuses on the top paid executives who make up the Top Management Team (TMT) and the alignment that compensation has with CEOs where corporate performance and size are the determinants (Renner, et al., 2002). The authors were looking to determine whether gender alone would explain gender pay differentials.

What should be made of the statistics reported in the study?

The authors used data collected from companies that had women in the five top-paid executive positions and companies