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Best-paid women in S&P 500 settle for less

Female chief executives make 18% less than men

NEW YORK — Even the few women who have managed to advance to the C-suite don’t get equal pay.

Last year, of the five best-paid executives at each of the Standard & Poor’s 500 Index companies, 198 were women, or 8 percent of the total. Those high-achievers on average earned $5.3 million, 18 percent less than men, data compiled by Bloomberg show.

Four decades after substantial numbers of women began entering management ranks, only a handful have reached the echelons that earn the biggest compensation. Even after graduating from the same business schools, women tend to start out at lower salaries than men and many don’t catch up later in their careers. Female executives say they can be less demanding than men when it comes to pay, partly out of fear of being labeled overly aggressive and self-centered.

“I was always focused on negotiating for my team but [was] never as good at negotiating for myself,” said Dawn Lepore, the former chief executive officer at and vice chairman of Charles Schwab.

“When I went to, I thought, ‘This is a great opportunity and rather than demand a lot upfront, I’m going to do a great job and then I’ll get rewarded,’ ” said Ms. Lepore, now a director at AOL and TJX Cos. Inc. “I didn’t want to be greedy or viewed as out for myself. Maybe women are more collaborative.”

Topping the compensation ranking of female executives, compiled from the five highest-paid executives listed in the proxies of each S&P 500 company for the year 2012 or its fiscal equivalent, were Safra Catz, Oracle’s chief financial officer, with $51.7 million, and Marissa Mayer of Yahoo, with $36.6 million. While both got higher compensation than some of their peers, their examples are more the exception than the rule.


Sheryl Sandberg, Chief Operating Officer Facebook, notes that women’s lack of sponsors in their workplaces keeps them from asking for both stretch assignments and raises.


Facebook Inc.’s chief operating officer, Sheryl Sandberg, who advises women in her best-selling book Lean In not to squelch their ambitions, notes that women’s lack of sponsors in their workplaces keeps them from asking for both stretch assignments and raises.

Women are such a rarity in top jobs — about 20 are S&P 500 chief executive officers — that they may not want to stand out more by being tough on pay, said Pat Cook, president of boutique executive search firm Cook & Co. in Bronxville, N.Y.

“Women tend to start out their careers getting paid less, and that gap often never gets made up, even at the most senior levels,” Ms. Cook said. “Plus women settle more frequently than men for what they’re offered.”

The scarcity of female CEOs explains in part the S&P 500 gender gap. The small pool brings the average compensation down among women in the C-suite because chief executives tend to command the highest pay, said Ilene Lang, president of Catalyst, a New York-based research and advocacy group for women executives.

Chief executives lag their male counterparts in certain industries. Take Denise Morrison, CEO of Camden, N.J.-based Campbell Soup: She received a total compensation of $8.76 million last year, 24 percent less than the average earned by CEOs at food, beverage, and tobacco companies, according to data compiled by Bloomberg. Heather Bresch, of pharmaceutical firm Mylan Inc., was paid $9.96 million, 33 percent less than the average chief of a pharmaceutical, biotechnology, and life sciences company.

“It is unfortunate that in many instances there is still a large pay gap between men and women in corporate executive positions,” said Maggie Wilderotter, 58, CEO of Frontier Communications Corp. since 2004 and a director at Procter & Gamble Co. and Xerox Corp. “I am hopeful that the use of outside compensation consultants by the compensation committees of public boards will make the gaps more evident and get inequalities addressed.”

Many factors contribute to pay levels, including performance, age, and experience. Both Ms. Morrison, 59, and Ms. Bresch, 44, are relatively new in their CEO jobs, since August, 2011, and January, 2012, respectively.

Last year, 50 female chief financial officers ranked among the five highest-paid executives in an S&P 500 company. The lowest-paid was Karen Burns, Nvidia Corp.’s interim chief financial officer since 2011; she received $841,517.

Kinder Morgan Inc. CFO Kimberly Dang, 43, has been in the job since 2005. Last year she received compensation of $1.72 million. Her Houston-based energy company had sales of $10 billion last year. By comparison, the average compensation of CFOs at five similar companies with sales ranging from $5 billion to $17 billion was $2.3 million.

Mary Winston, 51, became chief financial officer at Family Dollar Stores Inc. in April last year after four years as CFO of Giant Eagle, a closely held grocery chain with about $9 billion in sales. She got $1.1 million in compensation at Matthews, N.C.-based Family Dollar, which had revenue of $9.3 billion in 2012. For fiscal 2013, she will make an estimated $1.3 million if she hits her bonus target. The average CFO compensation at four discount retailers with sales ranging from $2.1 billion to $16 billion was $2.1 million last year, according to data from proxies.

Family Dollar, Kinder Morgan, Campbell, and Canonsburg, Penn.-based Mylan declined to comment.

“Women are more likely to advocate for opportunity for themselves than for money, even when they’ve accomplished so much,” said M.J. Tocci, director of the Heinz Negotiation Academy for Women at Carnegie Mellon University. “That’s not surprising given the backlash women can get when they seek higher pay. Even people who believe women deserve what they’re asking for often peg them as selfish and not likable, which isn’t the reaction men get when they demand more.”

Overall, women who work full time in the U.S. earned an average 77 cents for every dollar paid to men in 2011, according to U.S. Census Bureau data. The variance can be partly explained by differences in occupation, experience, and skill.

For women at the highest rungs of the corporate ladder, who were paid 82 cents for every dollar of their male counterparts in the S&P 500 last year, levels of experience and skill are more comparable with the men.

A 2010 study by Catalyst found that after controlling for career aspirations, parental status, years of experience, industry, and other variables, male graduates are more likely to be assigned jobs of higher rank and responsibility and earn, on average, $4,600 more than women in their first post-MBA jobs.

The study involved 9,927 graduates of business schools in the North America, Europe, and Asia.

Eliminating the pay gap may depend on women gaining a more equal share of senior executive jobs. No S&P 500 company listed more than three women among their five highest-paid executives last year. Four of them — Frontier Communications Corp., Aetna Inc., Avon Products Inc., and International Paper Co. — had three and 21 had two.

Oracle CFO Ms. Catz, the top S&P 500 female earner, makes more than many CEOs, including Steve Ballmer at Microsoft Corp., the data show.

Still, her compensation is about half that of the top male earner: Larry Ellison, her boss at software maker Oracle.

Carnegie Mellon’s Ms. Tocci encourages women at all levels to push for equal pay. “Women who accept less than what men get for the same jobs are lowering the bar for the women who come after them,” Ms. Tocci said.

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