It’s not surprising to learn that female CFOs earn less money than their male counterparts. But the difference, a new study suggests, may be mostly illusory.
PayScale, an online service that provides comparative compensation data for hundreds of job titles based on millions of profiles contributed by users of the service, recently analyzed its database by gender. The analysis included 1,870 CFOs – 68% male, 32% female – who provided data over the past year and indicated their gender.
The analysis showed that the median annual cash compensation was $138,000 for male finance chiefs and $95,400 for women – a 45 percent difference. If the raw numbers seem low, it’s because most of the CFOs were employed by small and midsized companies. “CFOs and CEOs from very large companies don’t tend to come to a site like ours,” says Katie Bardaro, chief economist for PayScale. “There is no need for them to benchmark their pay, because it is all out there – everyone knows what executives at that level make.”
In fact, the average female CFO in the study worked at a smaller company than the average man. That was just one of many variables that contributed to the men’s higher earnings.
Indeed, after controlling for company size, budget, industry and location, plus each person’s management responsibilities (like number of people supervised and tasks performed), length of experience in the role, educational degrees and certifications, PayScale found that the pay differential between the genders shrunk to 14 percent. “That shows there’s something else going on other than what we controlled for that is driving a pay gap,” Bardaro says.
She adds, “Broad comparisons of pay by gender are not quite fair, because they don’t get at the real question, which is: why are men and women different? Why do women go into [such lower-paying fields as] health care and education more than men? Why do women work at smaller companies? Those questions are beyond the scope of our analysis, but we wanted to get the ball rolling on a conversation about that.”
It may be reasonable to speculate that at least some of the remaining 14 percent difference after controlling for the mentioned variables has to do with gender bias. But such bias may also influence the degree of impact those variables have on the raw, uncontrolled differential.
For example, perhaps women CFOs tend to be found at smaller companies because they are offered fewer opportunities at larger ones. Or they may have less experience as a CFO because they were unfairly denied the opportunity until later in their careers.
For her part, Bardaro says such tendencies “may be a sign of gender bias, but it also may be a sign of inherent differences between men’s and women’s employment choices. For example, women may have less experience because they take a few years off to start a family, and maybe they like to work in health care because it allows more flexibility in their schedules.”
Meanwhile, the same trend was evident among controllers but was less pronounced. Median total cash compensation for male controllers was $84,200, 19% higher than the $70,800 women earned. After controlling for the variables, the differential was 9 percent.
Across the study, for almost all types of jobs, the size of the gender pay gap between men and women was greatest at the highest-level jobs. The opposite was also true: among accounts-payable managers, for example, women earned only 6% less than men – and, strangely, did slightly worse (7% less) after controlling for variables.
The study also turned on its head the common assumption that one reason women earn less than men is because they are less aggressive about pushing for higher pay. The study found virtually no difference in the number of men and women who said they had successfully negotiated at least one pay increase or benefits enhancement beyond what their employers initially offered. Among financial managers, men did have a slight edge in that regard: 60 percent said they had done so, compared with 56 percent of women.