The Gender Gap Among Top Business Executives

Pay inequality and gender dynamics in top executive positions

“…Taken together, our findings complement the existing quasi‐experimental evidence about gender differences in exit rates from competitive contexts (Buser & Yuan 2019; Hogarth et al, 2012). We also expand the corporate governance debates on the relationship between gender and transitions in and out of executive positions and on the organizational characteristics that can ease the retention of female executives (Keller et al, 2020). An indirect implication of our results is that, by reducing the number of women in the pool of executives, a larger pay disparity may increase disproportionally the likelihood of men getting promoted to higher positions, which would in turn reinforce the underrepresentation of women in the apex of the corporate ladder.…”

“…Keller et al (2020) recently document that, as compared with men, women have not only a higher rate of entry into top executive teams (which is expected, given the increase in the proportion of female executives over time) but also a higher exit rate, especially when the firm does not have a female‐friendly corporate culture. Studying the determinants of female executives' exit is thus important to understand the antecedents of the low presence of women in top executive positions (Keller et al, 2020). Our contribution to this literature has been to empirically study the gender differences in top executives' exit as a function of the inequality in executives' pay packages.…”

“…Existing studies have argued that women are generally less likely to leave the firm when there are other women employed at the same job level (e.g., Elvira & Cohen, 2001). Keller et al (2020) find lower exit rates for women executives who work at more female‐friendly firms (as proxied by having had a female CEO in the past) 4 . Moreover, as anticipated above, there is evidence of gender spillovers according to which women help other women climb the corporate ladder (Matsa & Miller, 2011).…”

“…Unfortunately, the bulk of this literature has dealt almost exclusively with the entry and promotion of women into top corporate positions (e.g., Bonet et al, 2020;Cook & Glass, 2014;Smith et al, 2013). With few exceptions (Gayle et al, 2012;Keller et al, 2020), the determinants of female executives' exit from their corporate positions remain largely unexplored. Our arguments in the next section suggest the existence of gender differences in the relationship between pay inequality and executives' exit.…”

“…Some works in this area suggest that (conditional on entering competition) women tend to leave tournament contests earlier than men (Buser & Yuan, 2019; Hogarth et al, 2012). This dynamic seems to be present also in the context of large businesses, in which female executives have been shown to be more likely than male executives to both enter and exit the firm (Gayle et al, 2012; Keller et al, 2020).…”