• FWX June qtr  0.9% (72.2pts)
  • FWX y-o-y change  -1% (72.2pts)
  • Total timeframe to Financial Gender Equality  101
  • Timeframe to Equality on Employment  31 years
  • Timeframe to Equality on Underemployment  16 years
  • Timeframe to Equality on Gender Pay Gap  21 years
  • Timeframe to Equality on Unpaid Work  101 years
  • Timeframe to Equality on Women On Boards  7 years
  • Timeframe to Equality on Superannuation  40 years
  • Gender Pay Gap  0.8pts (14.2%)
  • Gender Pay Gap sub-index  -1%
  • Employment sub-index  -2% (71%)
  • Superannuation sub-index  69%
  • Gender Gap Superannuation  31%
  • Underemployment Rate sub-index  8%
  • Education sub-index  92%
  • ASX 200 Women On Boards sub-index  67%
  • ASX 200 Women On Boards  0.1pts (33.5%)
  • Unpaid Work sub-index  65%

Female executives earning 35% less than men in Australia

female executive
Financy
August 19, 2021

Confronting new research from the University of South Australia shows that most Australian companies are paying their female executives up to 35% less than their male counterparts, despite being of equal calibre, education, and achievement.

In a world first, the UniSA study, which assessed 539 Australian listed companies across 10 years of data, found that businesses that are not compensating men and women equally, and are also effectively self-sabotaging their diversity efforts and profit performance.

“It might surprise people that gender pay gaps exist at very senior levels, but with senior performance criteria often vague and subjective – and gender stereotypes still rife – the resulting imbalance* is commonplace,” says UniSA researcher, Professor Carol Kulik.

“We hear a lot about the benefits of women in executive levels. They provide different views and perspectives, reduce risks, improve decision-making, and promote performance, but if a firm has a large gender pay gap, promoting women to the top team will neither deliver benefits for the individual nor the organisation.

“Our research shows that gender pay disparities in top management teams negatively moderate the relationship between the women’s representation and subsequent firm performance.

“In dollar figures, if a male executive is paid 2.6 times that of their female counterpart, every woman added to the team will lower the firm’s annual return on assets by 2.2 per cent.

“The cause, we suspect, is that underpaying women sends a powerful signal that the organisation has low expectations about women’s contributions – that women executives have a lower status and less influence than their male counterparts.

“Women executives are then less forthright with their views; and men are more likely to discount their female colleagues’ opinions.

“Ultimately, a gender pay gap reduces the extent to which women’s voices can influence the executive’s actions and decisions, so the firm gets no value from the diversity within the team.”

The study controlled for executive quality, ensuring comparable education, executive role, tenure, and board memberships, to ensure women were not being discounted because they had less to contribute.

Co-researchers, Dr Yoshio Yanadori and Dr Jill Gould say that the research is a warning for organisations that are driving gender diversity initiatives.

“Organisations pay a price for gender inequality,” Dr Yanadori says.

“Just because an organisation has a good representation of women at the top doesn’t mean that they are a gender equal firm. Women’s representation is only one indicator.

“Stakeholders must dig deeper to establish whether the organisation is best positioned to use its visible gender diversity effectively.

“Gender diversity must be matched with equal pay. If organisations have women in senior leadership roles but pay them less than their male counterparts, they’re simply shooting themselves in the foot.”

 

Join the Financy social communities that support achieving fearless economic equality on LinkedIn and Facebook or follow our official pages on LinkedInFacebookInstagram and Twitter.

 

Financy's Membership kicks off Sept 27.

Related Stories

Tags: 

Share on facebook
Share on twitter
Share on linkedin
Share on email

Leave us A Comment

Financy
August 19, 2021
Share on facebook
Share on twitter
Share on linkedin
Share on email
Proudly Supported by

Become a fearless supporter of women’s financial progress. With your help, we can close the gap.

Register Financy
Membership