We all know that anything new, different or seen as an outlier makes news. So it wasn’t all that surprising when Carol Bartz, Chief Executive Officer of Yahoo!, made headlines in a recent Bloomberg News article that reported she took home a $47.2 million compensation package. But what is interesting were the conclusions drawn from such news: That the glass ceiling that holds women back in Corporate America has been “shattered.”
Not so fast. When you dig deeper and go behind the headlines, the real issue remains the same as it has been since women entered the workforce: in the C-Suite, the average compensation of all women is still below that of their male peers. In other words – the pay gap has not disappeared. And, below the C-Suite, even though working women tend to be more educated, on average, than working men, women who work full time still only earn about 77 cents for every dollar that men earn annually, according to the Institute for Women’s Policy Research.
Why should women be treated any differently when they are tapped to do the same job as a man? Sure, it’s newsy and provocative to single out a relatively small number of women who are whisked into a company to solve a problem, negotiate attractive compensation packages that the board deems appropriate for her services, and then say “the glass ceiling has been shattered.” But a few examples do not make a trend – especially when the overwhelming evidence of women being underpaid still prevails.
Nonetheless, we find the Bloomberg article to be encouraging news. According to some numbers they reported, “16 women heading companies in the Standard & Poor’s 500 Index average earnings of $14.2 million in their last fiscal years, 43 percent more than the male average.” And, “the women who were also CEOs in 2008 received a 19 percent raise in 2009 – while the men took a 5 percent cut.” This is progress for women. And we would suggest that the pay cut on average for men was most likely justified, given the downfall of the male-led companies that were in the headlines – Bear Stearns, AIG, Lehman Brothers, Merrill Lynch, Bank of America, Washington Mutual, Countrywide, Fannie Mae, Freddie Mac, Citigroup, to name a few. These financial institutions created a crisis and caused a loss of over $7 trillion in market cap by year-end 2008. CEOs of these, and other companies, should receive less in compensation.
If Carol Bartz and other women-led companies destroy the stock value of their companies, become reckless leaders, or are asleep at the wheel, then they too should be treated like their male peers – be fired or at least have their pay slashed dramatically.
The bottom line is that boards need to pay for performance regardless of gender. That means it is just as bad to pay women too much as it is to pay too little!
Janice Reals Ellig is Co-CEO of Chadick Ellig, an executive recruitment firm.