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Low expectations are still high hurdles for women execs, studies find

August 1, 2008

For more information, contact: Benjamin Haimowitz,

To the perennial pay gap between male and female managers new research now adds a startling twist: while male executives tend to be rewarded handsomely if their companies flourish, women executives see practically no bonus gains. 

A study to be presented at the forthcoming annual meeting of the Academy of Management in Anaheim, California, provides these estimates: When a badly lagging company ascends to a high level of financial performance, top male executives can expect an increase in their bonus checks of more than 260%; top women officers, in contrast, can expect a rise of about 4%.


The estimates emerge from pay patterns of 96 matched pairs of male and female British executives between 1998 and 2004, with controls for such major determinants of compensation as company size, stock-price volatility, industry differences, and executives' tenure and age.

"While 'performance-based pay' is an intrinsic part of any male executive's pay package, the term may be something of a misnomer when considering female executives," conclude the study's five authors, Clara Kulich, Grzegorz Trojanowski, Michelle Ryan, and Alexander Haslam of the University of Exeter in the U.K. and Luc Renneboog of Tilburg University in the Netherlands.


Noting that the bonuses of top women executives vary little whether their companies perform brilliantly or dismally, the authors add: "The fact that female executives are neither rewarded nor punished for their work can be seen as an indicator of a more generalized organizational apathy and indifference towards women...The indifference of organizations to women's achievements in the workplace may be the very antithesis of equality."

The low expectations that underlie this indifference can have adverse effects for women managers outside the office too, according to a second study to be presented at the Academy of Management meeting. Drawing on a sample of more than 450 golf courses in the United States, the research reveals an uncanny link between the placement of tee boxes for men and women and the success of women in sales, management, and marketing.

On average, women's tee boxes are about 50 yards closer to the hole than men's. The greater the distance between tee boxes, the study finds, the fewer women will there be in management and marketing in that geographic locale and the less money will those women make.


"If on average the women's tees are far away from the men's tees, this may portray a negative belief about the golfing abilities of women -- and perhaps by extension negative beliefs about other abilities," write the study's authors Michelle M. Arthur, Robert Del Campo, and Harry J. Van Buren III of the University of New Mexico. Even though "overt barriers to women's advancement," have receded, the professors conclude, "we are left with more subtle barriers like different golf tee placements."


To which Exeter University's Ms. Kulich adds: "The blame for gender-biased disparities evident in both these studies has to be seen as part of a complex system of interacting factors holding women back, prominent among which are low expectations for women. That these remain entrenched more than forty years after women entered the ranks of management in force is a sobering prospect."



For women top execs, company performance makes little difference in bonuses


The study, entitled "Who Gets the Carrot and Who Gets the Stick? Evidence of 'Gender Disparities in Executive Remuneration," derives its findings from an analysis of British companies' bonus payments over a seven-year period to executive directors -- that is top company executives who serve on the firms' boards of directors. Female executives of 96 companies were matched with male execs who performed analogous functions in firms of about equal size in a similar industry. The researchers analyzed the relationship between companies' financial performance (in terms of return on assets combined with a stock-price-related measure) and the  bonuses received by the executives in question during the following year.


Ms. Kulich and her colleagues found the median total remuneration of male executives to be 19% greater than that of their female counterparts, an unsurprising result. Far more striking were the gender differences in what the researchers call "bonus sensitivity," the degree to which the executives' bonuses reflected companies' financial performance. As the study's authors put it, "the sensitivity for male executives is strongly positive whereas the one for female executives is virtually zero."


Specifically, as a company moves "from the lowest to the highest decile of [financial] performance, the expected bonus for male [executive] directors rises by 263% [while] the corresponding increase for a female director is a mere 4%...The male executive director's bonus [rises] from 15.1% to 59.8% of his base salary, while for females the corresponding increase in bonus is approximately one third (from 28.1% to 37.2% of her base salary). Put differently, the relative increase in men's bonuses as a function of improvement in company performance is approximately nine times larger than women's increase."


In seeking to account for these anomalies, the authors observe that "women are atypical leaders and...may be regarded as not fully responsible for the company results because they are perceived to lack traits such as managerial competence and the ability to influence. As such, the lack of association between company performance and the financial evaluation of female [executive] directors may reflect a broader negligence of women's leadership abilities."


While conceding that women executives tend to receive higher bonuses than male colleagues at poorly performing companies, the authors contend that, "even if these findings were construed positively in the sense that women are not penalized in the context of negative corporate performance, it also means that they miss out when their company that is doing well.This loss can be quite sizable."


In conclusion, however, Ms. Kulich and her colleagues submit that "the organizational insensitivity to women leaders' performance is not merely an issue of financial inequality. It can also be regarded as a lack of respect for women leaders by communicating and promoting the view that female executives lack agency and impact in the workplace. As long as this agency is denied, the experiences of women who break through the glass ceiling are likely to prove highly unsatisfactory for them." 

Long distances between men's and women's golf tees spell trouble for female marketers, managers

The study, entitled "The Impact of Gender-Differentiated Golf Course Structures on Women's Networking Abilities," is based on data from 455 U.S. golf courses and locales across 50 states, each course being matched to a specific census locale. A Web site that randomly produces names and information about golf courses provided the distances between the men's and women's starting tees for each hole, permitting the researchers to calculate the average such distance for each course. Obtaining workforce and earnings data in the relevant locales from publicly available sources, they focused particularly on three occupations in which networking is a crucial activity -- general management; sales and related occupations; and marketing and sales management.


The University of New Mexico professors found greater distances between tee boxes to be significantly associated with lower participation of women in marketing and sales management and marginally associated with lower participation of women in general management. Greater distances were linked as well to lower female participation in sales, although the results here were not statistically significant.


The professors also found greater distances between tee boxes to be strongly or significantly associated with lower female earnings in all three occupations. Greater distances were strongly associated, too, with lower earnings by women relative to men in marketing and sales management and were marginally associated with lower earnings relative to men in general management. 

What accounts for these patterns? The authors offer two explanations.


The first has to do with golf's role as a networking activity par excellence."To the extent that the tees are situated far apart," the professors write, "it becomes more likely that [men and women] will golf in separate carts. If so, women are excluded from prime networking opportunities that take place during the idle time spent in the cart and waiting at the starting tee boxes to tee off."


The second has to do with the political and cultural beliefs implicated in placing tee boxes far apart -- what it says about regional values and mores. Greater distances, they write, "may portray a negative belief about the golfing abilities of women -- and perhaps by extension negative beliefs about other abilities. Significant differences in tee placements between men and women may reinforce biases against women, not just in physical terms but also intellectual terms."



Academy of Management Annual Meeting


The presentations will be among several thousand research reports at the Academy of Management meeting, to be held in Anaheim, California from August 10th to 13th.  Founded in 1936, the Academy is the largest organization in the world devoted to management research and teaching. It has more than 18,000 members in 92 countries, including more than 10,000 in the United States. This year's annual meeting will draw more than 9,000 scholars and practitioners for sessions on a host of subjects relating to business strategy, corporate organization and investment, the workplace, technology development, and other management-related topics.

Media Coverage:
Financial Times. Women Still Behind in the Boardroom. (Tuesday, August 26, 2008).
ForbesLife Executive Woman. The Highest-Paid Women in Corporate America. (Thursday, September 11, 2008).
HR Magazine. Male, Female Executives' Bonuses Uneven. (Wednesday, October 01, 2008).
The Globe & Mail. One More Gap in Pay Between Men and Women. (Friday, August 15, 2008).
The Observer. In Tarzan vs. Jane, Tarzan gets the bigger bonus. (Sunday, September 14, 2008).

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