Inequality in Executive Compensation

Abstract: Gender parity in business has been on the agenda for almost 40 years but still we see significant differences. Trying to contribute to the discussion of why that could be, this project has looked at which factors that drive male respective female CEO compensation in the S&P 500 companies. Differences in the incitements at that level could help clarify the psychological effects behind gender inequality in business. To do this, data has been collected from Eikon and Orbis. A data set with 505 companies and for a start 23 regressors. Then a multiple regression analysis has been made over the data sets with male respective female led companies. From the final models the contribution of the variables has been calculated. The report shows that there are indeed differences between what drives the CEO compensation. The compensation for female CEOs is far more focused on financial performance measurements. Meanwhile the compensation for male CEOs is highly affected by their performance in ESG social. Why could that be? Another interesting finding is that the ESG environment variable is neglected in both models. We encourage other researchers to find out why this is, the consequences and how this could be used to decrease the gender gap.