Top Gals and the Gap

by Paige Churchman (New York City)

With all the other news from the financial world, you might have missed this – both Fortune and Forbes have recently published their top-paid lists of businesswomen. Fortune’s is a sub list of its annual 50 Most Powerful Women in Business, published just last week, three weeks after Forbes named its 100 Highest-Paid Women In Corporate America and about a month after the Census released its 2007 figures on the U.S. wage gap between men and women.

Fortune vs. Forbes

The two lists are surprisingly different. While lists like this are eye-grabbing, we should remember they’re both art and science. For example, the highest-paid businesswoman in America makes either $39 million or $120 million, depending on which publication you’re reading. Fortune has Sharilyn Gasaway (Alltel, $38.6 million) on top, but she doesn’t appear anywhere in the Forbes list of 100. At the top of the Forbes lineup is Meg Whitman (eBay, $120.4 million), but Whitman doesn’t surface on the Fortune lineup until eleventh place, with $11.9 million. The $100 million in cash she got as part her exit deal from eBay in 2008 only partially explains the discrepancy. The numbers for most of the women who appear on both lists don’t match, though Fortune and Forbes say they include the whole shebang: base salary, bonus, stock options, etc. That Fortune and Forbes are compiling lists of top women says something. Women have become a real force in Corporate America. But in those corner offices of the biggest earners, the difference between how men and women are valued isn’t a gap, it’s the Grand Canyon.

The Wage Gap

The national average for women in all professions is nearly 78 cents to the dollar of men. That’s the closest women have ever come to matching the male dollar. It’s up from 77 cents last year and 74 cents ten years ago, a far sight better than in the sixties and seventies when the number had a tough time breaking 59 cents. (Women’s Earnings as a Percentage of Men’s, 1951-2007) Even with her one-time million-dollar package, Ms. Whitman makes not quite 63 cents to the highest-paid male executive’s dollar. (The top-paid male executive was Oracle’s Larry Ellison, who made $193 million in 2007.) Sharilyn Gasaway makes 20 cents to his dollar. Forbes’s top ten men made no less than $72 million, compared with its top ten women’s $12 million─17 to 20 cents to the dollar of the top ten men.

The War of Why: Choice vs. Discrimination

For those that actually believe the wage gap exists, there is still a loud public debate as to why it does. Some say that men are paid more because they’re willing to take more dangerous jobs and to risk more, while women willingly trade off the bigger bucks for time and flexibility to give them space to raise families. For more on this line of thought, read the Independent Women’s Forum’s “Gender Wage Gap Is Feminist Fiction” or John Stossel’s “Is the Wage Gap Women’s Choice?” Or try any of the oft-cited Dr. Warren Farrell’s writings, like his article 11 Top Tips on How Women Can Earn More, adapted from his book Why Men Earn More.Others believe the gap stems not from choice but from discrimination, that women make less because of deep-seated attitudes ingrained in pay systems, hiring, education, and the like. There have been some fascinating findings in recent studies:

• The Mommy Penalty. Women with children earn less (about 6 percent) than women without kids, even when productivity is taken into account.
• Same Person, New Gender. Kristen Schilt and Matthew Wiswall studied transgender people in the workplace and found that average earnings for women who morphed to male went up slightly, but men’s average earnings fell by nearly a third when they became female. Male-to-female workers also felt a loss of authority and were harassed, some even fired. The women who became male, however, enjoyed more respect and authority.
• Mindset and Money. Timothy Judge and Beth Livingston found that men with traditional mindsets (they believe that women belong in the home) earned on average $11,930 a year more for doing the same kind of work as men who held more egalitarian views. Women with those traditional views, however, make slightly less than women with egalitarian beliefs and $14,404 less than men with old-world views.
• Where Women Out-Earn Men. “Women tend to excel whenever a field requires technical skills plus the ability to communicate and pay attention to details,” says Warren Farrell (the only man to be elected to the NOW board three times). Women sales engineers, statisticians and legislators out-earn men doing the same jobs by at least 133%. There are also a few countries, like Bahrain for example, where women out-earn men by 140%.
• Global Gap. Worldwide, women make 84 cents to men’s dollar. Women in Europe, Oceania and Latin America do better than women in Asia and Africa, and as education increases, so does the gap. See The

More Good-Bye Girls

Missing from both lists are some familiar names. Last year, Zoe Cruz topped Fortune’s list at $30 million. Once thought to be in line for CEO of Morgan Stanley, she was suddenly fired by her long-time mentor. Also missing are Erin Callan (ex-Lehman CFO who now heads CreditSuisse’s global hedge funds business) and VMWare’s ex-CEO Diane Greene.Then there’s Sallie Krawcheck, ranked 16 by Fortune and 24 by Forbes. She was Citigroup’s most senior woman and CEO of its Global Wealth Management business, but last week she announced her resignation. Sallie, who had been known as the survivor among the women on Wall Street, apparently clashed with CEO Vikram Pandit about how much to reimburse clients for faulty investments. He demoted her, she walked.

But There’s Hope

Never before have there been so many executive women or so many women in politics, medicine and law. And never before have women been so well educated, earned so much money and had the freedoms that accompany it. Maybe the reshaping of the financial markets isn’t all darkness but a shifting to restore some kind of balance, to narrow the gap between genders, races, the haves and have-nots, that which can be measured and that which cannot.