S&P Global finds that closing the median wage gap has been a net disadvantage for women

Rhea-AI Summary

S&P Global (NYSE: SPGI) has released a pioneering research report titled "Glass Floors and Ceilings: Why Closing the Median Wage Gap Isn't Fair". This report examines the gender wage gap over 15 years, highlighting that women in executive roles often receive compensation clustered around the median, which can hinder pay equity. Key findings include a steady rise in women’s median pay ratio contrasted by a decline in mean pay, and evidence of Gender-Based Compensation Management in firms with governance issues. The report aims to prompt companies to adopt a broader perspective in addressing pay equity.

Positive

• Increased women's median pay ratio over 15 years, indicating some progress.
• Report highlights the importance of addressing wage gaps comprehensively, contributing to the conversation about pay equity.

Negative

• Mean pay ratio for women has been declining, suggesting a potential setback in overall pay equity.
• Practices of Gender-Based Compensation Management observed in firms facing legal issues, which could indicate poor governance and mismanagement.

NEW YORK, Oct. 27, 2021 /PRNewswire/ -- S&P Global (NYSE: SPGI) today released a first-of-its-kind research report analyzing the gender wage gap and its evolution over the last 15 years. The new report, "Glass Floors and Ceilings: Why Closing the Median Wage Gap Isn't Fair," found that compared to men, women in executive roles are more likely to receive compensation in a compressed range around the median of their peer group (Figure 1). Firms have been focused on median compensation, but because the high end of the compensation range can be much farther from the median than the low end, the result has been a net disadvantage for women's pay equity.

"In their push to address pay equity, companies have focused on one statistic – median pay – while losing sight of the larger picture. This suggests that companies are focused on the optics of the problem, rather than solving the problem," said Daniel J. Sandberg, Senior Director of Quantamental Research at S&P Global Market Intelligence, who authored the report. "We hope this research sheds light on a worrisome trend and helps firms reevaluate their approach to closing the gender pay gap."

Other key findings of the report include:

• Although women's median pay ratio has been steadily increasing over the 15-year study period, the mean pay ratio has been declining over most of the study period. This suggests that measures of central tendency, used in many other studies, may be producing misleading conclusions by oversimplifying the gender wage gap problem to a single data point (Figure 2).
• Firms that have been defendants in federal court cases involving compensation disputes, discrimination, fraud, or other governance-related affairs exhibit more pronounced Gender-Based Compensation Management (GBCM). The practice of GBCM artificially addresses the gender pay gap by increasing the median woman's compensation without providing women equal access to the full range of compensation. The findings suggest GBCM is associated with poor governance.
• The percentage of women holding positions across the C-suite, board of directors, and executive positions grew from 15.4% to 19.2% from 2018 to 2020. While this progress is statistically meaningful, at this rate women have at least one to two more decades before they reach parity in their representation across senior roles. In positions where women's progress has been slower, such as CEO, parity will likely take even longer.

"This report, along with our previous research around the benefits of greater women's workforce participation, is more than just data on a page – it has the power to create real change," said Dimitra Manis, Chief Purpose Officer at S&P Global. "I'm proud that we are not only advancing the conversation around the gender pay gap through new insights, but also committed to transparency around our own rewards structure to ensure equitable pay among our people."

This research was conducted by the S&P Global Market Intelligence Quantamental Research Team and includes analyses of more than 80,000 executives who held positions at Russell 3000 firms during the years 2006-2020.

These findings build off the team's previous research around the performance of companies with women in CEO and CFO positions, which found that appointments of women leaders drove positive performance, including higher profitability and superior stock prices. Both reports are part of S&P Global's #ChangePays initiative, which illuminates the positive impact of women in the workforce across companies, organizations, economies, and global communities.

Read the full report here.

About S&P Global:
S&P Global (NYSE: SPGI) is the world's foremost provider of credit ratings, benchmarks and analytics in the global capital and commodity markets, offering ESG solutions, deep data and insights on critical business factors. We've been providing essential intelligence that unlocks opportunity, fosters growth and accelerates progress for more than 160 years. Our divisions include S&P Global Ratings, S&P Global Market Intelligence, S&P Dow Jones Indices and S&P Global Platts. For more information, visit www.spglobal.com.

About S&P Global Market Intelligence:
At S&P Global Market Intelligence, we understand the importance of accurate, deep and insightful information. We integrate financial and industry data, research and news into tools that help track performance, generate alpha, identify investment ideas, perform valuations and assess credit risk. Investment professionals, government agencies, corporations and universities around the world use this essential intelligence to make business and financial decisions with conviction.

S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI), the world's foremost provider of credit ratings, benchmarks and analytics in the global capital and commodity markets, offering ESG solutions, deep data and insights on critical business factors. S&P Global has been providing essential intelligence that unlocks opportunity, fosters growth and accelerates progress for more than 160 years. For more information, visit www.spglobal.com/marketintelligence.

Media Contacts:
Tara Powers
Director, Communications, S&P Global
646-335-3662
tara.powers@spglobal.com   

Amanda Oey
Senior Communications Manager, S&P Global Market Intelligence
332-323-2312
amanda.oey@spglobal.com 

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SOURCE S&P Global

FAQ

What did S&P Global's report on the gender wage gap reveal about women's pay ratios?

The report indicated that while women's median pay ratio has steadily increased, the mean pay ratio has declined over most of the study period.

What is the main recommendation from S&P Global's report on the median wage gap?

The report suggests companies should adopt a comprehensive approach to address pay equity, rather than focusing solely on median compensation.

How has the representation of women in executive roles changed according to S&P Global's findings?

From 2018 to 2020, the percentage of women in C-suite and executive positions increased from 15.4% to 19.2%.

What did S&P Global's report conclude about companies involved in compensation disputes?

The report found that companies that have been defendants in compensation disputes often exhibit more pronounced Gender-Based Compensation Management.

How does S&P Global's report relate to their previous research on women leaders?

This research builds on previous findings that women in leadership roles generally lead to better company performance, including profitability.