Gender pay gap: Female executives earn just a little more than half of what their male counterparts do

Largest gaps were seen amongst firms with a market cap of $1b.

Who runs the world? Certainly, not the girls, as revealed in the latest business school study by the National University of Singapore released ahead of the International Women's Day on March 8.

According to the study, the salaries of female directors in SGX-listed companies trails far behind their male counterparts, earning just 56.8% of male directors’ remuneration on average. This indicates a gender pay gap of 43.2%. The largest gaps were found among large firms with a market capitalisation over $1b (45.5%) and among executive directors (43.9%).

Executive Directors showed the greatest differences with average annual salaries of $1.12b for men and only $628,024 for women. If one excludes CEOs (of which just 3.6% were women) and executive Chairs (of which just 1.2% were women) female executive directors still earn only 86.1% of male directors in the same role.

Independent Directors, who are often paid a fixed fee, had the smallest gender pay gap: female independent directors earned 83.0% of male Independent Directors (i.e. a 17.0% gender pay gap).This can partially be explained by the fact that women are less likely to serve on board committees, be appointed committee chairs, or act as lead Independent Directors; roles that come with greater responsibilities and higher fees.

But in other director categories where there is greater discretion, such as Executive Directors and Non-Executive Directors, women earned just 56.1% and 70.4% of their male counterparts respectively.

The gender pay gap in small listed firms was 44.9%, in mid-caps it was 39.9%, and for large caps the gender pay gap was 45.5%.

“These results are disappointing and show that gender inequality in SGX-listed company boards deserves greater attention. The discussion on board diversity in Singapore should move beyond merely increasing the percentage of female directors to also address deep-seated inequalities including remuneration and women’s share of board leadership roles,” said Marleen Dieleman, Associate Professor of Strategy and Policy at NUS Business School.

The study was based on data from 199 firms listed on the Singapore Exchange that disclosed exact director remuneration for Financial Year 2015 - 2016. However, the vast majority of firms opted to explain rather than comply with the Code of Corporate Governance’s requirement to disclose exact director remuneration on a named basis. Overall, the percentage of female directors stood at 9.7% in all listed firms and 8.0% among those firms that disclosed director salaries.