She'-E-O Compensation Gap: A Role Congruity View

• Published in: Journal of business ethics Vol. 159; no. 3; pp. 745 - 760
• Main Authors: Wang, Joyce C., Markóczy, Lívia, Sun, Sunny Li, Peng, Mike W.
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer 01-10-2019; Springer Netherlands; Springer Nature B.V
• Subjects: Business and Management; Business Ethics; Chief executive officers; Chief executives; Compensation; Education; Effectiveness; Ethics; Executive compensation; Executives (Business); Females; Gender; Gender pay gap; Gender roles; Income inequality; Leadership; Management; Original Paper; Personality traits; Philosophy; Quality of Life Research; Risk; Risk taking; China; Role congruity theory; Communal traits; Female-dominated industry; Agentic traits; Gender compensation gap; Risk-taking; Female CEOs
• ISSN: 0167-4544; 1573-0697
• DOI: 10.1007/s10551-018-3807-4

Is there a compensation gap between female CEOs (She'-E-Os) and male CEOs? If so, are there mechanisms to mitigate the compensation gap? Extending role congruity theory, we argue that the perception mismatch between the female gender role (that assumes communal traits) and the leadership role (that assumes agentic traits) may lead to lower compensation to female CEOs, resulting in a gender compensation gap. Nevertheless, the compensation gap may be narrowed if female CEOs display agentic traits through risk-taking, or alternatively, work in female-dominated industries where communal traits are valued. Additionally, we expect that female CEOs' risk-taking is less effective in reducing the gender compensation gap in female-dominated industries due to the conflicting emphases on agentic and communal traits. Leveraging a sample of Chinese publicly listed firms, we find support for our hypotheses. Overall, this study contributes to the ethics literature on income inequality issues, by highlighting the effectiveness of potential mechanisms to close the gender compensation gap between female and male CEOs.