Female Board Directors from ASX companies ranked 50 to 300 earned more than their male counterparts in the 2015 year.
Egan Associates received a significant amount of interest in the KMP Report released last month on remuneration for Directors among Australia’s top 300 companies, inspiring us to conduct further analysis. One question was whether the gender pay gap – which the Workplace Gender Equality Agency has identified as increasing as positions become more senior, appears at the Board level.
Filtering for gender, it appears that in most cases, for women serving on the Boards of Australia’s top companies, the opposite was true.
Although women serving on Boards in the top 50 companies earned less than their male counterparts, those outside this group yet still within the top 300 companies actually earned more, as can be seen in the following figure of the premium male Directors earn over female Directors across company bands.
Generally, Director pay will be more uniform than that of executives, because the retainer and committee fees are fixed, with little room to acknowledge individual competence and achievement. Therefore, if a Director is to earn more, they must often serve on or chair more Board committees than other Directors.
Egan Associates examined the committee membership of the sample, finding that for those Directors in the top 50, the average number of committees on which the men served or chaired was higher than that for the females. For the other company bands, the opposite was true. Hence it can be surmised that it is additional committee memberships that is creating the difference in pay.
Egan Associates has observed that the qualifications, skills and training of women Directors is particularly high, providing them with the necessary prerequisites for participating meaningfully in Board committees. Therefore, although it may seem surprising to some that female Directors are actually earning a premium in some categories of the ASX, the fees have been well earned.