VEA Vice Chair Nell Minow is quoted in this New York Times story about a study showing that boards with women may be more inclined to overpay CEOs.
Appointing more women to corporate boards has long been viewed as a good thing for a company’s performance and for society as a whole.But gender diversity among directors carries another benefit, 2015 proxy filings show: a bigger paycheck for the company’s chief executive.
An analysis of C.E.O. pay at 100 large companies last year by Equilar, a compensation research firm in Redwood City, Calif., found that companies with greater gender diversity on their boards paid their chief executives about 15 percent more than the compensation dispensed by companies with less diverse boards. In dollars, this translated to approximately $2 million more in median pay last year among these companies.This data, which comes from a smaller set than Equilar’s broader study of pay at the top 200 companies, doesn’t necessarily prove cause and effect, of course. There could be other reasons for the disparity, too. The more diverse companies could be bigger or more profitable than average, for example.Still, it stumped me. For some reason, I had expected women directors to stand tougher on pay issues.
But Nell Minow, a longtime expert on corporate governance, was unsurprised by the findings.“It’s very difficult for women to get on boards, and I think they are under even more pressure to go along and get along,” said Ms. Minow, a vice chairwoman at ValueEdge Advisors, a consulting firm that works with shareholder groups on compensation and other issues. “The culture of the boardroom is to vote yes. You want to stay on the board, don’t you?”