While there is no shortage of studies and statistics indicating the positive attributes related to companies that have diverse boards of directors, there is a new piece of information just released that may surprise you. Compensation research firm Equilar analyzed CEO pay at 100 large companies to show that companies with greater board gender diversity paid their top executives about 15 percent, or approximately $2 million, more in median pay last year.
Though it’s unclear as to why that may be true and exactly how direct the correlation between CEO pay and board diversity is, some speculate that the few women represented on top company boards may be an “old girls’ club” of “consensus builders” — or “yes” women. What is clear is that as the number of women in C-suite positions at elite companies continues to grow, boards need to seek out these professionals to freshen their candidate pools. At Fenaroli & Associates, we also preach the importance of looking past the CEO bias to tap into top talent from women and other diverse candidates in non C-level positions who can be invaluable assets to a board.
Are you struggling to find such candidates? Contact us for help.
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.