Watch CBS News

Gender pay gap at exec levels: Why women aren't paid the same as men

Why do Fortune 500 female execs still make less than male counterparts? 03:17

(CBS News) A new report finds that there is an even bigger pay gap for women at the top of the corporate ladder.

Out of 2,500 of best-paid executives, only 198 were female, according to a Bloomberg report based on the S&P 500. Women earned $5.3 million on average -- 18 percent less than men.

The disparity is often because women negotiate less than men, according to CBS News contributor and analyst Mellody Hobson. Hobson, who has been on committees that decide executive salaries, said when women do negotiate, there's a sense that it will backfire. "Men, when they ask for more money, it's seen as assertive," she said. "When women do it, it's seen as self-centered. And as a result of that, it affects our likability and our likability factors in to us being promoted along with competency."

Women with the same degrees as men have lower starting salaries -- $39,600 versus $51,300 among men, according to the American Association of University Women, a nonprofit advocacy group.

But, Hobson pointed out, the disparity is seen at all levels, from the entry-level positions to the board room. "I've had some very high-level women tell me that they, too, didn't go in and negotiate," she said. "They were excited about the opportunity they were getting, especially because there were so few women at the top. They saw that as the prize, as opposed to the money."

Turning to compensation committees she's served on, Hobson said they're growing more transparent due to U.S. Securities and Exchange Commission regulations. "There are a lot more objective factors being considered and less subjective factors," she said. "So the pay is anchored to performance. It might be earnings going up or revenues going up -- anything that is very clear showing that the executive is being paid for serving the shareholders.

"Now, the comp committees also take other things into consideration like how are other people in the industry being paid. And sometimes I call that an arms race," she said. "Because one person gets a bump in a related company and then committees look at that data and say should we be doing the same thing. There are lots of factors that are considered, but it's still moved more and more toward transparent and more objective, less subjective."

If women were paid more fairly, it could be a "boon for our country," Hobson said. "We've been talking about this tepid growth we have in the U.S," she said. "If women made the same as men, we would see three to four percentage points go up in growth. That is not insignificant. Just think back to the financial crisis -- $800 billion was injected into our economy, and that represented 1.5 percent growth, so we're talking big numbers. This is not just about helping a woman or her family. We all win in this scenario if women are paid fairly."

Watch Hobson's full analysis in the video above.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.