Trickle down effect of women CEOs

SHARE

This week, PepsiCo announced that Indra Nooyi will become the company's first female chief executive--advancing her to the rank of No. 2 among female CEOs at Fortune 500 companies rated by revenue. This Indian-born American is second behind Archer Daniels Midland (ADM) CEO Patricia Woertz. Agricultural processor ADM is 56th on the Fortune list, and PepsiCo, the world's second-largest soft-drink company after Coca-Cola Co., is 61st.

What a week for American corporate women! Nooyi's promotion was announced around the same time as the release of a paper at the annual meeting of the American Sociological Association (ASA), showing major progress on narrowing the gender gap in pay. According to the Washington Post, the paper revealed that "American women earn substantially more money and narrow the long-standing gender gap in income if other women in their workplaces reach the ranks of senior management." The finding was based on a review of data from the 2000 Census that included 1.3 million American workers in nearly 30,000 jobs and 79 metropolitan areas.

Diversity advocates say the ASA study proves that women's advancement to executive suites spreads corporate equity not just among the women lucky enough to advance to CEO but among corporations generally. The caveat is, the trickle-down effect occurs only when women advance to senior, not middle management. When women hold lower-level management positions, the ASA paper found women ranked lower than these managers earned about 81 percent of what their male counterparts earned. When women are in senior management, that figure rose by 10 percentage points.

Yet another new study on lower wages for female professions recalls a line from the Bard, "The fault, dear Brutus, is not in our stars but in ourselves." The Academy of Management reports women professionals charge less than their male counterparts in order to build good relationships with clients. Caveat here: The study only compared the earnings of male and female veterinarians. "The research looked at 536 veterinarians (174 women and 362 men) who own their practices. The examination of women's self-imposed underpricing revealed a number of intriguing results, including the possibility that the apparent gender income gap isn't quite what it seems."

Could it be that female veterinarians feel sorrier for other women with sick cats, than, say, male veterinarians do? Whatever!! The study suggests future research should also check out whether underpricing by female professionals applies in medicine and law.

A clarification: My last entry on presidential secrecy referred to former President Clinton's palsy relationship with the media, including a discussion with media type Ben Wattenberg, who then, I was told by a Clinton appointee at the time, leaked a story about his conversation with the president to the New York Times. Wattenberg E-mailed some people we know in common as follows: "If anyone knows how to reach Bonnie Erbe, please tell her President Clinton knew I was going to report it; I notified Mike McCurry in advance, and it was green-lighted by David Gergen." Point duly noted.