You would think that women CEOs— especially those who own their own companies—would get the same pay received by their male counterparts. After all, they are both at the top. Unfortunately, that does not seem to be the case.
Meghan Casserly of Forbes Magazine, citing research from American Express Open, writes that female entrepreneurs who pay themselves write only $60,000 on the average on their paychecks. This is $18,000 lower than what their male entrepreneurs would write. This gender pay gap even among women who have the power to pay themselves any amount they like mirrors what the regular full-time working woman earned in 2010, according to the 2012 Catalyst Report where the “median annual earnings for full-time, year-round women workers in 2010 was $36,931 compared to men’s $47,715.”
There are various reasons for this. Casserly talked to Julie Weeks, the President and CEO of Womenable who said that “there’s a tendency for female entrepreneurs to pay themselves last. Any extra revenue is generally used to pay employees, bring on new hires or reinvest in the company.” She added: “Women pay themselves last… Or at least not first.” This is in contrast to men who pay themselves more because they place “value on their work and the hours they put into the company’s success,” writes Casserly.
But the fact that women-owned firms are smaller and bring in lesser revenues than men-owned enterprises is also another reason why female entrepreneurs can’t afford to grant themselves fatter paychecks. Geri Stengel, a Forbes contributor, cites a 2010 report prepared by the U.S. Department of Commerce Economics and Statistics Administration for the White House Council on Women and Girls which reflects such. Women-owned businesses “account for only 11% of sales and 13% of employment among privately-held companies.” The slow growth of businesses owned by women is also due to the fact that they “start with less capital than men and are less likely to take on additional debt to expand their businesses,” the report states.
In Britain, a similar gender pay gap is encountered by “high flying women executives.” Becky Barrow of MailOnline reported that they are paid 10 percent (as much as 22 percent in Germany) less than their male counterparts who are doing exactly the same job. This situation says Everywoman founder Maxine Benson, is due to the fact that: “Women are not negotiating their value. They do not have the confidence in their worth.”
But a glimmer of hope exists. The entrepreneurship pay gap in the United States is closing, writes Casserly. A couple of years ago, female entrepreneurs only paid themselves 64% of the salaries of male entrepreneurs. Now, they have started to increase that to 76 percent. How soon that gap will close—if it will close at all—still remains to be seen.