IDEAS home Printed from https://ideas.repec.org/a/bla/acctfi/v62y2022i2p2615-2649.html
   My bibliography  Save this article

The sociology of compensation inequality in upper‐echelon positions: evidence from Australia

Author

Listed:
  • Maryam Safari
  • Jacqueline Birt
  • Yi Xiang

Abstract

This paper explores the sociology of gender pay equality in leadership positions. Using a large compensation dataset, we examine the impact of gender pay inequality among directors and executives on firm performance. Based on a triangulation research design, quantitative outcomes are supplemented with semi‐structured interviews to study compensation expectations, negotiation skills and gender differences in teamwork on boards of directors. The findings show that remuneration transparency is becoming the norm. However, compensation inequalities still exist and undermine performance. The results indicate that diversity targets or specific policies regarding equality and equity of opportunity are insufficient if they are not supported by a cultural understanding and the application of equitable policies and procedures throughout the organisation.

Suggested Citation

  • Maryam Safari & Jacqueline Birt & Yi Xiang, 2022. "The sociology of compensation inequality in upper‐echelon positions: evidence from Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2615-2649, June.
    • Handle: RePEc:bla:acctfi:v:62:y:2022:i:2:p:2615-2649
    DOI: 10.1111/acfi.12875
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/acfi.12875
    Download Restriction: no
    File URL: https://libkey.io/10.1111/acfi.12875?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bennouri, Moez & Chtioui, Tawhid & Nagati, Haithem & Nekhili, Mehdi, 2018. "Female board directorship and firm performance: What really matters?," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 267-291.
    2. Niamh M. Brennan & Collette E. Kirwan & John Redmond, 2016. "Accountability processes in boardrooms," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 29(1), pages 135-164, January.
    3. Kumarasiri, Jayanthi & Gunasekarage, Abeyratna, 2017. "Risk regulation, community pressure and the use of management accounting in managing climate change risk: Australian evidence," The British Accounting Review, Elsevier, vol. 49(1), pages 25-38.
    4. David Bjerk, 2008. "Glass Ceilings or Sticky Floors? Statistical Discrimination in a Dynamic Model of Hiring and Promotion," Economic Journal, Royal Economic Society, vol. 118(530), pages 961-982, July.
    5. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2007. "Is There a Glass Ceiling over Europe? Exploring the Gender Pay Gap across the Wage Distribution," ILR Review, Cornell University, ILR School, vol. 60(2), pages 163-186, January.
    6. Duff, Angus, 2017. "Corporate social responsibility as a legitimacy maintenance strategy in the professional accountancy firm," The British Accounting Review, Elsevier, vol. 49(6), pages 513-531.
    7. Huang, Qianqian & Jiang, Feng & Lie, Erik & Que, Tingting, 2017. "The Effect of Labor Unions on CEO Compensation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 52(2), pages 553-582, April.
    8. Mariateresa Torchia & Andrea Calabrò & Morten Huse, 2011. "Women Directors on Corporate Boards: From Tokenism to Critical Mass," Journal of Business Ethics, Springer, vol. 102(2), pages 299-317, August.
    9. Adams, Renée B. & Ferreira, Daniel, 2009. "Women in the boardroom and their impact on governance and performance," Journal of Financial Economics, Elsevier, vol. 94(2), pages 291-309, November.
    10. Elkinawy, Susan & Stater, Mark, 2011. "Gender differences in executive compensation: Variation with board gender composition and time," Journal of Economics and Business, Elsevier, vol. 63(1), pages 23-45.
    11. Elkinawy, Susan & Stater, Mark, 2011. "Gender differences in executive compensation: Variation with board gender composition and time," Journal of Economics and Business, Elsevier, vol. 63(1), pages 23-45, January.
    12. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    13. Andreas Leibbrandt & John A. List, 2015. "Do Women Avoid Salary Negotiations? Evidence from a Large-Scale Natural Field Experiment," Management Science, INFORMS, vol. 61(9), pages 2016-2024, September.
    14. Marianne Bertrand & Claudia Goldin & Lawrence F. Katz, 2010. "Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 228-255, July.
    15. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 11, pages 973-1041, Elsevier.
    16. John Gathergood, 2013. "An Instrumental Variable Approach To Unemployment, Psychological Health And Social Norm Effects," Health Economics, John Wiley & Sons, Ltd., vol. 22(6), pages 643-654, June.
    17. Kornberger, Martin & Carter, Chris & Ross-Smith, Anne, 2010. "Changing gender domination in a Big Four accounting firm: Flexibility, performance and client service in practice," Accounting, Organizations and Society, Elsevier, vol. 35(8), pages 775-791, November.
    18. Stijn Baert & Ann-Sophie De Pauw & Nick Deschacht, 2016. "Do Employer Preferences Contribute to Sticky Floors?," ILR Review, Cornell University, ILR School, vol. 69(3), pages 714-736, May.
    19. Lazear, Edward P, 1989. "Pay Equality and Industrial Politics," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 561-580, June.
    20. Hiau Joo Kee, 2006. "Glass Ceiling or Sticky Floor? Exploring the Australian Gender Pay Gap," The Economic Record, The Economic Society of Australia, vol. 82(259), pages 408-427, December.
    21. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    22. Martin Kornberger & Chris Carter & Anne Ross-Smith, 2010. "Changing gender domination in a Big Four accounting firm : Flexibility, performance and client service in practice," Post-Print hal-02311996, HAL.
    23. Doris M. Merkl-Davies & Niamh M. Brennan, 2017. "A theoretical framework of external accounting communication," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 30(2), pages 433-469, February.
    24. Rakesh Pandey & Pallab Kumar Biswas & Muhammad Jahangir Ali & Mansi Mansi, 2020. "Female directors on the board and cost of debt: evidence from Australia," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 4031-4060, December.
    25. Blau Francine D & Kahn Lawrence M, 2007. "The Gender Pay Gap," The Economists' Voice, De Gruyter, vol. 4(4), pages 1-6, June.
    26. Caspar Rose, 2007. "Does female board representation influence firm performance? The Danish evidence," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 404-413, March.
    27. Ann-Sophie De Pauw, 2016. "Do employer preferences contribute to sticky floors ?," Post-Print hal-01772258, HAL.
    28. Bugeja, Martin & Matolcsy, Zoltan P. & Spiropoulos, Helen, 2012. "Is there a gender gap in CEO compensation?," Journal of Corporate Finance, Elsevier, vol. 18(4), pages 849-859.
    29. Bhagat, Sanjai & Bolton, Brian, 2008. "Corporate governance and firm performance," Journal of Corporate Finance, Elsevier, vol. 14(3), pages 257-273, June.
    30. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2003. "A sticky floors model of promotion, pay, and gender," European Economic Review, Elsevier, vol. 47(2), pages 295-322, April.
    31. Niamh Brennan & Collette E. Kirwan & John Redmond, 2016. "Accountability Processes in Boardrooms: A Conceptual Model of Manager-Non-Executive Director Information Asymmetry," Open Access publications 10197/7652, Research Repository, University College Dublin.
    32. Shekhar Aiyar, 2012. "From Financial Crisis to Great Recession: The Role of Globalized Banks," American Economic Review, American Economic Association, vol. 102(3), pages 225-230, May.
    33. Amanatullah, Emily T. & Tinsley, Catherine H., 2013. "Punishing female negotiators for asserting too much…or not enough: Exploring why advocacy moderates backlash against assertive female negotiators," Organizational Behavior and Human Decision Processes, Elsevier, vol. 120(1), pages 110-122.
    34. Broadbent, Jane, 2012. "Commentary on Parker: Groundhog Day and optimism," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 23(1), pages 71-77.
    35. Nancy Mohan & John Ruggiero, 2007. "Influence of firm performance and gender on CEO compensation," Applied Economics, Taylor & Francis Journals, vol. 39(9), pages 1107-1113.
    36. Paul Hribar & D. Craig Nichols, 2007. "The Use of Unsigned Earnings Quality Measures in Tests of Earnings Management," Journal of Accounting Research, Wiley Blackwell, vol. 45(5), pages 1017-1053, December.
    37. Martin Kornberger & Chris Carter & Anne Ross-Smith, 2010. "Changing gender domination in a Big Four accounting firm: Flexibility, performance and client service in practice," Post-Print hal-02276735, HAL.
    38. Craig Deegan & Muhammad Azizul Islam, 2012. "Corporate Commitment to Sustainability – Is it All Hot Air? An Australian Review of the Linkage between Executive Pay and Sustainable Performance," Australian Accounting Review, CPA Australia, vol. 22(4), pages 384-397, December.
    39. Kothari, S.P. & Leone, Andrew J. & Wasley, Charles E., 2005. "Performance matched discretionary accrual measures," Journal of Accounting and Economics, Elsevier, vol. 39(1), pages 163-197, February.
    40. David Bjerk, 2008. "Glass Ceilings or Sticky Floors? Statistical Discrimination in a Dynamic Model of Hiring and Promotion," Economic Journal, Royal Economic Society, vol. 118(530), pages 961-982, July.
    41. Leonora Risse & Lisa Farrell & Tim R L Fry, 2018. "Personality and pay: do gender gaps in confidence explain gender gaps in wages?," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 919-949.
    42. repec:hal:journl:hal-02312104 is not listed on IDEAS
    43. Peter Baxter & Julie Cotter, 2009. "Audit committees and earnings quality," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(2), pages 267-290, June.
    44. Gul, Ferdinand A. & Fung, Simon Yu Kit & Jaggi, Bikki, 2009. "Earnings quality: Some evidence on the role of auditor tenure and auditors' industry expertise," Journal of Accounting and Economics, Elsevier, vol. 47(3), pages 265-287, June.
    45. Partha Sengupta & Suning Zhang, 2015. "Equity†Based Compensation of Outside Directors and Corporate Disclosure Quality," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1073-1098, September.
    46. Jane Broadbent & Linda Kirkham, 2008. "Glass ceilings, glass cliffs or new worlds?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(4), pages 465-473, May.
    47. Amon Chizema & Xiaohui Liu & Jiangyong Lu & Lan Gao, 2015. "Politically connected boards and top executive pay in Chinese listed firms," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 890-906, June.
    48. Mark Wooden, 1999. "Gender Pay Equity and Comparable Worth in Australia: A Reassessment," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 32(2), pages 157-171, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Avinno Faruk, 2021. "Analysing the glass ceiling and sticky floor effects in Bangladesh: evidence, extent and elements," SN Business & Economics, Springer, vol. 1(9), pages 1-23, September.
    2. Leonora Risse, 2020. "Leaning in: Is higher confidence the key to women's career advancement?," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 23(1), pages 43-77.
    3. Corekcioglu, Gozde & Francesconi, Marco & Kunze, Astrid, 2020. "Do Generous Parental Leave Policies Help Top Female Earners?," IZA Discussion Papers 13275, Institute of Labor Economics (IZA).
    4. Mohan, Nancy, 2014. "A review of the gender effect on pay, corporate performance and entry into top management," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 41-51.
    5. Eline Schoonjans & Hanna Hottenrott & Achim Buchwald, 2024. "Welcome on Board? Appointment Dynamics of Women as Directors," Journal of Business Ethics, Springer, vol. 192(3), pages 561-589, July.
    6. Liu, Haiming & Liang, Quanxi & Ling, Leng, 2022. "Underrepresentation of female CEOs in China: The role of culture, market forces, and foreign experience of directors," Research in International Business and Finance, Elsevier, vol. 63(C).
    7. Khwaja Naveed & Cosmina L. Voinea & Zahid Ali & Fawad Rauf & Cosmin Fratostiteanu, 2021. "Board Gender Diversity and Corporate Social Performance in Different Industry Groups: Evidence from China," Sustainability, MDPI, vol. 13(6), pages 1-15, March.
    8. Mario Bossler & Alexander Mosthaf & Thorsten Schank, 2016. "More Female Manager Hires through More Female Managers? Evidence from Germany," Working Papers 1618, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    9. Mario Bossler & Philipp Grunau, 2020. "Asymmetric information in external versus internal promotions," Empirical Economics, Springer, vol. 59(6), pages 2977-2998, December.
    10. Joyce C. Wang & Lívia Markóczy & Sunny Li Sun & Mike W. Peng, 2019. "She’-E-O Compensation Gap: A Role Congruity View," Journal of Business Ethics, Springer, vol. 159(3), pages 745-760, October.
    11. Smith, Nina & Smith, Valdemar & Verner, Mette, 2011. "Why Are So Few Females Promoted into CEO and Vice-President Positions? Danish Empirical Evidence 1997-2007," IZA Discussion Papers 5961, Institute of Labor Economics (IZA).
    12. Fang, Sheng & Goh, Chorching & Roberts, Mark & Xu, Lixin Colin & Zeufack, Albert, 2022. "Female entrepreneurs and productivity around the world: Rule of law, network, culture, and gender equality," World Development, Elsevier, vol. 154(C).
    13. Kato, Takao & Kodama, Naomi, 2017. "Women in the Workplace and Management Practices: Theory and Evidence," IZA Discussion Papers 10788, Institute of Labor Economics (IZA).
    14. David W. Johnston & Wang-Sheng Lee, 2012. "Climbing the Job Ladder: New Evidence of Gender Inequity," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(1), pages 129-151, January.
    15. Geiler, Philipp & Renneboog, Luc, 2015. "Are female top managers really paid less?," Journal of Corporate Finance, Elsevier, vol. 35(C), pages 345-369.
    16. Mario Bossler & Alexander Mosthaf & Thorsten Schank, 2020. "Are Female Managers More Likely to Hire More Female Managers? Evidence from Germany," ILR Review, Cornell University, ILR School, vol. 73(3), pages 676-704, May.
    17. Harakeh, Mostafa & Leventis, Stergios & El Masri, Tarek & Tsileponis, Nikolaos, 2023. "The moderating role of board gender diversity on the relationship between firm opacity and stock returns," The British Accounting Review, Elsevier, vol. 55(4).
    18. Elizabeth D. Almer & M. Kathleen Harris & Julia L. Higgs & Joseph R. Rakestraw, 2021. "Partner Gender Differences in Prestige of Clients Served at the Largest U.S. Audit Firms," Journal of Business Ethics, Springer, vol. 173(2), pages 401-421, October.
    19. Tani, Massimiliano & Valentine, Andrew & Sharpe, Kieran, 2022. "The Gender Pay Gap in the CEOs' Labor Market," IZA Discussion Papers 15781, Institute of Labor Economics (IZA).
    20. Nina Smith & Valdemar Smith & Mette Verner, 2013. "Why are So Few Females Promoted into CEO and Vice President Positions? Danish Empirical Evidence, 1997–2007," ILR Review, Cornell University, ILR School, vol. 66(2), pages 380-408, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:acctfi:v:62:y:2022:i:2:p:2615-2649. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/aaanzea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.