Aging the gap: The compensation among men and women executives

Abstract

In this study, we explore how early career advancement affects the gender pay gap among top executives and argue that an employee's age at attainment of an executive position serves as a signal that helps reduce biases toward women, thereby lowering gender pay differentials. We analyze career data of 803 executives from public high-technology manufacturing firms in the United States by collecting information from ExecuComp, Marquis Who's Who, LinkedIn, and Bloomberg. Our results indicate that attaining a top management position at a young age has a positive effect on pay, particularly among women, and this effect is due to the variable portion of compensation, which represents a large proportion of compensation among top executives. Further, recent research has identified a pay premium among high-potential female managers, although its key drivers remain unclear. This paper explores age as an observable signal that influences this premium and reduces the gender pay gap.