The Gender Pay Gap in German Executive Boards

Bachelor Thesis from the year 2018 in the subject Gender Studies, grade: 1,7, Leuphana Universität Lüneburg, language: English, abstract: This study aims to determine the extent to which existing general theories and explanations for the gap are applicable to the specific and homogenous group of top executives and chairpersons. Key explanations for the gender pay gap are theorized to be company size, the executive's position within the board and industry line. Additionally, existing labor market theories suggest that the size of the discriminated group has an impact on the amount of discrimination, so that the number of females has an impact on the gender pay gap. A linear regression was conducted to validate the explanations. Moreover, the effect of the minority group's size was analyzed within another set of regressions, using as moderators the proportion of female board members and the proportion of male workers within the industry. The hypothesis states that an increase in the size of the minority group causes a decrease in the effect of gender on earnings. The dataset was provided by Kienbaum Consultants International GmbH and included information on the base, variable and total compensation of 1,080 board members (N = 1,080) among DAX- and MDAX-listed companies in the years 2014-16. The results show significant effects of gender on earnings, even after taking into account the board members' position, the industry line and the size of the company. Both company size and position show a positive significant coefficient for the earnings regression, while industry does not show a significant effect. For the moderator analyses, neither the proportion of females on the board nor the proportion of females within the industry had a significant widening or shrinking effect on the gender pay gap. This leads to the assumption that neither one influence the gender pay gap. However, I found major inequalities of the gender pay gap in base and variable compensations. In a post-hoc analysis I tested significant differences in mean target compensation and mean payout level. The results show no significant differences in target compensation, yet in payout level, which suggests that further research on the topic of performance management is needed.