How equal is pay at the top?

Today, amid much hoopla, Congress is considering a bill intended to end pay inequality between men and women, largely through a series of disclosure and reporting requirements. It is primarily being championed by Democrats, and it isn’t expected to go anywhere any time soon — Republicans likely have the votes to block it in the Senate today — but it has given publicity to plenty of research indicating that women often still make substantially less than men.

All of which, of course, made us wonder if that holds true in the corner office. We can’t claim to have done a rigorous study, but we did take a look at the five women running the biggest U.S. companies, per the latest Fortune 500 list. Then we compared their total pay to the total compensation of the executives running the companies on either side of theirs on the list.

So, for example, we compared the pay of Meg Whitman, CEO of No. 10 Hewlett Packard (HPQ), to the pay of both Randall L. Stephenson, chairman and CEO of No. 11 AT&T (T), and Alan Mullally, CEO of No. 9 Ford Motor (F). Then we did the same for IBM (IBM) CEO Virginia Rometty, Archer Daniels Midland (ADM) CEO Patricia Woertz, PepsiCo (PEP) CEO Indra Nooyi, and WellPoint (WLP) CEO Angela Braly.

Overall, the pay gap appears to persist even at the highest levels: Those top CEOs made an average of $14.6 million — not small change, but just 78% of the $18.6 million average compensation for the men bracketing them on the Fortune 500 list.

On a more granular level, the results were mixed, as you might expect from such a small sample. Compensation for three of the female executives — Whitman, Nooyi and Braly — trailed that of both men we compared them to. They made just 64% to 82% of the total pay made by the comparison male CEOs.

By contrast, Rometty, at $15 million (using her target pay, since she wasn’t CEO yet in 2011) compares roughly equally to Citigroup (C) CEO Vikram Pandit’s $14.9 million, and to CVS Caremark (CVS) CEO Larry Merlo’s $14.1 million.

The comparison for Woertz (and, indeed, the overall comparison) is skewed by the dramatically lower pay for Steven H. Collis, CEO of AmerisourceBergen (ABC), who made $4.6 million in 2011 — well below any of the 14 other CEOs we considered. But Woertz was the next lowest, at $11.1 million overall. That’s just 68% of the other CEO we compared her to, Procter & Gamble (PG) CEO Robert McDonald, who made $16.2 million.

Now, all of the women (and men) here are making plenty of money — our hearts aren’t exactly breaking for them. And we’ll be the first to admit that this back-of-the-envelope analysis has plenty of shortcomings: We only looked at five female CEOs (of the 12 in the Fortune 500); some of the men have been on the job considerably longer than their female counterparts; and the assumptions that companies have to use to value equity compensation could skew things as well. Moreover, some of the differences may also stem from things like promotions and whether a CEO is also chairman (though anecdotally, we can’t say that makes terribly much difference for CEOs generally).

Still, the size of the apparent gap is striking, given that the female CEOs have reached the pinnacle of big business, against considerable odds — remember that just 2.4% of the Fortune 500 is run by women.

Meantime, below are some of the numbers we crunched. And if anyone is aware of a more rigorous recent examination of this question, let us know in the comments or by email.

Meg Whitman, Hewlett Packard: $16.5 million
Alan Mullally, Ford Motor: $29.5 million
Randall Stephenson, AT&T: $22 million
Virginia Rometty, International Business Machines: $15 million (target)
Larry Merlo, CVS Caremark: $14.1 million
Vikram Pandit, Citigroup: $14.9 million
Patricia Woertz, Archer Daniels Midland: $11.1 million
Robert McDonald, Procter & Gamble: $16.2 million
Steven H. Collis, AmerisourceBergen: $4.6 million
Indra Nooyi, PepsiCo: $17.1 million
Ian Read, Pfizer: $25 million
William Weldon, Johnson & Johnson: $26.8 million
Angela Braley, WellPoint: $13.3 million
Michael Dell, Dell: $16.1 million
Douglas Oberhelman, Caterpillar: $16.9 million

Image source: pay inequality photo via


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