On equal pay and election day…
Today being election day, there’s been endless talk over the past few weeks about the women’s vote — waitress moms, Walmart moms, single women, you name it. Being a suburban mom who took my son to vote in his first presidential election this morning, I couldn’t help but think about all of this talk when I read this seemingly innocuous 8-K that IBM (IBM) filed yesterday.
On October 30, 2012, the IBM Board of Directors approved compensatory arrangements for Virginia M. Rometty, Chairman, President and Chief Executive Officer of the Company. Mrs. Rometty’s base salary will remain $1.5 million.
Snore city, right? But having covered IBM pretty closely earlier in my career, something didn’t seem quite right. In fact, I was pretty sure that IBM’s male CEOs were paid more. So I went straight to the filings and sure enough, there was Louis Gerstner, who according to this proxy had a base salary of $2 million in 2000. That’s 12 years ago. Ditto for the man that Rometty replaced last year as CEO: Samuel Palmisano, whose base salary was $1.5 million all the way back in 2003. When he stepped down last year, it was $1.8 million. Update: I should have pointed out that in 2011, Rometty’s salary was roughly half of what it is now: $800K, something that Bloomberg caught earlier this year.
As footnoted regulars know, I’m not usually the person arguing for CEOs to be paid more. But this clearly raises the question: why is Rometty being paid 17% less than Palmisano and 25% less than Gerstner for the same job?
It would be interesting to see if the same holds true for the other female CEOs of Fortune 500 companies. Back in June, Theo Francis footnoted that the trend seems to hold true, even at the highest levels. Granted, base salaries rarely tell the whole compensation picture and usually only make up a small piece of a CEO’s overall compensation, as Theo Francis footnoted when Palmisano stepped down last year. Nor to we expect Rometty to turn to the Lilly Ledbetter Fair Pay Act, which President Obama signed on his first day of office in 2009.
Still, if women like Rometty aren’t even being paid what their male counterparts are for the same job, what hope is there for the rest of us?
Free filings! Next week, I’ll be running a three-day online workshop on digging into key SEC filings, including the 10-K, 10-Q, and proxy statement. Due to the generous support of the Reynolds Center for Business Journalism, it’s free. You can get more information and sign up here.