Parity in compensation continues to be a challenge women face in corporate America. Data shows that U.S. women working full-time earned just $0.80 for every dollar earned by men in 2016 — and that gap only widens for women of color. That’s a difficult fix. However, women who found and run their own businesses are in a better position to control their own destinies.
While prior studies have found that female founders are reluctant to pay themselves as much as their male counterparts choose to pay themselves, a new Business Outlook Survey — conducted by EY and the Women Presidents’ Organization — shows that more female CEOs plan to give themselves a raise next year. That’s good news not just for them, but for American working women generally — since it could help in the long-term fight for equal pay.
The data in the survey represents a hopeful indicator. In terms of compensation, 75 percent of Women Presidents’ Organization members — who represent second-stage entrepreneurs looking to accelerate the growth of their companies – pay themselves over six figures annually. Over half of the survey respondents — 53 percent — said they pay themselves between $150,000 and $300,000. About 40 percent predicted a 1-20 percent hike, and more than 5 percent were planning an increase of 20 percent or more. This suggests more female founders are ready to put themselves on even footing with their male counterparts — at least when it comes to measuring their own worth.
Many of our members started out in corporate America. Whether it was the result of corporate downsizing or a vision of a different life, they followed a dream of having more control over their business culture, their time — and their compensation.
While there is almost certainly a gap between what female entrepreneurs and their male counterparts pay themselves, the survey underscores that women business owners may be less likely to devalue their leadership abilities by paying themselves more.
Thirty years ago, there were roughly four million women-owned businesses in the United States. Today there are more than 11 million, representing 39 percent of all firms and millions of employees – both male and female. Women entrepreneurs have had — and will continue to have — a significant impact on the economy, when you factor in the revenues they generate and the number of people they employ. When women running their own companies set higher salaries for themselves, it sends a signal not only to investors but to everyone —including themselves — of what they’re worth.
Dr. Marsha Firestone, President and Founder, Women Presidents’ Organization, [email protected]