You've no doubt heard the pandemic hit women harder than men. Women lost more jobs than men and took on a greater share of the additional child care burden. One startling report even found that Covid set back efforts to close the gender gap by 36 years.
But while women's particular struggles during the pandemic may be common knowledge, one stark gender difference is just coming to light. Covid didn't just take a larger bite out of the paychecks of female front-line workers--it also impacted the salaries of female startup CEOs far more than it did male ones.
Women CEOs' salaries took a bigger hit.
When Covid first hit the U.S. back in March of last year, many small-business owners and startup CEOs faced a set of grim choices. With customers locked at home and much of global commerce at a standstill, how would they keep their businesses going despite a precipitous drop off in revenue? Cutting staff costs was an obvious choice for many, and when you're asking your employees to sacrifice, then it's only fair for the folks at the top to feel a little pain too, right?
This logic may seem to lead inexorably to CEOs taking a pay cut too, but according to an eye-opening new analysis of the compensation of 200 startup CEOs from startup accounting consultancy Kruze, female CEOs apparently saw the necessity of trimming their own pay more readily than male ones.
While female startup CEOs cut their pay by 30 percent during the height of the pandemic (down to $101,000 from $138,000 in 2019), male CEOs actually gave themselves a modest raise (up to $146,000 from $143,000 in 2019). These are averages, of course, and it's important to note that some male CEOs did slash their pay for the good of their companies. The numbers show these efforts were washed out by those who took raises, however.
"We knew that there was this trend of a lot of CEOs trying to cut their own pay to help the company, but we didn't realize that it had fallen disproportionately on women," Kruze's VP of financial planning and analysis Healy Jones told VC newsletter Pipeline Protocol. "That was a shock."
As things have opened up again the pay gap between male and female startup CEOs has started to close -- the average female CEO's salary is back up by $30,000 -- but women CEOs are still getting paid less than their male peers compared with before the pandemic. In 2019 female startups CEOs earned 0.96 cents for every dollar a male CEO earned. Now they make 0.89 cents.
Time to review CEO salaries?
Given its readership, perhaps it's no surprise that Protocol Pipeline's response to these figures is to suggest VCs take a hard look at the salaries of the CEOs in their portfolio. VC firms should "run their own salary data reports for their portfolio companies, and correct any disparities where salaries may remain depressed from the earlier pandemic cuts," the newsletter recommends.
But if you're a female business owner whose salary isn't dependent on a board or investors, there is no reason you can't review your own compensation in light of these numbers. If your business has rebounded and your staff are well taken care of, it's worth asking yourself if you're paying yourself both what you're worth and what a male CEO would make to do the same tough job.