As more startup businesses recover slowly from the precipitous drop-off in revenue caused by the pandemic, female CEOs are paying themselves even less compared with their male counterparts, according to the latest report from San Francisco-based accounting firm Kruze Consulting.
The report analyzes 250 seed and venture-funded startups in America and finds that the salary gap between female and male startup CEOs grew four times wider in 2022 from what it was in late 2019. The differential clocks in at $20,000 in 2022, up from $5,000 in 2019.
Compared with 2021, 2022 saw an increase of only $1,000 annually for female CEOs, while male CEOs saw a $5,000 salary increase. For every dollar in salary men earned, female CEOs earned:
- 2022: $0.86
- 2021: $0.89
- 2020: $0.69
- 2019: $0.96
The study also points out the startling difference in how male and female CEOs have reacted to the pandemic. On average, female startup CEOs have cut their pay by 30 percent during the coronavirus outbreak (bringing salaries down to $101,000 in 2020 from $138,000 in 2019), while male CEOs have given themselves a raise (raising their salaries to $146,000 in 2020, up from $143,000 in 2019).
"As the gender pay gap persists, it's critical for companies to set an example of equal pay from the top," Tanya Jansen, co-founder of compensation management software solution company beqom, tells Inc. "Female CEOs, and all women across any level, deserve to be paid fairly regardless of the role they are in."
Besides being underpaid, female leaders continue to be underrepresented in the workplace--made worse by the collapse of the child care sector and the inaccessibility of afterschool programs due to the pandemic. The risk of mothers leaving the labor force and reducing work hours to assume caretaking responsibilities amounts to $64.5 billion per year in lost wages and economic activity, according to a report from the Center for American Progress, a public policy think tank in Washington, D.C.
Here are three ways to determine what to pay yourself.
1. Talk to other CEOs in your industry.
Seek out fellow business leaders in your industry and check out what everyone else is doing. One way to network with other CEOs is to attend forums and community organizations. Organizations like the Fourth Floor, Female Founder Collective, and Million Dollar Women help female leaders connect and exchange values. Members also share information like where to find board seats and the next investment opportunity. Don't shy away from asking other business leaders questions, because they may have some questions for you too.
2. Arm yourself with data.
"In general, CEOs do not always have a say over their pay -- especially in larger corporations where pay is often determined by the board," says Jansen. "Additionally, in the startup sector, female-founded companies receive just 2.3 percent of total VC funding, making it much more difficult for women to lead high-revenue companies, and thus pay themselves more."
When negotiating with the board for higher pay, it is important to come armed with data. Free online resources like the U.S. Bureau of Labor Statistics and Pew Research Center income calculator offer statistical income reports categorized by industries, regional standards, the development stage your business is in, and how it's performing.
"For female executives who do have more control over their own salary, coming armed with data around what other CEOs in their industry make, and providing reasoning as to why they should make the same, is crucial in raising their pay to equal levels as their male counterparts," says Jansen. "Fighting for equal pay, even at the executive level, sets a positive precedent for women in other positions advocating for their own fair pay."
3. Don't undervalue yourself.
Women have a tendency to undervalue themselves. Avoiding this behavior starts with believing in yourself and practicing confidence. Simply rehearsing self-assuring statements and phrases can also help people gain courage.
"Don't be afraid to try. Seek out opportunities, take your place at the table, share your ideas and observations," Vanessa Yakobson, CEO of Blo Blow Dry Bar, North America's largest blow dry bar franchise, told Inc. in March.
Yakobson explains that as a leader, you must prove to yourself that you are capable, so you have the power to take on challenges, command respect, and encourage others to listen. Once that happens, maybe you'll realize your worth.