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Sexism in the city

Sexism in the city

Female executives are working for half pay.

Women in senior jobs in Australia's largest companies earn up to 50 per cent less than men in similar positions, a government report has found. Women chief executives earn 32.3 per cent less than men in the top job, while the gap for chief operating officer and chief financial officer positions is about 50 per cent, according to the report by the federal government's Equal Employment for Women in the Workplace Agency.

The largest median pay gap is in the finance sector, where women top earners make 48 per cent less than men, followed by information technology and industrials.

EOWA director Anna McPhee said the existence of pay gaps in such senior jobs and the size of the gaps across roles were surprising and disappointing.

"It is bleak, and what I find it clearly demonstrates is that discrimination is systematic throughout the workforce," she said. "This report clearly shows that these women are playing at the same level in senior positions, they haven't taken a break from the workplace, or if they have it's been quite brief, they work long hours and are required to perform at high levels, yet women are being underpaid."

Overall, women hold just 7 per cent of top earner positions - those identified from annual reports as top earners or executives - in the ASX 200, according to the report's analysis by Macquarie University.

EOWA found 60 per cent of female top earners worked in the bottom 100 companies by market capitalisation, which Ms McPhee said posed another question.

"There's clearly a glass ceiling between the types of organisations women top earners work for, and we already know that because Gail Kelly is the only woman CEO of a top 10 listed company," she said.

While the numbers of women top earners are small and they are concentrated in lower-valued corporations, Ms McPhee said the overall picture painted by the report could not be dismissed, and sent a message to listed companies.

"You can't argue with that trend," she said.

"Organisations need to have a hard, close look at it because if women in senior positions can prove that they are being discriminated against in their salaries then that's illegal."

Some of the reasons for the hefty pay gaps identified in the report include women's lower share of discretionary payments such as bonuses or overtime, occupational and industrial segregation, and in some cases, outdated ways of calculating remuneration.

But the report concludes that "when all else appears equal, there is a broad undervaluation of women's skills. Methods used in remunerating senior level employees appear to have left women underpaid and undervalued".

The point at which women negotiated a pay rise or bonus and the amount they would settle for was often lower than for men, Ms McPhee said, which may also help explain the trend.

"Female dominated sectors have lower salaries so women's work is inherently valued at a lower level," she said.

Remedial action for employers includes conducting pay audits, removing gendered performance measures and providing pathways to non-traditional careers for women, the report recommends.

And more diversity in decision-making roles at board level and on remuneration committees also has an impact, as the report shows a higher percentage of women are top earners in companies with two or more women on their board.

National Australia Bank conducted a pay equity audit during 2006-07.

NAB's general manager, people services, Ilona Charles, said it was a useful if complex process.

"What we found was that we do have an average pay gap problem still," she said, "but if you take like for like roles we didn't have a gender pay issue. The issue is about job segregation, where women are working in more junior roles in customer service and call centres. More of our men are in senior management ranks."

While NAB's audit did not examine senior ranks, Ms Charles said at that level most of the women were in support roles and tended to be paid less than those in line roles.

"The key learning for us from the pay audit is you have to spend time on looking at the data and how to respond," she said. "We will do audits every two years. A lot of the issues raised are related to broader culture, women's ability to negotiate starting rates, and we are trying to focus on mentoring and skills uplift."

She said there had been a lot of interest in NAB's efforts and some of the bank's competitors were looking at pay equity.

Although there is an average pay gap of 16 per cent for women across the workforce, the new data confirms what many senior businesswomen have believed for years about pay discrepancies at the top of the corporate ladder.

A survey by the Association of Professional Engineers, Scientists and Managers Australia in mid-2007 found more than 26.8 per cent of professional women believed they were not receiving equal pay for equal work, but the level increased to nearly 39 per cent among women with business qualifications and in senior management positions.

The report also shows the pay gap persists across line and support positions, with women's pay lagging by 28 per cent and 39 per cent respectively.

© Fairfax Business Media

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