An Examination of the Impact of Macro Context on Women CEOs in the Hospitality Industry

Abstract

An extensive body of research has studied the antecedents and outcomes of gender differences at the workplace. The differential returns in objective career success (defined by promotions and salary) have been primarily attributed to individual and organizational factors. Yet, other than the effects of national culture and state interventions to promote gender equity (such as board quotas) on women’s status, we know to a less extent the impact of macro context on the gender gap. In particular, we study the effects of the federal regulation Sarbanes-Oxley Act (SOX) which followed one of the largest accounting fraud scandals worldwide (i.e. Enron in 2001). We also study the 2008 financial meltdown crisis (following the bankruptcy of Lehman Brothers) on the position and pay of female CEOs. Using Standard & Poor’s (S&P) Executive Compensation database (Execucomp) from 1992 to 2011, we found that SOX led to an increase in women serving as CEOs. However, neither the federal act nor the financial meltdown had an effect on the total compensation of CEOs. This evidence suggests that the gender pay gap remains constant regardless of particular events happening in the macro context.

Appendix

In order to infer the position covered by each executive we proceeded as follows.

First of all, using a dummy variable (EXECDIR) provided by Execucomp that takes the value of 1 if the manager was a member of the board and zero otherwise, we focus only on managers who sit on the board. We then consider only the top 5 positions: Chief Executive Officers (CEOs), Chief Finance Officers (CFOs), Chief Operating Officers (COO), the President and the Chairman. For identifying the position covered by each officer we adopted the subsequent method:

• 1. In order to identify managers who served as a CEO, Execucomp provides a variable labelled CEOANN indicating whether the executive covered the position of CEO for most of the year (or for all of it). If Execucomp indicates that the executives served as a CEO, we attribute such a position to the executive. If not, we proceed.

• 2. Like CEOANN, Execucomp reports a binary variable that indicates whether the executive served as a Chief Financial Officer (CFOANN). If the manager was not reported to have served as CEO and if CFOANN indicates that the manager served as a CFO, we attribute this title to the executive. Moreover, Execucomp provides a variable (TITLE) that indicates the most recent title attributed to the manager. We therefore look if the title contains any of those words: “finance”, “Financ”, “CFO” or “cfo”. If so, we also give the executive the “CFO” label.

• 3. To establish if the executive served as a COO, we search the variable TITLE and in particular we look to see if the variable contains any of the following words: “operating”, “Operating”, “COO”. If the managers were not occupying the position of CEO or CFO and if the title matches the above criteria, we gave him/her the role of COO.

• 4. To establish if the executive served as president, we try to first establish who served as a vice-president or executive vice president by searching for: “vp”, “Vice Presi”, “vice pres”, “vice-pres”, “vpres”, “v-pres”, “v-p”, “VP”. Then, once such managers have been excluded, we look to see if the remaining persons had the title of any position whose label contains: “president”, “President”, “Pres”, “pres”.

• 5. Finally, in order to establish who served as chairman we proceeded similarly. First we excluded managers who served as vice-chairman (those persons whose title contained “vice chairman”, “Vice Chairman”, “vice-chmn”, “v-chmn”) and including only those persons whose title included: “Chairman”, “chairman”, “chmn”, “Chmn”. As for the vice president, we encountered two problems. The first one is that we might exclude managers whose title is spelled differently from our criteria. Secondly, we exclude managers who served as both vice president and president at the same time.

• 6. We allocate all executives who do not match the above criteria to the “others” category.