Is Equity Compensation Driving Executive Gender Inequality???

The authors analyzed pay for top ranking officers at major companies: chairs, chief executive officers, vice chairs, presidents, chief financial officers and chief operating officers. What they found was that opaque incentivized pay, rather than base salaries, is where women lose out most. Around 93% of the difference in total pay between male and female executives is based on incentive pay, including bonuses and equity, according to Bloomberg.

Here's a crazy example: if the value of a company increases by $1 million, a male executive will earn north of $17,000. Women see 10% of that, or a $1,670 boost.

Moreover, men set up their compensation plans in a manner in which they can't really lose. Women lose either way. A 1% drop in the value of the firm leads to a 63% decline in wealth for female execs. Men see just a 33% drop. On the other end of the spectrum, a 1% increase in firm value nets men a 44% boost in wealth. For women, it's just 13%.

The problem, it seems, is that the old boy's club culture still exists when it comes to pay. The Fed researchers found that men often play the role of "entrenched managers" who are able to set their own terms. Women, with typical weaker networks, don't have the leverage necessary to do the same, the paper suggests. The study even controlled for the fact that female executives tend to be younger and hold lower ranking titles.

So what can be done? The authors suggest transparency, which is something Wall Street embraces at its top rung - the C-level is forced to show their hand - but most business heads and other top executives can keep their cards close to the vest.

The study comes on the heels of a similar report that found women who work in commercial and investment banking make nearly $12,000 less than men in comparable situations.