Women execs earn Rs 85 for every Rs 100 earned by men: IIMA study

Senior women executives earn an average of Rs 85 for every Rs 100 earned by their male counterparts, a study on gender balance in top organisations found

Breaking the corporate glass ceiling in India doesn’t guarantee women pay parity. Senior women executives earn an average of Rs 85 for every Rs 100 earned by their male counterparts, a study on gender balance in top organisations by an Indian Institute of Management Ahmedabad (IIMA) faculty has found.

Titled “The Glass Ceiling: Research Report on Leadership Gender Balance in NSE 200 Companies”, the study has found that the average compensation paid to senior women executives was Rs 1.91 crore as against Rs 2.24 crore for men.

IIMA’s Promila Agarwal, an associate professor in human resource management, carri­ed out the study under the aegis of the Arun Duggal ESG Centre for Research and Innovation at IIMA, supported by ICRA Chairperson Arun Duggal.

The study defined women directors (WD) as those included in the board of directors, women in top management (WTM) as those among the top 10 individuals in a company based on salary drawn, and women senior executives (WSEs) as those earning more than Rs 1.02 crore per annum including top management.

The study contacted all the NSE 200 companies, and also NSE and IIAS (advisory firm), seeking information on senior executives earning above Rs 1.02 crore. As many as 124 companies res­ponded. From these, all the 15 PSUs were excluded in the study due to exemption from compliance of Section 197 (Chapter XII) of the Companies Act, 2013, which prescribes the maximum ceiling for payment of managerial remun­eration by a public company. As a result, the stu­dy finally included data from 109 firms and 4,146 executives for 2021, and excluded 99 executives whose gender information was not available.

The study found that the pay gap widened as women advanced in their careers. While the women at an individual contributor level earned 2.2 per cent less than the men, the pay gap inc­reased to minus 3.1 per cent for manager/supervisor, minus 4.9 per cent for director and minus 6.1 per cent for executive.

The percentage of WTM (5 per cent) and WSEs (7 per cent) was found to be significantly lower than the percentage of women on the board of directors (16 per cent).

The number of women directors has inc­reased from 4.5 per cent in 2014 to around 16 per cent in 2020 due to regulatory requirements.

As a keynote speaker, K V Kamath, former chief, New Development Bank of BRICS Coun­tries, and former non-executive chairman of ICICI Bank, said that the first step towards gender balance was in recruiting in a gender-neutral manner on the basis of merit. Besides, not just men but even women should be put in cross-functional roles even as assumptions and stereotyping among males are shed, said Kamath.

Indra Nooyi, former chairperson and CEO, PepsiCo, said organisations need to build a critical mass of women with performance records and then begin to remove bias among male em­ployees. “You cannot teach inclusive behaviour in companies if you don’t have enough women in the organisation to practise upon,” she added.

As a way forward, Duggal gave examples of ICRA that has 50 per cent WDs and organisations like Accenture India and Unilever that have set a goal of reaching 50 per cent gender balance by 2025. “Each company should establish diversity goals for gender balance at various organisational levels for 2025, 2030 and 2040 as compared to current levels,” said Duggal.

According to Duggal, a diversity action plan should include diversity councils, diversity cultu­ral training, increased women in­t­ake, family friendly policies like increased maternity and pa­t­ernity leave, child care facilities and allow­a­nce, spouse job considerations for transfer and mentorship and support from the organisation.

Business imbalance

• Only three of 109 companies studied, Cipla and Trent Ltd and HUL with three women in top management (WTM)
• Eight, including Biocon, Castrol India, Cummins India, Kotak Mahindra Bank, Piramal Enterprises and Titan Company, had two WTM each
• 21 companies had only one WTM each, while 76 did not have any
• Big companies with the highest percentage of women senior executives included HUL (22 women or 19%), followed by Kotak Mahindra Bank 
• (26 or 18%), HDFC Bank (18 or 10%), ICICI Bank (14 or 9%) and L&T Infotech (40 or 8%)
• HDFC Life and Syngene International had four women directors (WDs) each
• 10 companies including Asian Paints, Bharti Airtel, Cipla, Piramal Enterprises, Lupin, Titan Company and UPL had 
• 3 WDs each
• Financial services firms had 40 WDs and 11 WTM, while consumer goods had 22 WDs and 6 WTMs, implying that an increase in share of women at the board did not yet lead to a significant increase in the share of women in top management
• Financial services had the highest number of WSEs at 82, followed by IT (74), consumer goods (34), pharma (20) and consumer services (14)
• Common functional roles where more WSEs were found included finance (40), HR (28), IT (25), operations (24) and marketing (20)

This report has been updated to incorporate latest information.