Best-paid executives: The gender gap exaggerated

Women are achieving more and making more at the highest levels, but still falling far behind their male counterparts.

By Jessica Dickler, staff writer

NEW YORK ( -- Last year women made impressive strides in the corporate world, snagging the corner office at more Fortune 500 companies - 13, up from 10 the year earlier - and racking up impressive paychecks.

Indeed, Zoe Cruz, co-president of Morgan Stanley (Charts, Fortune 500), took home $30 million in total compensation last year, making her the best-paid corporate woman, according to Fortune's annual list. That's almost $9 million more than she made the previous year, when she was No. 5 on Fortune's list, and almost $4 million more than the best-paid woman (Safra Catz) made last year.

Morgan Stanley's Zoe Cruz earned $30 million last year, making her the best-paid corporate woman. But the best-paid male executive made more than 4 times more than that.
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Equilar Inc., a Redwood Shores, Calif.-based compensation research firm, calculated the results for Fortune.

Holding steady in second place for two years running is Susan Decker, CFO of Yahoo! (Charts, Fortune 500), who brought in $25 million in 2006, up slightly from $24.3 million the year before.

Other members of the top 25 for the second year in a row include Meg Whitman, president and CEO of eBay (Charts, Fortune 500), whose $11 million paycheck puts her at No. 8, and Andrea Jung, chairman and CEO of Avon (Charts, Fortune 500), who earned $10.7 million and ranks No. 10.

But while women are achieving more and making more, they're still falling far behind their male counterparts at the top.

Decker, for example, only made about one-third of what the search firm's chairman and CEO Terry Semel brought in. Semel earned $71.7 million in 2006, according to Equilar, and that hefty payday landed him third on Fortune's list of best-paid executives overall. Semel jumped up from No. 5 the year before, although his stay in the top 3 could be brief - he resigned from Yahoo in June.

The highest paid executive overall was Bob Nardelli, former CEO of Home Depot (Charts, Fortune 500), who collected a whopping $133.7 million in 2006 - $98.5 million of it in severance. In second place is Tom Freston, former CEO of Viacom (Charts), whose hefty $71.6 million severance package contributed to a $78.3 million payday. No. 4 Henry Silverman, former chairman and CEO of Cendant, also collected big severance: $62.5 million out of a total $64.6 million.

Other members of the highest-paid club include: Bob Simpson, CEO of XTO Energy (Charts, Fortune 500), who made $59.5 million; Lloyd Blankfein, CEO of Goldman Sachs, who made $54.3 million; and Occidental Petroleum (Charts, Fortune 500) CEO Ray Irani, who made $52.1 million.

Not to mention Angelo Mozilo, the CEO of Countrywide Financial (Charts, Fortune 500). He made $43 million last year, according to Equilar, putting him at No. 13 among the best paid. But he's recently come under fire for having cashed in $138 million in stock options over the past year, selling before the struggling mortgage lender's stock took a nosedive.

Altogether, the top 25 highest-paid men made $1.3 billion in 2006, 4.35 times more than the top 25 best-paid women. And no woman cracked the ranks of top 25 highest-paid executives overall -- 25th on that list was Alan Schwartz, president and co-COO of Bear Stearns, who earned $37.3 million last year.

Indeed, Cruz, the top-earning woman, made just 22 percent of what the No. 1-ranked male executive, Nardelli, earned - a far greater discrepancy than the 75 percent managers and professionals overall experience.

"Women don't seem to be able to get on that same bandwagon," said Vicky Lovell, director of employment and work life programs at the Institute for Women's Policy Research in D.C.

"Women at (the highest) level face the same kinds of obstacles that women do throughout the workforce but there may be a more cumulative effect," Lovell explained.

That's due, in part, from the compounded impact of being offered less in compensation and not being given same opportunities over the course of a long corporate career, she said.

"These factors add up the higher these women climb up the corporate ladder," Lovell added.

To determine the best-paid women and men executives, Equilar looked at companies with more than $1 billion in revenues that filed proxies as of Sept. 1. Equilar included base salary, bonuses, the present value of option grants, restricted stock awards, long-term incentive-plan payouts, and severance payments where relevant.

Some of the discrepancy between paychecks for men vs. women at the top may be explained because 2006 was a stellar year for Wall Street and the oil and gas industry, which tend to be male-dominated fields.

Energy majors like XTO Energy raked in record profits launching Simpson into the fifth-highest spot on Fortune's 25 best-paid men list. Meanwhile, four male executives from two banking corporations (Goldman Sachs (Charts, Fortune 500) and Merrill Lynch (Charts, Fortune 500)) sit within the top 10 slots.

Sallie Krawcheck, who earned $10.6 million last year as Citigroup's CFO was the only other woman in banking besides Cruz to make the top-paid women list. Krawcheck has since been named CEO of Citi's Global Wealth Management division.

Another reason for the disparity between executive men and women's paychecks can be explained by the fact that women managed smaller companies and were less likely to be CEO, chair or company president.

"Women at the CEO level face more barriers to advancement," said Lois Joy, research director at Catalyst, a nonprofit that seeks to advance women in business.

"It's more competitive in the Fortune 500 so we would expect the intensity of those barriers to be stronger."

In fact, eight out of 10 of the highest-paid executives overall were CEOs of Fortune 500 companies, vs. four of the 10 best-compensated women chief executives.

"Women still have a long way to go in those highest-ranked companies," Joy said. Top of page