While the top floors of public companies in Germany are becoming more female, women are in the minority at listed companies. How does this affect salary?
Despite declining remuneration, women at the top level of DAX companies also earned more than male board members last year. This emerges from a study by the auditing and consulting company EY. On average, men are in the lead among the companies in the MDax and SDax stock market indices.
With a share of 21.8 percent, women are not only more represented on the boards of the 40 DAX companies than in companies in the other stock market indices, but they have also earned more on average than men since 2015. Last year, female managers earned an average of around 3.2 million euros, while their colleagues earned around 3.08 million euros. Both women (minus 7.3 percent) and men (minus 8.7 percent) recorded salary losses.
“The war in Ukraine, supply chain problems and sharp increases in energy prices have made many optimistic forecasts a waste of time,” explained EY partner Jens Massmann. Variable salary components such as bonuses, the payment of which is linked to the achievement of certain goals, played a particularly important role in DAX companies. The losses were therefore correspondingly significant.
New board members often earn less
In the MDax of the 50 medium-sized stocks, male board members once again earned around 1.59 million euros, more than their female colleagues, who earned an average of around 1.54 million euros. The proportion of female managers on the top floor was 14.3 percent.
In the 70 smaller companies in the SDax – with a proportion of women of 9.9 percent on the top floor – the total compensation of female managers was on average behind the earnings of managers for the first time since 2018. According to the information, women received around 931,000 euros (minus 20 percent), men received just under 1.1 million euros (plus 11 percent).
Massmann cited the change in the board of directors as a key reason. “The remuneration levels for new appointments are generally lower than for board members who have already held the office for a long time.”
The so-called total direct remuneration consisting of fixed salary and variable components of board members who were in office for the entire financial year was analyzed. CEOs are not taken into account because there are still very few women at the top.
Analysis: More women in top echelons of public companies
But according to an analysis, the top floors of public companies in Germany are also becoming more female. As of January 1, 2023, the proportion of women on the supervisory boards of the 262 largest federal and state holdings rose by 1.3 percentage points to 37.1 percent compared to the previous year.
This emerges from an evaluation by the organization “Women on Supervisory Boards” (Fidar), which was available to the German Press Agency. In the top management bodies, the proportion grew by 2.5 percentage points to 25.7 percent. Despite these increases, parity is still a long way away.
It is important to “appoint more women to leadership positions, to supervisory boards, management and the highest levels of management,” said Women’s Minister Lisa Paus (Greens). “All-male boards and management levels should be a thing of the past as soon as possible.”
A minimum participation requirement has been in effect since August 1, 2022. The regulation requires federal government majority holdings with more than two members in the management body to have at least one woman or one man.
However, according to Fidar, this has been slow to have an impact in the public sector. “Public companies have long rested on their advantage over the private sector,” said Fidar founding president Monika Schulz-Strelow.
“But the development of listed companies shows that with appropriate pressure and greater public interest, more progress is possible.” Against this background, the development of federal and state investments is not satisfactory.
Source: Stern
