A miniature couple standing next to a pile of coins with a linear graph. The concept of the wage gap between men and women, which grows larger over time.

Despite company efforts, gender pay discrimination still exists, according to new award-winning research

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GAINESVILLE, Fla. – You may think of Tuesday as the day between Monday and Wednesday, the second day of the work week, or just another day standing between you and the weekend. While the significance of a Tuesday might not seem like much, it actually plays a substantial role in the finances of many working women.

Aaron Hill

Warrington College of Business Assistant Professor of Management Aaron Hill.

According to the National Committee on Pay Equity, Tuesday is the day that women must work into the next week in order to earn what their male counterparts earned the previous week.

“Gender pay discrimination has long been against the law in the United States and many other nations, but a wealth of research suggests women continue to earn less than men in most jobs,” said Aaron Hill, Assistant Professor of Management at the University of Florida Warrington College of Business.

Despite the Equal Pay Act of 1963 requiring companies to pay men and women equally for equal work, today, on average, a woman working full time earns 80.7 cents for every dollar a man working full time makes according to data from the U.S. Census Bureau.

While a number of companies have recognized this persistent inequity and have made significant efforts to close the gender wage gap within their own firms, they haven’t made strides in equalizing all forms of pay, specifically equity-based pay, according to new research from Hill, Felice B. Klein (BSBA ’03) of Boise State University, Ryan Hammond of Pure Storage and Ryan Stice-Lusvardi of Stanford University.

“Organizations have taken tremendous steps to combat such inequities and deserve credit for their efforts,” Hill said. “Yet, we show that even when such efforts result in equal pay across genders in most traditional forms of pay (i.e., salary; bonuses), there continues to be disparities in equity-based pay (i.e., stock grants and stock option grants).”

The researchers, who were awarded Best Convention Paper from the Academy of Management 2019 Annual International Conference for their research efforts, used data from public and private companies that have been recognized as leaders for their gender equality efforts and use equity-based awards as an important component in their employee compensation packages.

In their paper, titled “The road to pay inequity is paved with good intentions: examining the gender pay gap in employee equity-based awards,” the researchers find that female employees received over 20 percent less in the number of equity-based awards and over 30 percent less in the value of equity-based awards than male employees in similar roles. For female employees, this averages to earning more than $11,000 less than their male counterparts in equity-based awards.

Of the equity-based awards given to female employees, the researchers also found that the gender-pay gap exists only in ‘refresh grants,’ meaning awards given to high-performing employees for retention purposes, rather than in ‘initial hire grants,’ or awards given to employees when they are first hired.

“The end takeaways [from the data] are two-fold,” Hill said. “One, salary audits are now fairly common place – but they do not appear to be applied to stock-based compensation with the same vigor, allowing room for possible gender gaps in this form of pay. Two, our findings suggest firms (and people generally, in an experiment) assign stock equally based upon merit/ability. The issue comes on the perceptions of the retention side. Hence, differences in the ‘refresher’ versus ‘initial hire’ grants.

“Overall, our findings shed light on a previously overlooked form of gender inequality in the workplace – equity-based pay – and should enhance our ability to close the pay gap between women and men.”