DW: Alluring salaries for women in executive positions


The number of women in leading positions in large German companies is growing slowly. But when a woman takes a staff position, she gets paid better.

Everything shows that the pressures bring results. Following the passage of the second law on staff (FüpoG) in August, the number of women on the boards of large German companies has been steadily increasing. The law requires enhanced representation of women in companies with more than 2,000 listed employees, who have more than three members on the board and who are equally represented by employers and employees on the company’s supervisory board. These companies should therefore take care that at least one woman participates in the board of directors. In practice, this clause concerns 66 large companies.

Anyone who does not comply with this legislation is required to submit a substantiated justification for the absence of women from the board, otherwise they face a fine. The requirements of the law force large companies to change tactics. For example, the Porsche car industry, which until now had only men on the board, allowed a woman to rise to the top of the hierarchy for the first time last summer. This is Barbara Frenkel, now in charge of the supply of materials and raw materials.

18% the percentage of women in top positions

Official data are available only for companies on the DAX 40 stock index, which is considered the elite of entrepreneurship in Germany. In September, when the DAX expanded to include 40 listed companies instead of 30, as in the past, the percentage of women on the board was 17.4%. According to calculations by the Albright Foundation, which promotes the participation of women in executive positions, the percentage has increased slightly to 18% in a few months. This means that 44 women are already on the boards of large companies. Another three have been appointed, but have not yet taken office and are not recorded in official statistics. Rarely, for the time being, are companies like Airbus, Daimler and Allianz that have (or will soon have) not one, but three women on the board.

“Legislation has worked,” said Ania Sheng, a professor of economics at the Essen School of Business Administration (FOM) and vice president of the Women in Staff Initiative (Fidar). As she points out, quotas always promote the number of women in important positions, this is evident not only in the private economy, but also in public enterprises. However, much remains to be done. Half of the new listed companies on the Frankfurt Stock Exchange do not have a single woman on the board. Companies such as Brenntag, Delivery Hero, Hello Fresh, Linde, MTU, Sartorius and Symrise are run exclusively by men.

As an excuse, many companies point to the lack of “suitable candidates”. A real difficulty, of course, is that since women are not promoted to the immediate lower echelon of the board, there will obviously be no women to make the final leap to the top of the hierarchy.

Women earn more

This situation will definitely change, says Ania Sheng from the Fidar initiative for the promotion of women in the business hierarchy. She points out that 50% of the members of the boards are graduates of Business Administration schools. Many women attend these schools today. So in the future, companies will not be able to so easily put forward the reason for the lack of candidates.

An unexpected development: those women who reach the top of the hierarchy may be very few, but when they do, they are paid better than men in similar positions. So far there has been talk of a gap to the detriment of women, both in wages and pensions. So how is this new development explained? “It’s just a matter of supply and demand,” said Vibke Ankersen, director of the Albright Foundation. “In order to respond to the pressures that exist in public, companies must look here and now for suitable candidates with high professional training, which of course must be paid accordingly.”

The remuneration of women at the highest levels of the hierarchy is examined every year by the consulting company EY. Data for this year have not yet been published. For 2020, however, the relevant research shows that women in leading positions have expanded the salary lead over men in the companies participating in the DAX, MDAX, Tecdax and Sdax indices. Specifically, the incomes of women in top positions increased by 8.2% (on average) reaching 2.31 million euros, while for men in respective positions of responsibility increased by only 1.6%, reaching 1.76 million . euro. Revenues are likely to increase further in 2021, as many businesses look forward to a great year. However, the comparative study does not include the position of the head of the board of directors. It probably would not make sense, as until May 2021 there was not a single woman head of one of the top 40 companies in the Frankfurt DAX index. It all started with Belen Garrigio, who now runs the pharmaceutical company Merck.

Brigitte Salts

Edited by: Giannis Papadimitriou

Source: Deutsche Welle

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Source From: Capital

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