Pay Gap Between Women & Men CEOs Doubles

Mumbai: Women executive directors (EDs) earned 45% less than their male counterparts in the last fiscal year as male CEOs and CXOs took home bigger salary increments. Salaries of women EDs remained near stagnant, data revealed.

An analysis of PrimeDatabase numbers showed the gender pay gap between male and female directors doubled in FY19 from what it was a year ago as the average salary of male EDs rose 8% while it fell marginally (-0.12%) for women. The findings are based on the latest annual reports of 1,747 companies listed on the NSE and compiled by nseinfobase.com, run by PrimeDatabase. Experts attribute this to the strong bias against women CXOs in the corporate world, affecting career growth and promotions. Simply put, men choose more men.

“As you rise up the corporate ladder, particularly as one reaches the middle-management level, there is an unfavourable bias against woin men in promotion,” said Kiran Mazumdar-Shaw, chairperson, Biocon. “There is a natural selection of more men because the people deciding are also mostly men. The pay parity problem starts at that stage.”

Data also suggest that wage inequalities become more blatant as the years of work experience rise. According to the Monster India Wage Index Report 2018, men and women with 0-2 years of tenure earned almost identical median wages (`121.25 and `120.28, respectively). In the tenure group of 3-5 years of experience, the pay gap was a moderate 3%. However, the tenure group of 6-10 years, men earned a 13% higher median wage than women, while men with 11 or more years of tenure earned 10% more than women.

This needs to change, said Harsh Goenka, chairman, RPG Enterprises. “I always thought one does not pay salary based on gender,” he said. The pay disparity “shows the mindset and that needs to change. Companies need to have multidimensional approach in hiring, retention and development of women”. Sitharaman reiterated that it was too early to scrap long-term capital gains tax (LTCG) on equity, as had been sought, because the government hasn’t had enough time to assess how much revenue it can collect.

“LTCG was introduced in 2018 and by definition it is for one year and that year both the markets and the economy have faced their challenges,” Sitharaman said. “I have not had a reasonable chance to assess what I could get out of LTCG as it stands now, but the clamour is to withdraw it even before I have burnt my fingers. The reason why we didn’t go that far on LTCG because we want one-year of reasonable response to it.” The government had hoped to generate `40,000 crore annually from the levy but collections have fallen well short of this.

Industry participants demanded a relaxation on dividend tax, saying that these were now being taxed at 58%. The government scrapped dividend distribution tax (DDT), paid by companies, but made dividends taxable in the hands of investors. Dividend taxes will now be treated like any other levy and the investor can seek credit for it. Foreign investors can now set off half of this (10%) in their home country due to tax treaties. DDT is levied at around 20% on dividends paid by companies to shareholders.

“When DDT was taxed at company level it didn’t work, when it is taxed at shareholder level it is unacceptable, so should dividend be taxed or not? Our plan is to put more money in the hands of the retail investor and let them decide how they want to spend it,” Sitharaman said. Unlike the past instances of providing for a stimulus, the remedies that the budget have provided are “very focused, very clear that it is going in a well chalked out path with a clear intention of spending responsibly in building capital assets,” she said. She pointed out that the rural and farm sector had got attention through a 16-point agenda, startups have been given a boost and infrastructure investments have also been taken up. “The remedy is a considered remedy. I’m sure discerning people will be able to see why it is so,” she said.

Sitharaman said divestment is necessary to get transparency in the working of companies by making necessary disclosures, referring to the plan to sell a stake in Life Insurance Corp. of India (LIC). She added that the government will only sell those companies where it sees no strategic rationale in running them. The finance minister welcomed liquidity measures announced by the Reserve Bank of India for retail customers in general and for MSMEs and realty players in particular at the sixth monetary policy review on Thursday.

Source: Press Reader