Thursday, 29 March 2012: 8:50 AM
Based on a panel of new and old economy US firms over the period of 1992 to 2004, we examine if the CEO gender affects firms performances and firm risk level and if the compensation packages that boards give to women CEO have less risky components than men CEO. We also investigate if the factors that explain executive compensation for women versus men CEO are same. Furthermore, we identify the factors that explain the above average performance of some women CEO compared to others CEOs. Our results reveal new insights: on average, the gender of the CEO matters in terms of firm performances, but not in new economy firms; when CEO is a women the firm risk level is smaller than when CEO is a man; boards are not attending the risk aversion differences between men and women CEO when they design the compensation packages, because they award women CEO practically the same proportions of risky compensation components as they give to men CEO. Finally we find that the factors that explain executive compensation in new and old economy firms are different and gender is an important factor to explain variations in executive compensation.