Gender gap in CEO pay is closing by Paul Hodgson @FortuneMagazine June 3, 2014, 3:40 AM EST E-mail Tweet Facebook Google Plus Linkedin Share icons Two surveys of CEO pay published last week found that median pay for female CEOs was higher than that for male CEOs. The findings were surprising considering that women executives have long earned less than men. The first study, conducted by Equilar for Associated Press, found that women CEOs make $1.2 million annually more than the men —$11.2 million compared to $10 million. The second survey, by Hay Management Consultants for the Wall Street Journal, found that the median pay of 14 female CEOs in its sample exceeded the median pay of male CEOs by an undisclosed amount. While both surveys caution that the small numbers of women CEOs in the sample make conclusions difficult to draw, this is a pretty extraordinary finding. What’s going on? A look at a few of the recently appointed female CEOs might provide an answer. As demonstrated by the appointment of General Motors’ GM new CEO, Mary Barra, sometimes female CEOs are paid as well as or better than their male predecessors. Barra was appointed in January, so the company has not officially disclosed her pay in a proxy statement. It has, however, estimated that her first full-year of pay will be worth $14.4 million. This is considerably more than Dan Ackerson, her predecessor, who earned just over $9 million in 2013. But Barra is not the only one. At General Dynamics GD , Phebe Novakovic earned $19 million in her first year as CEO in 2013. In contrast, former CEO Admiral Jay Johnson, who served in that position from 2009 through 2012, earned $18 million in his last year. Gracia Martore became CEO of Gannett GCI in October 2011. And it almost seems as if her salary has been going down since ever she was promoted. She voluntarily reduced her base salary from $1 million to $900,000 in 2013 and from $950,000 to $900,000 in 2012 . Nevertheless, in her first full year as CEO, 2012, she earned approximately $8.5 million after including other compensation, compared to former CEO Craig Dubow, who earned an annualized amount of only $2.7 million, excluding his severance and the bump in his pension. Other newly appointed women CEOs earned virtually the same as their male predecessors. In 2012, his last full year as CEO of Duke Energy DUK , James Rogers made $8.7 million. An annualized estimate of new CEO Lynn Good, who was appointed in July last year, based on the compensation package outlined in the proxy, would give her total pay of around $8.6 million. Another of the highest paid women CEOs was Marissa Mayer, CEO at Yahoo YHOO , who received $36.6 million in her first year in the job. While that’s an extremely large amount of money, it’s less than the sign-on package was for her predecessor. Except, of course, that her predecessor was also a woman – Carol Bartz. But why wouldn’t female CEOs earn as much as, if not more than their male predecessors? For example, General Dynamics’ peer group – the companies it uses to set executive pay levels – included Raytheon, Boeing, Honeywell, and Northrop Grumman when Jay Johnson was CEO. It includes those same companies now that Novakovic is in charge. If pay stays the same at its rivals, General Dynamics would be at a competitive disadvantage if it reduced pay. The company pegs executive compensation to the median of its peers, so if that median went up, its CEO pay would also rise. Lucy Ryan, a company spokesman confirmed, “we do not look at gender in our peer group review.” In addition, in an investor presentation on Wednesday, General Dynamics’ CEO laid out the improvement in the company’s performance from 2012 to 2013. While revenues fell slightly, earnings, cash flow and profits all increased. General Dynamics uses earnings and free cash flow to determine its executive bonuses, and Novakovic’s 2013 bonus was higher than Johnson’s in 2012. Here at least, gender is immaterial. Yet, despite the findings of the two surveys, according to an Institute for Women’s Policy Research survey cited by the WSJ – The Gender Wage Gap by Occupation 2013 – women CEOs still lag behind men. Using a much wider sample than the 300 or so CEOs used by the AP and WSJ, female CEOs only earned 80% of what their male counterparts earned. Even though the gap is closing, this is a wider differential than that found in many other occupations looked at by the Institute. In his 2014 state of the union speech, President Barack Obama said: “You know, today, women make up about half our workforce, but they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment. Women deserve equal pay for equal work.” While the gap may have been closed at some of the very largest companies, President Obama’s “embarrassment” over the gender wage gap is likely to continue for some time.