Startling data on female employment and pay rates for executive roles suggests that family offices remain dominated by men, but what happens when they reach the top?
Looking for an industry with gender diversity and pay equality? A fascinating new subset of data from the Global Family Office Report 2016 has thrown light on the female C-suite, illustrating why family offices have some way to go in workplace equality - only 19% of executive roles are filled by women. Even lower than this, only 8% of chief executive officers (CEOs) are female. Family offices are not alone in this problem, however, as financial services also experience similarly low levels of female leaders - research from Oliver Wyman in 2016 shows only 8% of CEOs are female.
Why is there such a big discrepancy? The Global Family Office Report has consistently shown that assets under management (AUM) and wage levels are linked. Understanding this relationship is crucial to testing whether female executives are underpaid or not.
There is good news for female family office CEOs. Upon gaining the top spot they tend to be paid more than their male counterparts.
Females are paid marginally more with a take-home pay of $321,400 compared to $315,600 for their male counterparts, even though they are typically managing less assets. One reason why this may happen - those reaching the top may be the most skilled.
Further analysis can look at whether this effect holds in other top positions. For chief investment officers (CIO) the story is less progressive. On average females are paid significantly less than their male counterparts, only $200,000 compared to $283,300. While this may be an eye-opener, showing evidence that females are paid less across family offices, a deeper dive into the data suggests otherwise. By looking at the AUM of those family offices we can see that female CIOs are roughly managing half of the assets of their male counterparts. In this case, the lower pay is due to female CIOs being in positions that are currently managing significantly less assets than males.
A similar story emerges by examining the role of chief operating officer (COO). While it is more common that the positions are occupied by females, than other roles, COOs tend to be in smaller family offices. This difference of over $200 million in AUM can explain the $70,000 difference in wages.
In contrast to other positions, female chief financial officers (CFO) manage more assets on average than their male counterparts which is reflected in higher wages - female CFOs earn $18,000 more than male CFOs on average.
While not conclusive, this data helps to uncover the experience of females working within family offices. According to the data, the handful of females that reach the summit are paid fairly. If we want to see family offices become more balanced we will need to see more women in executive roles at the larger family offices.