Why Female CEOs Gave Themselves Pay Cuts While Male CEOs Took Raises

After the last two years of pandemic, economic collapse, and the she-cession, it’s time to return to a topic near and dear to this columns’ heart: entrepreneurship. There is nothing that warms said heart quite as much as the idea of a bunch of ambitious young women out there forging their own paths and transforming the world. There’s excitement, heightened by the sense—even back in the 1990s, when I founded my company—of helping to break new ground. And in the decades since, it’s been a distinct pleasure to watch women like Marissa Mayer, Sheryl Sandberg, Jane Fraser, and Safra Catz rise up alongside a whole generation of female business leaders. But unfortunately, there’s no way to talk about the entrepreneurial spirit in 2022 without also talking about the pandemic and its consequences.

Chief among those consequences, for our purposes, is the she-cession—but not the narrow, technical definition of the word—the slower job recovery for women, which, as I have tracked here, has closely followed the course of the pandemic. That pattern can be seen over and over; women’s employment opportunities decline with each passing wave of infection, most notably following the winter omicron superwave. But, today I want to talk about the other side of the coin: what’s it like for women out there starting businesses?

On the one hand, women are starting more businesses than ever before, at a faster clip than ever before, and—critically—at a faster clip than their male counterparts. At the very same time, female founders continue to face greater and greater challenges even securing startup capital. And there’s more: the pay gap between male and female CEOs has only widened dramatically since the pandemic began.

That last part is the one I want to zero in on. The scandal of companies making record profits during the height of the pandemic while furloughing and laying off employees, already well documented, need not be rehashed here. A gap between what female startup CEOs pay themselves and what male startup CEOs pay themselves existed well before the pandemic—and theories as to why abound. Instead, let’s focus our attention on why, in the last two years, that gap widened from around $5,000 annually to more than $20,000. The answer is fascinating yet not all that surprising: on the whole, female CEOs responded to the pandemic by taking pay cuts, while male CEOs responded by giving themselves raises.

Please, for a moment, consider this sobering knowledge. The economy, you may recall, effectively shuttered for months in 2020. Layoffs came in the millions as businesses across the land struggled to figure out how to retool and adapt. The closure of restaurants, stores, and offices from coast to coast put low-income workers like servers, retail associates, and custodians out of work entirely and immediately, while remote work came during mass school closures and the collapse of the childcare industry, and suddenly managers had to contend with the challenge of employees who also had to care for their children—especially if they were women. More and more, women found themselves shunted aside or marginalized in the workplace by the simple reality that their bosses felt they’d be “too distracted.”

Now, in response to these economic shocks, it would seem the most appropriate course of action for a CEO would be to take a pay cut to minimize layoffs, a course that prioritizes the bedrock of a company: the people who work there and, through no fault of their own, find their world turned upside down. In other words, it’s other-focused, a choice to take a hit for the team if it means minimizing the suffering of someone else and protecting the company’s future. And so many women CEOs took this precise course, but, as it turns out, we did not see their male counterparts do the same. It may be tempting to use this to excoriate the male sex as a whole for being selfish, but wanting to make a lot of money is an endemic condition among the founder class. But, critically, these are not decisions a man is making for a woman; these are what women decided to pay themselves, and that both men and women alike make these decisions in highly gendered ways needs to be discussed, because they reflect values and assumptions inculcated in all of us one way or another since childhood: men provide, women care.

Yes, this is an extremely reductive and wildly outmoded way of thinking, but it has deep, deep roots going back to the dawn of human civilization, and we’ve been soaking in it our entire lives. It permeates us, like soup broth in a piece of bread. For men, success in business is instinctively taken to reinforce their manhood, their virility. For women, it raises questions about who is raising their children, or why they never married, and on and on and on and on. And this conceptual baggage isn’t even necessarily ideological, because the messages come at us from all sides at all times. A man facing an economic downturn that might conceivably reduce his ability to provide makes a gendered but rational decision to take home more money; a woman facing the same economic downturn makes a gendered but rational decision to take a backseat and sacrifice for the proverbial family. Even women who started businesses during the pandemic did so overwhelmingly out of their homes for the purposes of bringing in extra income during a time of economic uncertainty, sacrificing their time to provide on top of the presumed duties of a wife and mother to cook, clean, and care.

It’s been said before that crisis eras tend to reinforce traditional gender roles as people turn to social structures that can seem strong and enduring and perhaps even optimized for hard times. But this is not a social force we are helplessly subjected to. No, these are decisions we all make for ourselves day after day, so we need to know what decisions we’re actually making and consider why we’re making them. Over and over, we, as a society, have chosen to reduce the economic prospects of women.

That is a choice we are making. It is a choice we can stop making, too.