Professor Amanda Marino Pay Gap Research

An SDSU accounting professor was part of a research team that studied salary differences among nearly 3,500 non-profit organizations.

Amanda Marino is an assistant professor of accounting at SDSU’s Charles W. Lamden School of Accountancy

Recently published research indicates that while women executives in non-profit organizations (NPOs) earn 8.9% lower total compensation than men in similar positions, the compensation gap narrows when there is limited opportunity for negotiation or when the organizations encourage females to engage in salary negotiations. 

Amanda Marino, an accounting professor at the Charles W. Lamden School of Accountancy in the Fowler College of Business at San Diego State University, along with fellow researchers, Andrew Finley from Claremont McKenna College and Curtis Hall from Drexel University, analyzed the salary information from 21,764 publicly available from the 990 form tax returns for various NPOs filed between 2008 to 2012. They published their findings in the Review on Accounting Studies, which posted the research on August 30, 2021. 

Women Executives Earned Nearly 9% Less Than Men
The study looked at the salaries and genders of executives from 3,494 NPOs, including those holding CEO, CFO, COO, general counsel and chief marketing executive positions, and their initial findings indicated that women in executive positions within NPOs earn 8.9% less than their male counterparts. 

The researchers especially noted that NPOs must disclose the process used for determining CEO compensation in the schedule J section of form 990, which offered insight into how executive compensation was dispersed. This requirement, they observed, may create incentives for NPOs to limit pay disparities in the executive ranks compared to executives in for-profit companies, where the pay gap was determined to be 13%. While the gender pay gap for NPO executives was less than for-profit companies, the gap was still significant enough for the researchers to try to determine the possible cause behind the disparity. 

Factoring in Negotiation and Risk
During their analysis, the researchers found several conditions inherent in determining salary inequities, most of which had to do with the executive’s willingness to negotiate compensation and environmental factors within the NPO itself that may limit one’s ability to negotiate salary levels. For example, they observed that when NPOs were facing a tighter labor supply, male job candidates were more likely than women to negotiate their salaries, which generally resulted in greater compensation packages. They also noted that women seemed more risk-averse and less likely to agree to compensation based on incentives (such as a bonus for reaching an organizational goal) compared to their male counterparts. 

In addition, the researchers pointed out that a previous study had indicated that when increased donor scrutiny and government processes were applied, the NPOs’ executive compensation was lower. Consistent with these findings, the researchers found that NPOs who are more reliant on donor funding were more sensitive to executive compensation (out of concern for donor backlash). Taking this a step further, the study indicated a reduced pay gap for executives within donor-reliant organizations compared to those receiving substantial government grants. This resulted in a lesser pay gap, but also accounted for lower executive salaries overall. “We found that the pay gap was only 5.4% among donor-reliant organizations which was a 46% increase in pay equality compared to non-donor reliant organizations,” said Marino. “These organizations tended to have more restraints on executive compensation with less room for negotiation, which confirmed the previous research findings.”

Impact of Women Board Members
The researchers also noted that NPOs with women on their boards or female CEOs also tended to have smaller pay gaps (3.2%), suggesting that “female leadership increases female employees’ willingness to negotiate, thus mitigating benefits that men disproportionally accrue.”

The Defining Factor
In conclusion, the study noted that all workplace organizations have been under increasing pressure to balance their workforces and correct pay inequalities. And while there are several reasons for salary disparities, one factor seems to offer the strongest explanation for the difference in pay between men and women. 

“Our analysis suggests that male executives’ increased willingness to negotiate partly explains the observed pay gap,” said Marino. “In settings that constrain executives’ opportunities to negotiate, or increase women’s willingness to negotiate, we find a smaller gender pay gap, while we noticed larger pay gaps in settings more conducive to negotiating compensation. Employers who are sensitive to gender pay disparities should be aware of, and be willing to remedy, the factors surrounding salary negotiations within their organizations,”

Note: The authors received no external financial support for the research, authorship, or publication of this research.