Politics and Gender in the Executive Suite

Harvard Law School John M. Olin Center Discussion Paper No. 1029

41 Pages Posted: 26 Mar 2020 Last revised: 31 Mar 2020

See all articles by Alma Cohen

Alma Cohen

Harvard Law School; Tel Aviv University - Eitan Berglas School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); National Bureau of Economic Research (NBER)

Moshe Hazan

Tel Aviv University - Eitan Berglas School of Economics; Centre for Economic Policy Research (CEPR)

David Weiss

Tel Aviv University - Eitan Berglas School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 18, 2020

Abstract

We investigate the relationship of CEOs' political preferences (as reflected in their political contributions) with the prevalence and compensation of women in leadership positions at U.S. public companies. We find that CEOs who favor the Democratic Party (“Democratic CEOs”) are associated with the presence of more women in the team of non-CEO top executives (“the executive suite''). To explore causality, we use an event study approach and show that replacing a Republican CEO with a Democratic CEO is accompanied by an increased female representation in the executive suite. To further explore causality, we examine whether CEO political preferences are associated with gender diversity in the boardroom and find no such association. This lack of association is consistent with CEOs’ preferences having less influence over gender diversity in the boardroom than the executive suite because CEOs have less power over the appointment of directors who supposed to supervise the CEO than over that of executives reporting to the CEO. Finally, examining the gender gaps in the level and performance-sensitivity of executive pay documented in the literature, we find that they are driven by companies headed by Republican CEOs and disappear or at least diminish under Democratic CEOs.

Keywords: CEO, Executive Suite, Gender Gap, Political Preferences, Compensation, Performance-Sensitivity

JEL Classification: J16, J30, J33, J71, K00, M12, M14, M51, M52, G30

Suggested Citation

Cohen, Alma and Hazan, Moshe and Weiss, David, Politics and Gender in the Executive Suite (March 18, 2020). Harvard Law School John M. Olin Center Discussion Paper No. 1029, Available at SSRN: https://ssrn.com/abstract=3556713 or http://dx.doi.org/10.2139/ssrn.3556713

Alma Cohen (Contact Author)

Harvard Law School ( email )

Cambridge, MA 02138
United States
(617) 496-4099 (Phone)
(617) 812-0554 (Fax)

Tel Aviv University - Eitan Berglas School of Economics ( email )

Ramat Aviv, Tel Aviv, 69978
Israel

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Moshe Hazan

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

HOME PAGE: http://moshehazan.weebly.com/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

David Weiss

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel

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