Last week, the share price of Burberry, the luxury fashion company, scored a record high, and the company’s market capitalisation exceeded £5bn ($8.3bn), earning Angela Ahrendts, its chief executive, a maximum bonus of £1.8m.
While few could deny Ahrendts is doing a great job – albeit in the super-hot luxury sector, which is tipped this year to achieve double-digit growth – there are still murmurings about compensation.
A much-discussed article published by Bloomberg News last year claimed that US women chief executives earned 40 per cent more than their male peers, based on a comparison of the average total pay of the 16 women chief executives of Fortune 500 companies with the average total pay of the 484 male chief executives.
Graef Crystal, a pay expert who analysed the data for Bloomberg News, said that “compensation committees are saying we don’t want to have any trouble” over underpaying women, “so if we err, let’s err on the side of giving them too much”.
The suggestion that compensation of women executives is somehow less based on market forces and more on gender politics has been a red rag to feminist bulls ever since the article appeared.
It was quickly pointed out that comparing chief executive pay in any meaningful way had to take into consideration the size, complexity and performance of the companies involved. The list of women included some of the highest-paid executives in the Fortune 500 – Yahoo’s Carol Bartz and Kraft’s Irene Rosenfeld.
Arguably, the pay package of Indra Nooyi, chairman and chief executive of PepsiCo, quoted as $10.1m by Bloomberg, seems small for someone who runs a leading US brand with a market cap of $105bn, and compared with the $21m paid to Jim Skinner, chief executive of McDonald’s.
Lynn Laverty Elsenhans, chief executive of Sunoco, the US refinery, was last year reported to be paid $1.5m, while Greg Goff, chief executive of Tesoro, a rival refinery, received $18.6m.
Are women at the top paid too much, too little or – just like their male peers – a market price?