How do female CEOs affect corporate pay dispersion? The perspective of risk aversion and competition avoidance

Extant gender-compensation literature has dominantly held a passive perspective on female leaders' compensation contracts. However, scant attention has been paid to the proactive aspect of this gender-compensation relationship. This study fills this gap by incorporating female leaders' initiatives and integrating their proactive preferences to establish a link between gender and corporate pay dispersion. We first develop the theoretical argument that firms with female CEOs (SHE'-E-Os) have low pay dispersion due to their behavioral preferences—risk aversion and competition avoidance. Furthermore, we investigate how these preferences change over time—heterogeneous life-cycle stages—which provides a long-term perspective further enriching our understanding of the gender and organizational compensation structure. Using a 1992–2014 panel dataset from multiple sources, we find SHE'-E-Os are negatively associated with pay dispersion, particularly in firms during introduction, growth, or decline stages, as opposed to mature stages. Implications for literature on female leadership and pay dispersion are discussed.