MBA students fight the gender pay gap—one offer at a time

While she was working at Microsoft several years ago, Christina Chavez, MBA 19, logged into an anonymous online job compensation board called Blind and was shocked to see the tech gender pay gap in plain sight.

“People were posting their data, and we started saying ‘whoah’ there’s some major differences in how our colleagues are getting paid,” said Chavez, who will start working at Google after graduation.

With these numbers top of mind, pay equity and transparency was a top goal for Chavez when she arrived at Berkeley Haas. She put that priority into action last fall when she and classmate Jack Anderson—a fellow member of the student-led Haas Gender Equity Initiative—set up a new spreadsheet where classmates can share all the details of their compensation packages. (The spreadsheet is managed by Jordan Sale, MBA 19, and founder of startup 81cents, which provides salary support for women during job negotiations.)

Using salary data and research provided by Berkeley Haas Prof. Laura Kray, the students created a Haas Wage Gap Infographic, which shows that women who graduated from Haas last year earned 96% of what their male peers earned. But the more concerning finding was that for alumni with greater than 10 years experience, the salary gap between men and women widened.

“We earned 96 cents to the dollar in the last MBA class and people were like ‘yeah we’re approaching equity,’ but this gap grows over time,” Chavez said.

Christina Chavez
Christina Chavez 

Moving toward transparency

The Haas students launched this project to expand what’s offered through CMG Bears —the Haas Career Management Group’s tool that allows MBA students to anonymously enter and look up salary data based on company and job role. The database offers a wealth of information, but doesn’t track salaries by gender.

Abby Scott, assistant dean of MBA Career Management and Corporate Partnerships, who worked with the students to provide historical data for the project, said the long-term salary gap is a concern. She added that Haas is working to add gender identification to CMG Bears to provide as much context to the salary data as possible.

“I don’t think that we know the real cause of the long-term pay gap, but we are advising students to make sure they’re negotiating salary and thinking beyond compensation—and we speak frequently to women about both the importance of negotiation and taking on leadership roles,” she said.

By many estimates, American women working full time earn about 80% to 85% of what men earn (a statistic that varies by race/ethnicity and how it’s measured). Kellie McElhaney, founding director of the Center for Equity, Gender, and Leadership (EGAL) at Haas, said transparency is a critical weapon in the fight to close the pay gap. “Knowledge is power,” she said, noting that a growing group of companies such as Salesforce, Gap, and Google have been moving in the right direction, toward public reporting of compensation.

In recent research, Prof. Kray and Margaret Lee, a postdoctoral research fellow sponsored by the Center for Equity, Gender, and Leadership (EGAL), looked at the Berkeley Haas alumni surveys of full-time professionals who graduated between 1994 and 2014. The researchers found that while men’s base salaries were on average about 8 percent higher than women’s, it’s in the bonuses, share values, and options—which tend to not be tracked as publicly as salaries—where the men’s salaries outpaced women’s. Overall compensation for Haas women MBAs averaged about $290,000, or about 66 percent of men’s $439,000 average. Kray and Lee also linked part of the pay gap to the fact that men manage larger teams than equally qualified women.

Tricky negotiations

It’s the company shares and stock options that are trickier in negotiations and not often tracked, Anderson said, adding that for some reason, male MBAs appear to fare better in those areas after graduating from Haas.

Jack Anderson
Jack Anderson

“That’s the thing that jumped out to me: how much of the offer goes beyond base compensation [salary and signing bonus],” he said. “So many companies are offering other compensation, RSUs (restricted stock units), and stock options. It drove us to think about how important it is for people to understand this and to get some basis for comparison. We need to work on how we display that information for people.”

But that might not be enough. In their research, Kray and Lee found that the problem goes far deeper than negotiation skills, pointing toward a bias about leadership that leads men to be put in charge of larger teams than equally-qualified women, and get paid more because of it.

McElhaney agreed that better negotiating skills will only go so far—if it comes down to the basic fact that managers just want to pay men more and that women are facing entrenched bias.

“You can change processes but the long-term problem is people’s individual biases,” she said. “If they believe things like men do a better job at leading big teams, or that women bosses are unlikable, this is unconscious and conscious bias at work.”

To access the new spreadsheet, students must agree to share their own salary data anonymously, including their preferred gender, job title and function, years of post-college work experience, geographic location of the job offer, and compensation details, including base salary, bonus, and any equity package offered. All students are asked whether they negotiated their compensation— and if so, to include the initial and final offers. So far, 58 students in the 2019 MBA class who have received job offers have added data to the sheet—split about evenly between men and women.