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Accusations of discrimination circulate around executive’s pay

The internet is abuzz with accusations of discrimination by General Motors after Securities and Exchange Commission public filings revealed the salary of their new CEO. The CEO of the company, Mary Barra, is the first woman to head up the American auto giant. First praised as a long-overdue progression, the appointment is now garnering criticism since the base pay of Ms. Barra ($4.4 million per year) is about half of what her predecessor, Dan Akerson, earned ($9 million per year).

The key difference is that Ms. Barra is also eligible for long-term incentives tied to the company’s performance that could earn her up to $10 million in additional compensation over time, whereas her predecessor was apparently not eligible for that type of bonus. GM says that this difference shows that they are not paying the new CEO less, but rather structuring her pay differently.

On the other hand, tying the bulk of her compensation to company performance could be evidence of the requirement of female executives to outperform their male peers in order to rise to the same level of prestige and compensation.

The most important thing to remember when considering a story like this is that gender discrimination can happen at any level of the corporate ladder and is illegal no matter where one is stationed. Women are entitled to equal pay for equal work even though for many women that is not a reality. Nationwide women continue to earn about 77 cents for every dollar than a man makes.

Source: Christian Science Monitor, “Gender pay gap: GM defends compensation package for CEO Mary Barra,” Mark Guarino, Feb. 11, 2014.

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