New research shows that female employees at startups own $0.47 in equity for every $1 owned by male employees. This study, by equity-management firm Carta, reveals the gender pay gap extends far beyond salary.
This ‘other’ pay gap
Five decades after the Equal Pay Act required employers to pay men and women equally for equal work, average salaries are still unequal: Women earn $0.82 for every $1 earned by men.
But, by focusing on a subset of 180k employees and 15k founders at 6k private, equity-granting companies, this research illuminates another pay gap: equity.
While women make up 35% of equity-holding employees, they only hold 20% of the equity. For female founders, it’s worse: Founding women had $0.39 in equity for every $1 of man-quity.
Inequity (noun): The lack of fairness or justice
Since equity is often more valuable than salary when a startup succeeds, this equity gap is a trap that keeps on taking.
In some cases, equity discrimination is blatant: At certain tech companies, female hires got half the equity for the same role as male peers despite identical salaries. But Carta’s CEO (a guy) explains that women are also underrepresented in high-equity leadership roles.
To address this leadership vacuum, California recently proposed a law requiring public companies — 20% of which don’t have women on their boards — to get at least 1 woman on board. But for now, it’s up to startups to do a better job of hiring women at every stage of growth.