CEOs, Masculinity, and Language

Why are there so few female CEOs? Like the gender pay gap, this question involves potentially controversial ideas such as the acknowledgement that males and females naturally differ in psychological traits and preferences that impact labor outcomes.

What is not in controversy are the facts: females make up less than 10% of CEOs at publicly traded U.S. companies despite comprising about 50% of entry level positions within the same firms. While this number has grown over recent years, especially at Fortune 500 firms where 15% of CEOs are now female (up from 7.4% in 2020 and 3.0% in 2010), there still appears to be a ‘glass ceiling’ that has led to a gender disparity in CEO positions and compensation.

Existing research attempts to explain these facts by focusing on average differences between males and females, arguing that they must be the sources of the differences in labor outcomes. This approach is logical; however, it has not provided a precise explanation for gender disparity in the labor market, nor has it helped resolve the question of whether these labor outcomes are primarily due to outward forces, like differences in the perceived competence of males and females, or inward forces, like self-selection, ie fewer females competing for jobs at the high end of the income distribution. While both likely play a role in the complex matching process within the labor market, our recent working paper provides evidence that perception is an important determinant of CEO status and compensation.

In our paper, we focus on within-gender, as opposed to across gender, differences in males and females. Specifically, we explore how the vocal masculinity and language usage of male and female managers at public US firms are related to their overall compensation and likelihood of becoming CEOs. Our measures of vocal masculinity and language complexity come from over 100,000 audio clips of CEO and CFO speech and earnings call transcripts.

Broadly speaking, the results show that female managers with greater vocal masculinity are more likely to become CEOs, while the opposite is true for males. When it comes to communication, both female CEOs and CFOs use more complex language and speak longer during earnings calls than their male counterparts. Regarding compensation, we find that more masculine male and female CEOs are better paid, while more masculine females secure a greater pay slice, or percent of total executive compensation.

These results are consistent with research in social sciences regarding the perception of vocal masculinity. For example, Wolff and Puts (2010) and Puts et al. (2007) find that vocal masculinity is a robust signal for both physical and social dominance in males, traits related to physical intimidation or fighting ability and the ability to control or dictate others’ behavior. In contrast, greater vocal masculinity in females was not found to increase perceived dominance (Tsantani et al, 2016). However, evidence suggests that it raises their perceived competence (Ko et al, 2009). It is easy to imagine, then, why a board of directors would be wary, subconsciously or not, in hiring someone who they perceive as having the ability to dominate them socially (vocally masculine males) but would want to hire someone who they perceive as being more competent (vocally masculine females).

Additionally, we find that the magnitude of the relationship between vocal masculinity and CEO status depends on a number of different factors including the gender composition of the board, the gender of the CFO, and the entrenchment level of a firm. While we cannot go into detail on all of these results, we think the first is the most interesting.

We find that the relationship between female masculinity and CEO status is stronger at firms with female-dominated boards while the relationship between male masculinity and CEO status is stronger at firms with male-dominated boards. This is despite the fact that male-dominated boards hire more male CEOs while the opposite is true for female-dominated boards. The effect is very large: at firms with the greatest female board representation, a one standard deviation increase in female vocal masculinity is associated with an 11.8% increase in the probability of being a CEO, while it is only 4.1% at firms with the lowest female representation. For males, a one standard deviation increase in voice masculinity is associated with a 13.2% decrease in the likelihood of being a CEO at the most male-dominated boards versus 8.6% at the least male-dominated ones. This result is consistent with prior work in psychology that males show greater jealousy towards more masculine males while females show more jealousy towards less masculine females (O’Connor and Feinberg, 2012).

Overall, this is the first paper to empirically document the relationships between executive-level vocal masculinity, language usage, and labor outcomes. The results of the paper suggest that perceptions regarding masculinity play a role in the likelihood that both male and female managers become CEOs as well as in determining their compensation.

Brad Cannon is an Assistant Professor of Finance at Binghamton University.

John Lynch is an Assistant Professor of Finance at Hofstra University.