Female employees own just 47 cents for every dollar of equity that male employees own. The gap is worse when it comes to female founders of startups for they only own 39 cents for every dollar that their male counterparts own. The equity gap is particularly pronounced among tech startups.
A lot of surveys done on corporate setting have established that women suffer gender pay gap. These studies, however, only compared salary which is only one part of the compensation given to all employees.
In startups, a big factor of wealth is acquired through equity ownership. When startups became big, earnings from equity are bigger than employees' monthly salaries. To give context, a few of startups that have gotten extremely big at present include Facebook, Amazon, Alibaba, and Elon Musk' SpaceX.
With this new research, conducted by Carta and #Angels, the discrepancies in company ownership between men and women are highlighted. The study surveyed about 180,000 employees, more than 6,000 companies, and more than 15,000 company founders. All of them have a combined total of about $45 billion in equity value.
The report found that women comprise 35 percent of the equity-holding employee but only hold 20 percent of the employee equity. For example, female shareholders surveyed for the study hold a total of $2.2 billion in equity value while their male counterparts hold $8.8 billion in value. This equates to an average of about $35,319 in value per woman and $74,998 per man.
Furthermore, young companies with up to 10 employees tend to hire only 29 percent of women employees. Female hires would only exceed 40 percent when the startup attained 400 employees.
The situation is worse for women-founded startups where females make up 13 percent of founders but only given 6 percent of founder equity. This translates to women founders holding $1.8 billion in value compared to male counterparts who hold $29.8 billion. This equates to an average of $857,828 in value per female founder and $2,175,392 per male founder.
The condition presented in the study is heavily felt by women working in Silicon Valley, Bloomberg noted. One unnamed woman employee revealed that her men colleague was offered twice company stock options than what was offered to her. They are working in the same position at Lyft Inc. She tried to negotiate with her recruiter but the latter said the offer was standard and fixed. A few months to the job and she found that about 12 other men who started around the same time as she was offered higher.
Jackie Luo, a software engineer at Square, shared that she was offered a stock option as part of her pay in her previous job. She, however, had to press for more information about the actual value and what percentage of the company she would own. The matter felt like a "taboo" without female workers knowing if they are being shortchanged or not, Luo said.