Politics and gender in the executive suite

We investigate the relationship of CEOs' political preferences (as reflected in their political contributions) with the prevalence and compensation of women in leadership positions at U.S. public companies. We find that CEOs who favor the Democratic Party (“Democratic CEOs”) are associated with the presence of more women in the team of non-CEO top executives (“the executive suite''). To explore causality, we use an event study approach and show that replacing a Republican CEO with a Democratic CEO is accompanied by an increased female representation in the executive suite. To further explore causality, we examine whether CEO political preferences are associated with gender diversity in the boardroom and find no such association. This lack of association is consistent with CEOs' preferences having less influence over gender diversity in the boardroom than the executive suite because CEOs have less power over the appointment of directors who supposed to supervise the CEO than over that of executives reporting to the CEO. Finally, examining the gender gaps in the level and performance-sensitivity of executive pay documented in the literature, we find that they are driven by companies headed by Republican CEOs and disappear or at least diminish under Democratic CEOs