Women don’t just face a gender pay gap. They also suffer from an equity pay gap.


Data from the U.S. Census Bureau have consistently shown that men out-earn women when it comes to salaries. But new research suggests that the gender pay gap extends beyond traditional forms of compensation to include a practice common among startups, particularly in the tech industry: The offer of stock options, or equity.

For every $1 in company equity held by men, women hold just 47 cents, according to a study released this week by Carta, a Silicon Valley firm that helps startups manage their equity shares. The study finds that women tend to be disadvantaged in the amount of equity they hold at almost every stage of a new startup’s life.

Equity can be the deciding factor in a worker’s financial fortunes. Many startups lack the cash to lure new employees with premium salaries, so they offer ownership shares in the company instead. If the company is successful, those shares rise in value, and employees can cash out to the tune of millions in some cases.

But the imbalance Carta found in an analysis of roughly 180,000 workers and entrepreneurs across 6,000 companies suggests women are being left behind as men reap the rewards of equity.

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September 19, 2018 at 12:30PM

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