Survey: Female Founders Are (Finally) Paying Themselves More
Harvard Business Review
by Marsha Firestone & Lisa Schiffman
photo: HBR STAFF/JAMES WORRELL/GETTY IMAGES
Nashville-based entrepreneur Sherry Deutschmann built her company, LetterLogic, into an enterprise with $40 million in revenue before selling it to a private equity firm in 2016. As the firm’s founder, Deutschmann went seven years without giving herself a raise, and paid herself the relatively low amount of $225,000, even after the company crossed $30 million in sales. Her board encouraged her to finally take a pay hike. She says “Absolutely, it’s the truth” that men she knows in comparable positions paid themselves more. And she wonders now if this hurt her.
“Interestingly, when I sold my company, I suspect that the PE firm who bought us thought less of my business acumen…simply because I was paying myself about half what my male counterpart was making,” Deutschmann said in an interview. “It didn’t matter that I was running a faster-growing company and had zero debt. They likely devalued my leadership abilities because I had unwittingly devalued myself by not paying myself enough.”
She’s not alone: Prior studies have found that female founders are reluctant to pay themselves as much as their male counterparts choose to pay themselves.
But recent research shows this may be changing.