Data-L-1.csv

When female directors, often a minority on corporate boards, introduce divergent behaviors and perspectives, they have the potential to uniquely influence board decision-making, including CEO pay raises. However, the mere addition of a female director does not guarantee the effectiveness of her minority influence. Leveraging insights from the minority influence literature and board gender diversity research, this study examines the conditions that enhance or diminish the influence of a newly appointed female director on CEO pay raises. Using data from 5,429 firm-year observations across 795 S&P 1500 firms from 2010 to 2017, we find that the appointment of a new female director is associated with a more substantial decrease in CEO pay (i.e., a stronger influence) in boards with higher incumbent female representation (as opposed to mere token representation), fewer interlocking directorships held by males, the presence of a female CEO, and more frequent membership changes among male directors. This research contributes to the ongoing dialogue on gender diversity in corporate leadership and addresses public concerns about excessive CEO compensation.