Despite the expected advantages of appointing women to corporate leadership roles, empirical evidence provides mixed support for the positive relationship between women's representation in the top management team (TMT) and subsequent firm performance. Considering the evidence that female TMT members are often paid less than their male colleagues, this study examines the implications of a gender pay disparity for the relationship between women's representation in the TMT and firm performance. Our analysis that draws on TMT pay data in public Australian firms demonstrates that gender pay disparities within TMTs negatively moderate the relationship between women's representation in the TMT and subsequent firm performance. Specifically, when female TMT members are paid less than their male colleagues, and this gender pay disparity is large, women's representation in the TMT is negatively associated with firm performance.
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