An extensive body of research has studied the origins of the gender pay gap (GPG), either from a macro-level perspective (e.g., how equality laws reduce the GPG) or a micro-level perspective (e.g., how career choices affect the GPG). However, little is known about the role of firms – the place where pay decisions are made and the foundations for the GPG are laid. In this study, we examine how psychopathic tendencies of Chief Executive Officers (CEOs) shape GPG in their firms. We integrate upper echelons theory with the literature on the GPG and the work on psychopathic leadership to argue that CEOs higher on psychopathic tendencies widen the GPG within firms. We test our hypothesis with a comprehensive and novel panel dataset that encompasses matched employee, firm, and CEO data from Finnish firms from 2009 to 2020. In line with expectations, we find a higher GPG in firms that are led by CEOs with a higher level of psychopathy. In additional analyses, we show that this effect is contingent on firm size, whether the CEO is founder and an entrepreneur, and the male-dominance of jobs and firms. These findings have important implications for our understanding of the causes of the GPG.
