We examine the impact of board gender diversity on equity-based compensation in executive pay. We show that the presence of female directors is associated with lower equity-based compensation in executive pay—particularly when female directors serve on compensation committees or when boards are dominated by insiders. Our findings support the view that female directors serve as effective monitors, potentially substituting for other corporate governance mechanisms, such as incentive-based pay and board independence. Our results are not driven by lower pay-for-performance sensitivity induced by poor stock performance. We do not find evidence consistent with risk-aversion on the part of female directors.