More and more women are breaking through the highest glass ceilings in corporate America and becoming CEOs of the largest corporations in the country. Giant U.S. companies like General Motors (GM), Reynolds American (RAI) and Campbell Soup (CPB) all currently have female CEOs.
It’s certainly an accomplishment in itself for a woman like Mary Barra to even become the CEO of a $50 billion company and 107-year-old American institution like GM in the first place. But in true “battle of the sexes” style, I decided to take a look at just how many S&P 500 companies currently have women CEOs and compare the performances of their respective stocks to the overall S&P 500. Here’s what I found.
A Long Way To Go
Maybe this is unnecessary, but in the spirit of being thorough, I’ll start off by establishing that 50.4% of the U.S. population is female. So half the country is female. Shocking.
But I’m sure it will come as no surprise to learn that females are grossly under-represented in CEO positions among S&P 500 companies. In fact, only 20 S&P 500 companies have females in the top position. If you’re keeping score at home, that’s 4.0%. GM, RAI, and CPB being among them.
Although that percentage is well short of 50%, there’s no question that female business leaders have made huge strides compared to where they were two or three decades ago.
Still, there are a number of arguments that can be made (feel free to comment) as to why, in a country that prides itself on equality, only one in every 25 CEOs is female.
The Numbers
Perhaps the best way for women to go about changing the male-dominated status quo in the top tier of the business world is by demonstrating that they can generate equal or better performance for employees, shareholders and customers.
The stock market is typically indifferent to matters of equality and principle and generally speaks only one language: share price. In the past year, the average S&P 500 stock is down 3.1%. I ran a Finviz screen to determine the average performance of the 20 companies with female CEOs during that time.
As it turns out, stocks with female CEOs have delivered an average -1.3% return in the past year, nearly 2 percentage points better than the returns generated by the index. Since there are no other female CEOs to account for, this means that male CEOs are underperforming the market and females are outperforming it.
Conclusions?
First off, congratulations to the women.
Second, there are several caveats. This is an extremely small sample of companies and an even smaller sample of companies with female CEOs. A year is also a very short time period in the lifespan of a company. Finally, a -1.2% annual return is certainly nothing to be particularly excited about, and the difference between the performance of the female CEOs and the male CEOs is likely well within the margin of error for this non-scientific comparison.
There appears to be no significant difference between the performance of stocks headed by female CEOs and those headed male CEOs. But even if female CEOs aren’t out-performing their male counterparts by a wide margin, the fact that they appear to be performing at least as well only serves to emphasize the problem with their 4% representation.
CPB and RAI Are Top Performers
Before I wrap up, I have to highlight two exceptional women who have led their respective companies to massive market gains in the past year. Under Susan Cameron’s leadership, RAI stock surged 38% in the past year. And CPB CEO Denise Morrison oversaw a 39% one-year spike in share price, tops among all female CEOs.
Disclosure: As of this writing, Wayne Duggan had no positions in any of the stocks mentioned.
