If you care at all about the equal-pay movement, you’ll love to hear that Bet365 Group Ltd., a privately owned, online-betting company, paid CEO Denise Coates $281 million last year, higher than any chief executive running an S&P 500 company.
Of course, Coates and her family own Bet365, the second-largest betting company in the UK, so it’s a matter between her and her family.
However, it got me thinking about women-led companies. Which female CEOs are getting paid large sums by the companies they run, but also deliver for shareholders?
Interestingly, of the 100 top-paid CEOs in the Bloomberg Pay Index for 2017, only four were women.
In selecting stocks to buy, I’ll limit my options to women running S&P 500 companies (there are only 24 at the moment with a 25th to be added on January 1) and outperforming the S&P 500 year to date through November 23.
May the best woman win!
Women-Led Stocks to Buy: Advanced Micro Devices (AMD)
2017 Compensation: $10.9 million
YTD Return: 88.5%
Su joined the company in January 2012 responsible for its global operations. The first thing she did when she took the top job was to simplify what the company was trying to accomplish.
“When I first took over, there was a desire from HR and the communications team to put together a mission, vision, and value statement and I was thinking at the time we are losing money like crazy,” Su told Fast Company in September.
Su cut to the chase in a company-wide memo to AMD staff explaining the company’s purpose.
“To build great products, deepen customer relationships, and simplify everything we do,” she wrote.
AMD has been winning ever since.
It might not be my favorite of the semiconductor stocks — I like Nvidia’s (NASDAQ:NVDA) substantial profits more than AMDs knack for developing killer products — but under her leadership, it will always be competitive, something it wasn’t before taking the helm.
Women-Led Stocks to Buy: Ulta (ULTA)
2017 Compensation: $7.5 million
YTD Return: 35.6%
Ulta (NASDAQ:ULTA) CEO Mary Dillon has done a masterful job balancing the cosmetics retailer’s in-store sales with online sales, creating a user experience that’s second to none. Of course, it doesn’t hurt that you’ve got Kylie Cosmetics in every one of your stores just in time for Thanksgiving and Black Friday, making this one of the best stocks for the holiday season.
“Alright guys, so I’m very excited to finally announce that Kylie Cosmetics will be in every single Ulta store on the 17th of this month,” Kylie Jenner announced via Instagram November 6. “So I’m going to be starting with just my best lip kits first, and then I’m going to be expanding and adding a lot more things super fast. So palates and all that good stuff.”
I’m not a cosmetics expert, but I do know that Kylie Jenner drives a lot of traffic. The fact that Dillon’s been able to maximize the reality star’s popularity for Ulta’s gain is indicative of how well she understands its customer base.
Ulta stock had an off year in 2017, down 12.3%, but it’s back with a vengeance, slowing its brick-and-mortar expansion slightly. Instead of a target of 100 stores annually over the next three years, it will open between 70 and 80 per year, still a healthy pace, as it conquers a big chunk of U.S. cosmetics sales.
Up here in Canada where I live, ULTA has no stores, so even if it runs out of physical space in the U.S., there are other markets it can exploit.
As CEOs go, Dillon provides excellent value for shareholders.
Women-Led Stocks to Buy: Anthem (ANTM)
2017 Compensation: $2.2 million
YTD Return: 25.8%
Anthem (NYSE:ANTM) CEO Gail Boudreaux was one of the lowest paid S&P 500 chief executives in 2017. However, there’s a catch.
Boudreaux, the former executive VP of UnitedHealth Group (NYSE:UNH) until she left in February 2015, was hired as CEO on November 6, 2017. In 2018, she’s scheduled to make $1.4 million in salary, a bonus equal to 175% of her salary and the potential for long-term incentive awards totaling $10.3 million.
Even at these numbers, she’ll still be well below what some of the highest paid S&P 500 executives will earn in 2018.
Anthem gets a bonafide success in the healthcare industry at a time of intense change.
“We expect there may be a period of uncertainty among investors until the reasons for the reported leadership change are understood and fully accepted by the market,” BMO Markets analyst Matthew Borsch wrote at the time.
Up almost 26% year-to-date, I think the market’s accepted her hiring.
Women-Led Stocks to Buy: Kohl’s (KSS)
2017 Compensation: N/A
YTD Return: 21.1%
Gass worked side-by-side with former CEO Kevin Mansell — he retired in May after 35 years with Kohl’s, nine of them as CEO — on the department store’s transformation since joining the company in 2013 after 16 years at Starbucks (NASDAQ:SBUX).
“The company Kevin joined in 1982 is almost unrecognizable to the company he’s leaving behind,” said Gass during Kohl’s May shareholders meeting. “The incredible growth. The geographic expansion. The brand breadth and depth. The new customer acquisition. The omnichannel and digital transformation… Kohl’s is the Kohl’s we are today because of Kevin Mansell.”
I think it’s safe to say that Mansell would suggest Gass had a little to do with the positive changes herself, including securing a partnership with Amazon (NASDAQ:AMZN) that allows Amazon customers to return products through Kohl’s stores.
Gass understands that you’ve got to get people into the stores; the Amazon partnership is one way to do that. Call it a win/win.
Kohl’s is one women-led stock that looks ready to succeed over the long haul.
Women-Led Stocks to Buy: Nasdaq (NDAQ)
2017 Compensation: $14.5 million
YTD Return: 16.0%
In 2017, Nasdaq (NASDAQ:NDAQ) CEO Adena Friedman earned 132 times the median employees pay. However, compared to Friedman’s S&P 500 peers, the executive’s compensation was right around the average of $13.94 million.
Friedman first joined Nasdaq in 1993. In 2011, she left for Carlyle Group (NASDAQ:CG), where, as CFO, she helped take the investment firm public in 2012. She returned to Nasdaq in 2014 as President, taking the top job on January 1, 2017.
Friedman has CEO for almost two years now, and NDAQ stock has achieved double-digit shareholder returns in both years — a sign investors are hoping Friedman doesn’t decide to leave the company a second time.
Friedman, like most female CEOs, would prefer to be known as a great leader, period, but understands that she’s a role model for other women considering a run at the C-Suite.
“So when I go out and talk to people now, I have younger women come up and tell me how important that was for them to see that there’s a path all the way to the top,” Friedman told Business Insider in August. “And I just didn’t realize that was — I didn’t understand that going into the role that that was going to be part of what this meant to the community around me. And it makes me really proud, and also humbled, frankly.”
Humility is the sign of a great leader. Since taking the top job, Friedman’s shown that she can be both a great leader and a role model for women.
NDAQ stock owners are lucky to have her.
Women-Led Stocks to Buy: Progressive (PGR)
2017 Compensation: $9.3 million
YTD Return: 13.8%
Fortune magazine named Cleveland-based property and casualty insurer Progressive (NYSE:PGR) CEO Tricia Griffith their businessperson of the year in 2018.
Note, the award is for the best businessperson, not the businesswoman. Not only is Griffith one of only 24 female CEOs in the S&P 500; she’s also one of the few who’s gotten the top job after joining the company right out of college.
Griffith was one of three women CEOs I selected in October 2016 whose stocks I’d buy. Since my recommendation, PGR stock is up 48% through November 23, although it’s taken a real beating in November down more than 13%.
As CEO, Griffith’s been able to combine high-tech with high-touch, to deliver for both Progressive’s customers and shareholders.
I expect the lifer will continue to push the company to be better than its peers and by doing so, making this a stock to buy for years to come.
Women-Led Stocks to Buy: Ventas (VTR)
2017 Compensation: $25.3 million
YTD Return: 6.3%
Although the YTD return of Ventas (NYSE:VTR) isn’t spectacular, it’s in the black, which is a big deal in a year that could see the end of the bull market.
Ventas CEO Debra Cafaro is highly paid, no question. However, she’s helmed the owner of healthcare properties since 1999, making her one of the longest-tenured female CEOs in the S&P 500.
Ventas has undergone a strengthening its balance sheet over the past two years resulting in the sale of a significant amount of real estate which reduced its cash flow but puts it in a better position to win in 2018 and beyond.
In June, I recommended Cafaro and Ventas as stocks to buy. Since then it’s gone on a 14% run. I believe she’s one of the better CEOs, male or female, in the S&P 500.
While it continues to face some headwinds in its seniors’ housing business, it hasn’t hesitated to acquire high-quality assets that will retain their value and appreciate once senior housing inevitably rebounds as supply shrinks and demand rises.
Long-term, VTR is a good stock to play the demographic changes resulting from an aging population.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.