If you're like most investors, you're always looking for bargain stocks, and for companies with an edge over competitors. So maybe this will get you excited: In 2004, the research organization Catalyst studied more than 350 of the Fortune 500 companies and found that companies with one key edge sported returns on equity (ROE) 35% higher and total returns to shareholders 34% higher than those companies that didn't have it.
That sounds exciting. And you're probably wondering what this secret weapon is. Well, it's the presence of women in upper management. And the companies with more seem to significantly outperform those with less.
Therefore, you might be interested to learn some good news and some bad. First, the good: The ranks of women are increasing in executive suites across the country. According to a report by Catalyst last month, women now make up 3% of the Fortune 500 CEOs -- a paltry number, yes, but still a threefold increase in less than a decade. Here, for example, are the leaders of some of our biggest enterprises:
|
Company |
CEO |
|---|---|
|
PepsiCo (NYSE:PEP) |
Indra Nooyi |
|
WellPoint (NYSE:WLP) |
Angela Braly |
|
Archer Daniels Midland (NYSE:ADM) |
Patricia Woertz |
|
Sunoco (NYSE:SUN) |
Lynn Elsenhans |
|
DuPont (NYSE:DD) |
Ellen Kullman |
|
Kraft Foods (NYSE:KFT) |
Irene Rosenfeld |
Of course, not every female CEO will knock our socks off -- Carly Fiorino's tenure at Hewlett-Packard (NYSE:HPQ), for example, was not universally loved. And some female CEOs may be bristling at being treated differently than their male counterparts.
I say that because of the bad news I recently read: According to the good people at The Corporate Library, it seems that between 2007 and 2008, while men in top spots saw their total realized compensation drop 6.1%, women CEOs experienced an 18.5% cut. Ouch. There's more:
- On average, female CEOs earned 58% of what males earned in realized compensation.
- On average, male CEOs earned 3.5 times more than females in discretionary bonuses.
- There was only one woman CEO among the top 150 earners in 2008.
Armed with this knowledge, you may now want to keep an eye on the percentage of women you notice at or near the helm of companies that interest you. A high percentage may bode well for your portfolio. And now that shareholders are getting more of a voice in executive compensation, you may want to look at your CEOs' pay packages closely, too.
