Companies With Female CEOs Beat The Stock Market

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"Companies With Female CEOs Beat The Stock Market"

Woman business owner executive

CREDIT: Shutterstock

Female CEOs at the country’s biggest companies oversee financial results, on average, that beat the stock market, according to Fortune Magazine’s analysis of data from Factset Research Systems.

Fortune 1000 companies with a woman in the top role saw an average return of 103.4 percent over the women’s tenures, compared to an average 69.5 percent return for the S&P 500 stock index over the same periods.

female_return_perc

CREDIT: Fortune

The companies with female CEOs also seem to generate an outsized amount of revenue compared to others. While just 51 companies have a female CEO among the Fortune 1000, or 5 percent, those companies generate 7 percent of total revenue for the entire group.

Other studies have found that companies run by women outperform others. Hedge funds run by women had a 6 percent return between 2007 and 2013, beating both a global hedge fund index at the stock market. And Vietnamese companies with women CEOs have tripled their gains over the past five years, nearly twice the gain made by a benchmark index.

Numerous studies have also found that companies with women on their boards of directors perform better than male-only ones. Others have hinted at why: women are more likely to be cooperative in decision-making and to consider the rights of others, which leads to better company performance, and women on boards tend to keep companies from paying more for acquiring other companies and reduce the number of acquisitions overall, which protects shareholder value.

But a very small number of companies are reaping all of these benefits. Fortune notes that the number of women CEOs among Fortune 500 companies has risen steadily since 1998. Still, just 24 of those 500 companies have a woman as chief executive.

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CREDIT: Fortune

Overall, women have held less than 15 percent of executive officer positions at Fortune 500 companies for four years and less than 17 percent of corporate board seats for the last eight.

And despite their likelihood to produce better results, female executives are paid less than male ones. Median pay for the 11 highest-paid female CEOs is $1.6 million less than median pay for the top-paid men. Last year, female CEOs made less than 80 percent of what male ones made. All of the highest paid female executives in any C-suite role make 18 percent less than the men.

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