Assessment of Women in CEO Positions

If Kamala Harris becomes president, she will break the glass ceiling.

Other glass has already been shattered. About a quarter of U.S. senators are women, as are about a quarter of the country’s governors. Women sit in the CEO chair at about 10 percent of Fortune 500 corporations.

Judging a senator’s or governor’s performance is subjective. For CEOs, there are fairly standard objective criteria.

In this article, I looked at the work of ten women in management positions at large Fortune 500 companies using three criteria:

Return on equity (corporate profits divided by corporate net worth) for the last four quarters.

· Increase in profits (gains) over the last year.

· The company’s share price performance over the last year.

Here’s a quick look at each company individually, and then some dangerous generalizations. (Dangerous because the sample size is small and the time frame is only a year.)

CVS

Karen Lynch took the helm of CVS Health Corp. (CVS) in 2021. She owns about $26 million in CVS stock, which has fallen 18% in value over the 12 months through July 26. The company’s return on equity is 9.9%, and earnings are down 18.7% over the past four quarters.

Height

At Elevance Health Inc. (ELV), formerly known as Anthem, Gail Boudreaux has occupied the corner office since 2017. Elevance has a 16.7% return on equity and its stock price is up 12% over the past year. Earnings are up 5.4%.

General Motors

Mary Barry has led General Motors Co. since 2014, making her one of the longest-serving CEOs of major companies. GM’s return on equity last year was 16%, and the stock is up 15%. Profits are up 9% last year.

Centen

At Centene Corp. (CNC), Sarah London has been CEO since 2022. The St. Louis, Missouri-based company specializes in health insurance for Medicaid and Medicare patients. The stock is up 7% over the past year, with a return on equity of 10.6%. Earnings are up 12.7% over the past four quarters.

United packages

Most United Parcel Service Inc. (UPS) truck drivers are men, but the boss is a woman, Carol Tome. She’s held the job since 2020. The company posted a 29% return on equity last year, even as its stock fell 31%. Profits fell 35% as the pandemic’s impact on package deliveries faded.

Citigroup

Jane Fraser has been CEO of Citigroup Inc. (C) since 2021. The big bank was struggling before she took over and continues to struggle, with a return on equity of just 4%. Profits are down 32% over the past four quarters, but shares are up 37% over the past year.

Best offer

In retail, Best Buy Inc. (BBY) Corie Sue Barry took over as CEO in 2019. Return on equity is very high at 42.6%, but the stock has gained just over 5% over the past year. Earnings are down 3.7%.

Progressive

Susan Patricia Griffith has been CEO of Progressive Corp. (PGR) since 2016. Progressive has seen a massive 465% increase in earnings over the last four quarters. The stock is up 71% over the past year, and the company’s return on equity was most recently 34.6%.

Oracle

Safra Catz took over the top job at Oracle Corp. (ORCL) in 2014, making her the senior female CEO. Oracle’s numbers are strong, with a 241% return on equity, a 59% increase in earnings over the past year and a 30% increase in share value.

General dynamics

The longest-serving member of the group is Phebe Novakovic, CEO of defense contractor General Dynamics Corp. (GD), who took over in 2013. Over the past four quarters, the company has posted a 17% return on equity and 5.3% earnings growth, and its stock is up 30%.

Analysis

The companies I tracked with female CEOs posted average annual profit growth of 51.5%, led by Progressive and Oracle. That’s significantly better profit growth than the Standard & Poor’s 500, which was about 11.6% from June 2023 to June 2024.

The S&P had a better return on equity, about 21%, mostly thanks to big tech stocks in the so-called Magnificent Seven. Companies with female CEOs averaged about 17%.

In terms of stock market performance, S&P led the way with a 21% return last year, while the ten companies with female CEOs returned 15.4%.

It’s obvious that a woman can successfully run a large corporation. However, the stock market seems to have a slight bias in favor of male CEOs.

Disclosure: I personally own General Dynamics stock and most of my clients. My wife (a portfolio manager at my firm) and several of our clients own Progressive. One client owns United Parcel stock.