Female CEOs Have More Financially Successful Companies

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According to Fortune Magazine’s analysis of data from Factset Research Systems, it’s companies that have female CEOs that are beating the stock market.

At Fortune 1000 companies with women in the top role, there was an average return of 103.4% over the women’s tenures. Over the same periods, there was an average 69.5% returns for the S&P 500 stock index.

It was also discovered that companies with female CEOs generated more revenue than others. Although only 5% of Fortune 1000 companies have a female CEO, those companies generated 7% of total revenue for the entire lot of them.

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In other studies, it is found that companies with female CEOs outperform others. Even if a woman is not CEO, companies benefit when women are on the board of directors – numerous studies note that when women are on the board, companies perform better than male-only ones. Some studies even offer explanations: for example, women are more likely to be cooperative while making decisions and consider other points of view. In a company, this translates into better performance. Women on boards also tend to stop companies from paying more to acquire additional companies and reduce overall acquisitions – a move that protects shareholder value.

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With all of the success that female CEOs have, it’s a shame that only a small number of companies are benefitting from having a woman at the top. Although Fortune notes that the number of women overseeing Fortune 500 companies has been on a steady rise since 1998, only 24 of those 500 companies have a female CEO.

Despite the fact that female CEOs produce better results, these executives are still paid less than their male counterparts. Median pay for 11 of the highest-paid male CEOs is still $1.6 million more than the top-paid women. Just last year, female CEOs made less than 80% of what male CEOs did. It seems that even when you’re at the top, there is still a glass ceiling.