At the start of 2012, there were 11 public companies with sales in excess of $10 billion that were run by women. One, Angela F. Braly of Wellpoint Inc. (NYSE: WLP), was pushed out of her job — as often happens to CEOs. Another, Irene Rosenfeld, ran Kraft, which was broken into two public companies. Rosenfeld continues to run one of those, Mondelēz International Inc. (NASDAQ: MDLZ). We didn’t include these two CEOs in our analysis.
A review of the performance of these female CEOs might cause some people to believe their performances argue for or against the promotion of more women to the chief executive’s office. Research firms, led by Catalyst, have pressed for an increase in the number of female senior managers and board members at large public companies, based on the idea that women are just as qualified to do these jobs as men are. Whether a current female CEO has done poorly or well bears no relationship to the Catalyst case. Success or lack thereof among the small group reviewed here has nothing to do with the overall qualifications of women to hold senior corporate job.
Another argument that could be derived from the presence of female CEOs is that if women have can hold the highest level jobs in corporate America then all women should be treated the same as their male equivalents. Women have been paid less than men for similar work since records on the matter have been kept. The justification of equal pay should be based on merit, and while that merit is obvious, it has no relationship to the job performances of a small sample of CEOs who are extremely successful financially.
The last argument that some make about the sometimes limited success of women in chief executive roles and their small presence at large companies is that women’s careers are hurt when they decide to leave their jobs temporarily to have children. The widely discussed comments by famed former GE CEO Jack Welch to this effect cannot be proved one way or another, or at least have not been. The nine female CEOs on this list are too small a sample to be a reasonable litmus test about the relationship between family and success
The stock prices of seven the nine companies run by these female CEOs run have underperformed the market. The S&P 500 is up 14% year to date. Seven out of nine is a high percentage. But there is no evidence that poor management by female CEOs is to blame. Some of the chief executives on this list have nearly ruined their companies. Ursula Burns of Xerox and Meg Whitman of Hewlett-Packard lead that list. Others have performed extraordinarily well, whether their stocks reflect it or not. Included among those are Carol Meyrowitz of retailer TJX and Patricia Woertz of ADM. On those scales, they have done no better, or worse, than most of their male counterparts.
1. Meg Whitman
> Hewlett-Packard Co. (NYSE: HPQ)
> Revenue: $127.2 billion
> YTD stock price: -45%
HP may be the most badly run large public company in the U.S. It also has among the worst corporate governance practices of any public company of substantial size. Meg Whitman has to take a very large portion of the blame for the ongoing fall of HP from one of the top tech companies in the world to one that is struggling to recover from years of decline. Just recently, HP revealed a shocking accounting scandal arising from its buyout of Autonomy. Whitman was sitting on the board when it approved the deal. When Whitman became CEO, she did not ask for a re-examination of Autonomy’s sales figures. Whitman has presided over several disappointing earnings reports, and has said HP may remain in trouble for several years. She and the board could blame former CEO Leo Apotheker for many of HP’s problems. He left the company in September 2011, after less than one year as chief executive. But Whitman is over a year into her tenure. She has not articulated any long-term vision for HP or explain how the company can regain its position as an industry leader.
2. Virginia Rometty
> International Business Machines Corp. (NYSE: IBM)
> Revenue: $106.9 billion
> YTD stock price: +4%
Virginia Rometty has been CEO of IBM since January 2012. She was well-regarded by the media before she became chief executive after holding several senior management positions at the tech company. She was ranked first in Fortune’s “Fifty Most Powerful Women in Business for 2012.” Rometty’s brief tenure could be characterized as doing no wrong to the successful company which grew at an extraordinary rate under her predecessor, Sam Palmisano, who ran IBM from 2002 until he was succeeded by Rometty. Over that 10-year period under Palmisano, IBM’s revenue rose from $81 billion to $107 billion. Net income improved from $3.6 billion to $15.9 billion. Rometty has not rocked the boat since she got the CEO’s job. Revenue dipped 5% in the third quarter, but that could be reasonably blamed on a slowing of business in Europe, a problem that has plagued many companies.
3. Patricia Woertz
> Archer Daniels Midland Co. (NYSE: ADM)
> Revenue: $89.0 billion
> YTD stock price: -5%
By most measures, Patricia Woertz is among the better large company CEOs in America. The core of ADM’s business, agricultural commodities, has been repeatedly rocked by changes in commodity prices. Among the diversification that has helped the company balance swings in commodities prices are forays into ethanol and oilseed processing. Woertz was appointed CEO in 2006. Over the last five years, revenue has grown from $69.8 billion to $89 billion. Net income over the same period has declined from $1.8 billion in fiscal 2006 to $1.2 billion in 2012, affected by the cost of goods. However, in the intervening years which include 2009, 2010 and 2011, net income rose each year and moved above $2 billion. Woertz is in the midst of an attempt to further diversify ADM’s portfolio of businesses in order to partially negate earnings weaknesses in some of its older divisions. ADM has bid for GrainCorp, an Australian company with a grain distribution network throughout much of Asia.
4. Indra Nooyi
> PepsiCo Inc. (NYSE: PEP)
> Revenue: $66.5 billion
> YTD stock price: +5%
Indra Nooyi has come under criticism recently because she has diversifies Pepsi’s businesses beyond its flagship drinks — particularly Pepsi — which have for years brought a steady flow of net income to investors. Nooyi’s theory has been that the soda business is unlikely to grow rapidly because of the market’s saturation from Pepsi and Coke products. Nooyi thought Pepsi has better hedge its bets. She has even given the diversification effort a name, ”Performance with Purpose.” This program, Pepsi claims, involves “delivering sustainable growth by investing in a healthier future for people and our planet.” But benefits to the planet are not what investors want. Pepsi may not be the among the most healthy beverages, but it is a cash cow. Pepsi’s struggles were reflected in its most recent quarterly report. Revenue fell 5% to $16.7 billion. Net income also dropped 5% to $1.9 billion. Revenue at the company’s flagship PepsiCo Americas Beverages dropped 7% to $5.5 billion. Wall Street’s concerns about Nooyi’s recent tenure are fair. ”Performance for Purpose” has not driven financial performance at all.
5. Ellen Kullman
> E. I. du Pont de Nemours and Co. (NYSE: DD)
> Revenue: $38.0 billion
> YTD stock price: -5%
Ellen Kullman’s challenges as head of the agriculture, food and bioscience company are reflected in its most recent quarterly results. Revenue fell 9% to $7.4 billion. Sales of its core agricultural division were up slightly to $1.5 billion. However, its chemical division took a beating. Third-quarter 2012 EPS from continuing operations were $.32 down from $0.60 in the same quarter a year ago. Kullman took over the chief executive’s position at the start of 2009, and most of that period has reflected a much better performance than the most recent period. Since then, revenue has risen from $27.3 billion to $38.7 billion. Net income has nearly doubled from $1.8 billion to $3.5 billion during the same period. Kullman has gotten high marks for her programs to expand DuPont away from its core chemical business. One of the largest steps Kullman has taken is the 2011 buyout of global enzyme and specialty food ingredients corporation, Danisco, more than $6 billion. The transaction shows that Kullman has a vision for DuPont that is well beyond the company’s legacy foundation.
6. Carol Meyrowitz
> The TJX Companies Inc. (NYSE: TJX)
> Revenue: $23.2 billion
> YTD stock price: +35%
Carol Meyrowitz became CEO of TJX, the parent of well-known retailers T.J. Maxx and Marshall’s, in early 2008. TJX describes itself as the biggest “off-price” apparel and home fashions retailer in the America. That puts it squarely into competition with big box retailers, including Wal-Mart and Target. But the competition has not hurt TJX. As a matter of fact, the company has thrived, with rapid same-store sales improvements. In November, for example, according to the company, “consolidated comparable store sales for the four-week period ended November 24, 2012, increased 3% over a 4% increase last year.” The success has been evident in TJX’s financial results. The company raised its guidance for the current quarter, and its entire fiscal year. Sales and net income have risen every year since Meyrowitz took over. Meyrowitz serves to some extent at the will of chairman Bernard Cammarata who founded TJX and remains its largest private shareholder.
7. Ursula Burns
> Xerox Corp. (NYSE: XRX)
> Revenue: $22.6 billion
> YTD stock price: -14%
In July 2009, Ursula Burns succeeded another female CEO at Xerox, Anne M. Mulcahy. At about the same time Burns took her job, Xerox finished its arrangement to buy Affiliated Computer Services for $6.4 billion. The acquisition was not a success, as evident by the company’s financial results in the first three quarters of the year. In the third quarter, revenue fell 3% to $5.4 billion. Over the course of the first nine months, revenue dropped by 1% to $16.5 billion. Net income for the third quarter was off 12% to $282 million. Xerox’s legacy document processing segment continued to shrink, and its new services business, the future of the company, has stagnated. Burns has had three years to get Xerox’s business mix and cost base right but has failed completely to do so. It is a wonder at this point that the board allows Burns to remain in place.
8. Sherilyn McCoy
> Avon Products Inc. (NYSE: AVP)
> Revenue: $11.3 billion
> YTD stock price: -19%
Sherilyn McCoy took over in Avon in April, 2012. She might say that all of Avon’s problems were caused by her predecessor, Andrea Jung, who ran the company from 1999 until she was unceremoniously ousted in 2011. That is not an acceptable defense for McCoy to make. Avon’s share price has continued to fall since McCoy became chief executive, to some large extent because she has not been able to articulate to Wall Street how she plans to make Avon’s situation better. Given the company’s struggles, Wall Street lowered expectations, but the cosmetics company’s third quarter results couldn’t even match the lowered expectations. Revenue fell 8% to $2.6 billion. Net income was $32 million compared to $165 million in the same quarter a year ago. McCoy’s comments were of no value to investors who wanted some insight into turnaround plans. The length of her tenure has given her enough time to articulate them, particularly since she is a seasoned executive who was vice chairman of pharmaceuticals at Johnson & Johnson. McCoy said at the time of the last earnings release, “we have identified the first critical actions to return Avon to a position of financial health and improve our competitive position. With a clear focus on growing the top-line, managing costs, and improving our working capital, I am confident that we are moving Avon toward a steady recovery.” There is nothing in that about how the company means to improve revenue — the most critical factor of all.
9. Debra Reed
> Sempra Energy (NYSE: SRE)
> Revenue: $10 billion
> YTD stock price: +30%
Last month, Debra Reed was named chairman of Sempra. She was named CEO in June 2011. Sempra, which runs San Diego Gas & Electric and Southern California Gas, posted a better than expected quarter. Analysts had estimated the company would earn $1 per share. The actual results were $1.33 per share. However, Sempra lowered guidance, which knocked its shares down the day after it made the announcement. Despite that rough patch, Sempra shares are up almost 30% so far this year. Part of Sempra’s appeal is its dividend, which yields 3.36%, and can be considered a safe harbor for investors who are skittish about the market. Sempra has been praised for its move into renewable energy, which may eventually offset its reliance on the heavily regulated utility sector. Under Reed, it is expected that Sempra’s recently construction and operation of solar and wind facilities will continue, which will take the company beyond its conventional revenue sources
-Douglas A. McIntyre