Women in California companies continue to make slight progress. More of California’s largest 400 public companies public companies than ever have women chief executive officers (CEOs), and fewer have no women in their C-suites and boardrooms. However, the annual University of California, Davis, study shows women still hold just one in eight of the senior executive and director positions in corporate California.
Overall, women hold 12.3% of the highest-paid executive positions and board seats in the state’s 400 largest public companies — a scant 0.75% point increase over last year, according to the UC Davis Study of California Women Business Leaders.
At that rate it will take fifty years for women in California companies to reach parity. I’ll be long dead. In the meantime, I’ll continue investing a disproportionate of my portfolio in companies with women at the top, betting such companies have better corporate governance and will outperform my other investments.
The UC Davis Graduate School of Management has found very incremental gains during the 11 years it has tracked the representation of women in these key decision-making roles. The percentage of women in these key corporate leadership positions has inched up from 9.6% in 2010 to 12.3% in 2015, which represents 623 women in the 5,083 highest-paid executive and board positions at the 400 firms this year.
Some strides are being made in the corner office. The number of female CEOs rose from 14 to 17, a 21% increase over last year, and a 55% increase since 2006. But these 17 female CEOs still represent only 4.3% of the 400 CEO positions. Companies with women at the helm have, on average, 38% more female leaders
than companies with a male CEO.
Together, the 400 companies represent nearly $5 trillion in stock market value; among them are global leaders in technology, health care, consumer products and pharmaceuticals. Said Ann Huff Stevens, dean of UCD’s management school,
We know that a more representative, diverse group of leaders can change decision making and outcomes in companies. California has been a leader in many areas, and these results point out the opportunity for
California to take the lead in increasing women’s presence in corporate leadership.
Among the 400 public companies, the top 25 firms identified in the study — those with the highest percentage of female executives and board members — have a median return on assets and return on equity that are at least 74% higher than for the 400 public companies in the study.
Only two companies — upscale kitchen and cookware retailer Williams-Sonoma of San Francisco and real estate trust LTC Properties of Westlake Village — have equal numbers of women and men in top
executive positions and board seats. Only one company has appeared in the study’s top 25 list for 10 consecutive years: AMN Healthcare Services Inc. of San Diego.
At the bottom are 92 companies with no women among the highest-paid executives or board directors. These include brand names such as digital television pioneer TiVo Inc. in San Jose; Skechers U.S.A. Inc., a $2 billion global footwear maker headquartered in Manhattan Beach; and Palo Alto Networks, a leading international network security firm in San Jose that counts half of the Fortune Global 2000 companies as clients.
The study is the only one of its kind to focus on gender diversity in the boardrooms and executive suites of corporate California.
In September 2013, the California Legislature passed the first resolution in the United States calling for more women on corporate boards. The UC Davis study shows that only 17.5%, or 70 of the 400 largest public companies in California, have met the resolution’s nonbinding standards.
Among the findings in this year’s UC Davis study:
- Above the glass ceiling — With 57% top female leaders, Williams-Sonoma Inc. has the highest percentage since the study began. Including CEO Laura Alber, four of Williams-Sonoma’s five
highest-paid executives are women, and the company has four women on its nine-person board. Eleven of the study’s top 25 firms have a female CEO.
- The glass ceiling intact — The number of companies with no women in director and highest-paid executive positions dropped to 92, a new low, below 100 for the first time. This is a 33% decrease
since 2010, showing more women are being appointed to existing or new board seats and executive positions. The largest concentration of these 92 companies (30) are headquartered in Santa Clara County.
- Corporate boardrooms remain male dominated — Although still low overall, the percentage of women directors in California has risen steadily from 8.8% in 2006 to a high of 13.3% in 2015. Since 2006, when the study began tracking the largest 400 companies in California, the share of female directors has risen by 4.4 percentage points — incremental, but a 50% increase.
- While women hold 29 more board seats (432 of 3,260 total), the total number of board seats has increased by 20 since last year, diluting the growth in the percentage of seats held by women. Women
do hold an increasing share of nominating, compensation and audit committee chair positions, all of which increased at least 5% from last year.
- A majority of the companies still have no women among their highest-paid executives. The percentage of women who are reported to be highest-paid executives has risen to 10.5% in 2015 from 7.8% in 2007, the first year those data were collected, for a 35% increase over that time.
- Where are the female directors? — Among counties with at least 20 companies, San Francisco County has the highest percentage of female board directors (20.2%), and Orange County has the lowest
(10.5%), followed closely by Los Angeles County (11.6%) and Santa Clara County (12.7%). Regionally, the Bay Area (14.5%) leads Southern California (11.7%).
- Executives on location — Among counties with at least 20 companies, San Francisco County has the highest percentage of highest-paid women executives (15.1%), and across the bay, Alameda County (7.9%) has the lowest, followed closely by San Diego County (8.0%) and Santa Clara County (8.6%). Regionally, the Bay Area (10.9%) leads Southern California (9.6%).
The study tracks the members of the boards of directors and the five highest-paid executives for each company as reported to the SEC using data available as of Aug. 31, 2015. The 400 companies were selected based on highest market capitalization.
To publish the study, UC Davis partners with Watermark, a Bay Area-based nonprofit that is focused on increasing the representation of women in leadership roles. Said Watermark CEO Marlene
We’re pleased to see some movement forward but we want to see much more movement and at a much faster pace. This study is important in terms of tracking our success and determining what more we have to do to achieve gender equity in the top spots in corporate California. And from this study, we’ve created the Watermark Index, which looks specifically at how well Bay Area companies are doing in this regard. The UC Davis study, and now our Watermark Index, will continue to serve as important benchmarks as we go forward.
- Industry-by-industry statistics
- County-by-county statistics
- UC Davis database of the 400 companies and executive compensation
- Additional resources
Many thanks to study author Amanda Kimball who has worked in this important report annually for many years.
Women in California Companies: Investment Strategy
Last year, instead of just blogging about the study I decided to use it as an investment tool. Here’s the results: Medivation (MDVN, -16%), Genomic Health (GHDX, -10%), Bio-Rad Laboratories (BIO, +16%), NETGEAR (NTGR, +22%), Symantec (SYMC, -22%), Visa (V, +22%), Yahoo! (YHOO, -34%), SciClone Pharmaceuticals (SCLN, +5), and Walt Disney (DIS, +32). My results beat the NASDAQ or S&P 500. Of course, results depend on how much was invested in each. I didn’t equal weight.
Women in California Companies: Corporate Governance Rating
Just out of curiosity I looked up the ISS rating for the top five companies this year and compared them with the first five in the report’s alphabetical list of California companies with no women directors. Lower scores are better. Results below:
Five Companies with Highest Percent of Women at Top
- Williams-Sonoma Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 1.
- LTC Properties Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 4.
- Halozyme Therapeutics, Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 10.
- American States Water Company’s ISS Governance QuickScore as of Nov 1, 2015 is 3.
- Medivation, Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 5.
- 4,6 average
Five with No Women Directors
- 8×8 Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 4.
- A10 Networks, Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 10.
- Abaxis, Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 2.
- Acacia Research Corporation’s ISS Governance QuickScore as of Nov 1, 2015 is 9.
- Aerie Pharmaceuticals, Inc.’s ISS Governance QuickScore as of Nov 1, 2015 is 9.
- 6.8 average
ISS rates companies on Audit, Board, Shareholder Rights and Compensation to arrive at their QuickScore. This was just a small sample but I think it is highly likely that companies with more women at the top are more likely to be scored better on average than those with few or no women at the top.