Many women CEOs saw raises last year, but ranks remain thin

Friday, May 28, 2021 | Sarah Skidmore Sell, AP Personal Finance Writer

Mary Barra
In this July 16, 2019, file photo General Motors CEO Mary Barra speaks during the opening of their contract talks with the United Auto Workers in Detroit. Most of the women running the biggest U.S. companies saw their pay increase last year, 2020, even as the pandemic hammered the economy and many of their businesses. (AP Photo/Paul Sancya, File)

Most of the women running the biggest U.S. companies saw their pay increase last year, even as the pandemic hammered the economy and many of their businesses.

Despite those gains, however, the median pay for female chief executives actually fell in 2020. Already a small group, they saw several high-profile women leave their ranks last year. That means changes in pay for only a few helped skew the overall figures, highlighting just how slow diversity has been to catch on in Corporate America’s corner offices.

Of the 342 CEOs in the AP’s and Equilar’s compensation survey of S&P 500 companies, only 16 were women. That’s down from 20 a year earlier, as CEOs like IBM’s Virginia Rometty left their posts. The survey includes only CEOs who have served at least two full fiscal years at their companies, in order to avoid the distortions of big sign-on bonuses. The companies must have filed proxy statements between Jan. 1 and April 30.

The majority of women CEOs in this year’s survey saw a raise in compensation: 81% of them (13 of 16), versus 60% of all male CEOs in the survey. But Duke Energy CEO Lynn Good saw a nearly 3% decline in compensation to $14.3 million. She’s right in the middle of the pay scale among the survey’s women CEOs, so that helped set the median pay for them last year at $13.6 million. Median means half made more than that level, and half made less.

That level marks a 1.9% drop from the median that those same female CEOs earned a year a before. And it compares with a median of $12.6 million for all male CEOs in this year’s survey, which is 5.2% higher than the median for them from a year earlier. The overall median for the survey was $12.7 million.

While the number of women in the survey dropped last year, experts say change is happening, just very slowly as companies have failed to properly recognize and prepare more women for the role.

“It’s a slow process,” said Lorraine Hariton, President & CEO of Catalyst, a nonprofit that aims to advance women in the workplace. “But the reasons are we are still dealing with cultures embedded with unconscious bias and building the pipeline of women CEOs takes time.”

Lisa Su, CEO of chipmaker Advanced Micro Devices, topped the list with a compensation package worth $27.1 million. That included a base salary of just over $1 million, a cash bonus worth $2.5 million and stock and option awards worth nearly $23.5 million. AMD’s stock nearly doubled in 2020 after being the top-performing stock in the S&P 500 the prior two years.

A year ago, Su was the highest paid CEO in the Equilar analysis, man or woman, with a pay package worth $58.5 million, largely due to stock grants worth $53.2 million.

General Motors CEO Mary Bara ranked second among women with a compensation package worth $23.2 million. And Northrop Grumman’s CEO Kathy Warden was third with pay valued at $19.7 million.

Overall, many CEOs took a cut in salary last year because of the pandemic, but got more in stock awards and other compensation. Pay for female CEOs largely followed a similar pattern but because of the small sample size it is difficult to draw conclusions as any one minor adjustment can skew the results.

There are some signs of change, with more women in top management. JPMorgan Chase recently placed two women in roles where they could potentially succeed CEO Jamie Dimon. And executive recruiting firms say they see increased interest from companies, particularly as research shows that having a more diverse company leads to better results.

“It’s just good business,” said Jane Stevenson, vice chair at organizational consulting firm Korn Ferry. “It’s no longer a ‘Should more women be in business?’ More diverse pipelines produce better outcomes. As more businesses prove it can be done over time, then positive peer pressure kicks in.”

Don Lowman, senior client partner at Korn Ferry, expects the evolution will continue as well as new leadership with different attitudes and perspectives help shape companies moving forward. Lowman and Stevenson said this is true not just for women but for leaders of different races as well. The executive suite has long been dominated by white males.

“This is a law of supply and demand,” Stevenson said. “We have the demand side cultivated (in the boardroom), but now we need the supply side to be cultivated.”

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7 Hotel Stocks Just Waiting For the Vaccine

Like any group of stocks related to travel and tourism, hotel stocks saw a steep drop in share prices in 2020. The leisure and hospitality sector that once had 15 million employees has lost 4 million jobs since February.

Many major cities will be feeling the ripple effects of the Covid-19 pandemic for years. However, there is ample evidence that shows the pandemic may be coming to an end. The number of new cases is dropping. The number of those getting vaccinated is rising. And even in the cities with the most restrictive mitigation measures, the slow process of reopening is beginning.

All of this can’t come fast enough for individuals who rely on the travel and tourism industry for their livelihood. Hotel chains had at least some revenue coming in the door. And when earnings season concludes, the more budget-friendly hotel chains may realize revenue that is 75% of its 2019 numbers. But that is not enough to bring the hotels to anywhere near full employment. Particularly with hotels that have bars and restaurants that have remained closed or open at limited capacity.

Many economists are optimistic that travel may begin to look more normal by the summer of this year. And the global economy may deliver 6.4% GDP growth this year. With that in mind, the hotel chains with the best fundamentals and the broadest footprint will be in the best position as the economy reopens.

View the "7 Hotel Stocks Just Waiting For the Vaccine".

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Duke Energy (DUK)1.8$99.61flat3.88%57.25Hold$102.40
JPMorgan Chase & Co. (JPM)2.2$147.92flat2.43%11.75Buy$150.61
Advanced Micro Devices (AMD)2.0$84.65flatN/A36.02Buy$97.33
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