Female CEOs Out-Earning Men in the World’s Largest Corporations

In the quest for gender equality, it can seem like we’re stuck in a cycle of 'two steps forward and one step back'. Nowhere is this better reflected than in a recent analysis from The Wall Street Journal.

The number of female CEOs at S&P 500 companies stands at 28 – just over 5%. The Journal found, however, that when it comes to compensation, it’s a different story. Median compensation of US$11.6 million was reported for 382 male CEOs who had held their position for more than a year. Median remuneration for 21 equivalent female CEOs, meanwhile, was US$13.8 million – a small but significant positive. Also, for the first time in the WSJ’s 128-year history, three out of the 10 highest-paid executives on the list were women.

Why female CEOs could be out-earning their male counterparts

Female-led S&P 500 companies also generated a larger median shareholder return of 18.4%, compared to the 15.6% shareholder return for corporations directed by men in 2016. These stats echo a 2015 McKinsey study, which found that companies in the top quartile for gender diversity were 15% more likely to financially outperform the national median in their industry.

A BI Norwegian Business School study of  more than 2900 managers indicated that women may have better personalities for leadership. Five personality traits were assessed: extraversion, openness to new experiences, conscientiousness, agreeableness and emotional stability. Women scored higher than men in the first four out of five of these traits. A higher tendency to worry impacted the emotional stability score; nevertheless, the analysis suggested that women are more innovative, supportive, are clearer communicators, and are more likely to be recognized for their meticulousness.

The names of the three CEOs and a valuable credential two of them share

The three female CEOs who featured in the S&P 500 top ten for highest earnings are Meg Whitman at Hewlett Packard Enterprise Co, Virginia (Ginni) Rometty at International Business Machines Corp (IBM), and Indra Nooyi at PepsiCo Inc. Two out of three of these women are MBAqualified. Half of the women leading Fortune 500 companies have earned the degree in all.

Whitman obtained her MBA at Harvard Business School, while Nooyi first graduated with an MBA from the Indian Institute of Management - Calcutta and then pursued a Master's in Public and Private Management at the Yale School of Management. An interesting commonality between all three women was their decision to stay within their organizations and climb the ranks – not one of them being poached.

The experience and EMBA cocktail that can help get women to the top

That an MBA education can help women reach the top, combined with the fact these three female CEOs grew within their organisations points to the potential value of the executive MBA (EMBA), students of which remain in their jobs as they study.

Part of the executive MBA’s is in part-time flexibility, allowing its students to study, work and manage personal and family obligations. EMBA candidates are also experienced, having an average age of 38. This means being part of an entourage of peers who are already successful  in their careers, people who will act as an important network both during and after the almost two years (on average) of study. To this we can add the alumni network which expands those important contacts even further. Then of course there's the degree itself, providing the education that every good manager should arguably have – the fundamentals of successful business, alongside the latest trends and skills that disruptive leaders need to know.

Perhaps women today are still required to add more tools to their toolkit than men in order to stay competitive. If it is the case, or even if it’s not, an executive MBA, alongside a healthy record of industry experience could be the sort of  plus that  gets increasingly more female trailblazers into the commanding centres of companies such as those  listed in the S&P 500.