Yahoo's Marissa Mayer is a reminder that CEO is still elusive for women

Marissa Mayer

In the same week the United States gained its first female presidential nominee for a major political party, the country also lost one of its highest-profile female CEOs, with the announced $4.8bn acquisition of Yahoo’s core assets by Verizon.

When – and it looks inevitable – Marissa Mayer steps down from Yahoo, she will lose her status as head of part of a tiny and elite group of women who head publicly traded companies.

Why has it been so tough for women to reach the role of CEO, whether of a company or of USA Inc? Admittedly, when it comes to the White House there are more hoops to jump through: it’s a single job, and candidates have to win the support of a majority of all Americans, in elections that happen once every four years.

Theoretically, at least, it should be simpler for women to reach the corner offices of US corporations. It has been decades since they donned a feminine version of business suits (remember those silk shirts with little bow ties at the neck? Or the jackets with the padded shoulders?) and set off to conquer corporate America.

But if you look at the data, women still remain eerily absent from the C-suite, running only 22 of the companies in the Fortune 500.

There has been progress, to be sure. Just as no one now can sneer at the idea that it’s impossible for a woman to run for president, or run a giant multinational corporation, the kind of companies these women head aren’t confined to the pink ghettos of consumer products. Yes, Sheri McCoy is CEO of Avon Products, the quintessential women’s products company, but Marillyn Hewson leads Lockheed Martin, an aerospace giant, while Mary Barra is CEO of General Motors.

But do women still get a fair shot at reaching that corner office? Do they get treated equally when they’re occupying it?

Marissa Mayer would argue they don’t. In an interview with the Financial Times immediately after the announcement of Verizon’s acquisition of the business she had struggled for years to turn around, she hit out at what she claimed was “gender-charged reporting” by the media that dogged her efforts to lead the business. “We all see the things that only plague women leaders, like articles that focus on their appearance, like Hillary Clinton sporting a new pantsuit,” Mayer told the FT.

Admittedly, Mayer has drawn a lot of attention for being pregnant and giving birth (not once, but twice) while a CEO – something that male CEOs simply don’t do, and that it’s very unusual for any female CEO to do, if only because a typical CEO is in their 40s. She has posed for Vogue – something few male CEOs are called on to do. (Though they have their counterparts, being featured in “CEO porn” shoots for Forbes Life, Maxim and other men’s magazines.)

But while Mayer may have chosen to gripe about what she at least sees as a gender bias in the way her behavior is scrutinized and analyzed, there are more substantive complaints that many CEOs (if not necessarily Mayer herself) might well raise about the kind of situation they face once in the corner office.

Take executive pay, for instance. We’re all so accustomed to the idea that CEOs are lavishly overpaid, it may come as a surprise to realize that women who take on the role of CEO get much smaller reward when they do well, and are disproportionately punished if the value of the companies they lead suffers, according to a report published last year by the Federal Reserve Bank of New York.

The Fed staffers who co-authored the study discovered that for every $1m increase in the business, a male CEO received an extra $17,150 in incentive compensation, but a woman got $1,670. A 1% increase in the value of the company meant that a male CEO’s wealth soared 44%; that of his female counterpart crept higher by 13%. A 1% decline in the value of the company meant that the incentive compensation of a female CEO fell by 63%; that of a male CEO dropped by only a third.

Researchers also have identified a phenomenon they have dubbed the “glass cliff”: an equivalent to the all-too-well-known glass ceiling. It refers to what happens when women are set up to fail: when they are appointed to take on leadership roles that have a greater risk of failure. One study suggests that this might be due to preconceptions about stereotypically “female” skills: when a company is in crisis, survey respondents seemed to believe that a talent for communication and the ability to encourage teamwork was more valuable than “male” abilities, like decisiveness and competitiveness.

Certainly Mayer was taking on a troubled company: Yahoo, a pioneer of the early internet era, had been pushed to the fringes by newcomers like Google. Mayer was fighting to try and fight a new role and relevance for a large legacy organization.

Did GM’s board name Mary Barra to the CEO post solely for her management talents? Well, partly, but when she took the helm, the company was in the midst of its own crisis, having been accused of covering up defects in its cars that contributed to deaths among drivers. Leading GM out of that mess and restoring its brand was a high-risk job.

Certainly, the glass cliff may be contributing to the higher rate at which women CEOs fail and/or are ousted, even if it doesn’t completely explain it.

Mayer may not be a poster child for women CEOs. Ultimately, her turnaround strategy for Yahoo failed. And whenever she does decide to leave the combined Yahoo/Verizon entity, she could walk away having earned $137m over the four years of her tenure, depending on the final terms of her severance agreement and the timing of her departure. (That figure includes cash compensation, shares that she owns, the value of stock options she already owns and future options grants and more shares she is entitled to under the terms of her employment agreement.) That is in spite of the fact that, while Yahoo’s stock trades at more than double the price it did at the time she took on the CEO role in mid-2012, it has fallen more than 25% from its peak in late 2014.

But it would be a shame if corporate directors looked at Mayer’s costly pay package and uneven record to justify or rationalize failing to consider women as candidates for the CEO role – or perhaps worse, to consider them only for the role of the “fall gal”, setting them up to tumble over the glass cliff.

After all, at least one study, by Boston-based Quantopian, compared the performance of the 80 companies in the Standard & Poor’s 500 index that were led by women CEOs between 2000 and 2014, and found that women-led companies generated a return of 348%, while an investment in the S&P 500 itself would have yielded only 122%.

Now in light of that kind of data, ignoring women as CEO candidates seems to me not only like a class-action lawsuit waiting to happen, but also bad business.

Powered by Guardian.co.ukThis article was written by Suzanne McGee, for theguardian.com on Thursday 28th July 2016 12.00 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010