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Do "Powerful Women" Increase Shareholder Value?

Published: Tuesday, 6 Oct 2009 | 9:59 AM ET

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By: Ariel Nelson
Director of Market Data & Content Services

US Banker just released its list of the Top 25 Most Powerful Women in Banking (see the complete article and list here). Does having high powered talent translate into shareholder value? We took a look at the companies that these women work for to see how they perform relative to the industry.

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Note the criteria used for ranking - US Banker writes on its website that ranking "is not an exact science — and it's not easy, especially in a year like this past one. Performance counts, to be sure, but editors also recognize that a bank's numbers could be skewed by an event like re-paying TARP money or selling a business unit to raise capital. That's why other factors, like a nominee's job responsibility, management style, crisis-management skills, influence within the industry, and charitable endeavors are given strong consideration."

That being said, the list represents a wide array of banks. Of the biggest banks, Wells Fargo [WFC Loading... () ] had three names on the list while JP Morgan [JPM Loading... () ], Citigroup [C Loading... () ], Bank of America [BAC Loading... () ], and US Bancorp [USB Loading... () ] each had two.

>> Do Happy Employees Increase Shareholder Value?

On average, the banks with the powerful women have outperformed the broader S&P 500 Financial and Banking sectors in the past three months (both weighting for repeats and on a straight average look). On a YTD basis, the women's' banks outperformed the Banking Sector but not the Financial Sector and on a full year basis, the banks have underperformed agianst both benchmarks. Keep in mind that in this past year of turmoil, many of these women may have changed positions.