As more women gain prominence on Wall Street, many still complain that the career path is fraught with pitfalls. The new reality is that women can and do succeed in the investment community, but that their success is confined to certain pockets of activity. For instance, women have scaled the heights of investor relations and made steady gains in securities research and analysis; on the other hand, women are rarely portfolio managers or responsible for large pools of capital.
Everyone agrees that it’s much easier for women to excel in investment careers today than it was ten or 20 years ago. Elaine Garzarelli, founder of Garzarelli Capital Management, recalls that in the early 1970s, there were so few women in investment houses that ‘we didn’t even know how to dress. ‘ The media has helped women gain prominence. ‘The TV people and the newspapers are much more willing to quote women now, thinking women have something to say,’ she maintains. ‘Fifteen to 20 years ago, you’d only see men giving their opinions.’
In 1967 Muriel Siebert, now president of Muriel Siebert & Co, was the first woman to win a seat on the New York Stock Exchange. She describes her early experiences as interesting, awesome, and tough. ‘Whenever you break a tradition – a 175 year-old tradition, in this case – some people are going to like you and some are not going to like you,’ she says. ‘For ten years, I could say it was 1,365 men and me.’
Within the past 30 years, Siebert has seen women make great advances. ‘Men today trust women with running their money. That didn’t happen 20 years ago,’ she says. According to Siebert, the rise of indexes and other performance measurements has made it easier for women to prove themselves. ‘If you outperform the yardstick, they don’t care if you’re a woman or black. All they know is you’ve beaten the Dow,’ says Siebert. ‘Money has no gender.’
Numbers don’t lie
Statistics show that women have gained more equal standing in some financial fields but not in others. For instance, the number of female analysts has steadily increased. Garzarelli says that in 1971, she was the only female analyst at Drexel; by 1994, nearly half the research department at Lehman Brothers was female. She attributes such gains to the willingness of women to work hard. ‘Women are meticulous in their research,’ says Garzarelli. ‘They haven’t been taught to talk their way out of things.’
Nancy Hobor, IRO at Morton International in Chicago, agrees. Since 1981, when she entered IR, she’s seen more women in investor roles, from buy-side and sell-side analysts to portfolio managers. In fact, she estimates that one-third of the institutional calls she receives are from women, and she notes that four of Morton’s 14 sell-side analysts are women.
Nonetheless, women money managers remain the exception, not the rule. Art Rivel, president of Rivel Research Group in Westport, Connecticut, says that in a sample of 200 portfolio managers randomly selected each year since 1983, only 10-15 percent have been women. Moreover, the numbers haven’t improved significantly with time. In 1997, only 10 percent of the sampled portfolio managers were women.
Cynics note that women have had more trouble infiltrating fields like portfolio management and trading, where gargantuan salaries are earned and men feel territorial. According to one female portfolio manager with 27 years in the business, who doesn’t want to be named, ‘It’s a man’s game. It’s an old boys’ network. It’s who you know as much as what you know.’ The higher up the scale you go, she says, the more men tend to dominate.
No matter how hard they try, women simply are not part of the club, contends Garzarelli. ‘You’re not always in the loop with the political atmosphere. You don’t play golf with the fellows. You don’t work out with the fellows. You don’t share off-color jokes,’ she says. ‘Men want to play with the men. I don’t think they want women in the club.’ The solution? ‘Women have to work harder to excel,’ says Garzarelli. ‘You just have to be excellent in what you do.’
IR: the exception
Of all the jobs in the investment world, investor relations is generally viewed as one of the most friendly toward women. Today, half of the National Investor Relations Institute membership is women, while fifteen years back, only around 25 percent of IROs were women, according to Louis Thompson, Niri president and chief executive. He points out that companies like to hire women for the highly visible investor relations officer position to help balance the preponderance of men at the top of most organizations. What’s more, says Thompson, ‘Women are good at the investor relations job. Women are good at cultivating relationships.’
In fact, female gender may even be a plus in landing an investor relations post. ‘It’s not unusual for executive recruiters to be specific and prefer a woman,’ says Thompson. However, preferential treatment isn’t something that all women applaud. ‘I hope that companies pick the strongest person for the job, whatever gender they are,’ says Morton International’s Hobor.
Thompson acknowledges that, despite the success that women have enjoyed in investor relations, they are generally not being paid as much as their male counterparts. According to Niri’s last salary survey, the average female investor relations officer earns only 67 percent of what a man makes. A hefty difference in a supposedly equal world.
This discrepancy is partially attributable to tenure issues, according to Thompson; many women have held their positions for a shorter time than male IROs. He also notes that at smaller, newly-public companies, the female assistant to the CFO is often promoted to the IRO slot without receiving the level of compensation that an IRO hired from outside would typically earn. Nevertheless, Thompson believes that these factors don’t fully explain the male/female salary differential.
Down the gender line
Compensation is an important issue for women in the investment community. But earning power is a double-edged sword; an astronomical salary can leave women vulnerable to jealousy and even dismissal. In 1994, Garzarelli was fired from Lehman Brothers one day after Institutional Investor named her best qualitative analyst for the eleventh year running. She blames the conflict on internal politics. ‘I was making more than the president that year,’ she recalls.
Although Garzarelli was deluged with offers, she feared that a $2 mn salary would again make her a potential target when it came time to downsize. So she started her own business. Entrepreneurship is a route that most of the women interviewed heartily endorse.
Here’s Garzarelli’s advice: ‘What you do is go to a company when you’re young and leave it in your 40s. Women are not good in corporations over 40.’ She maintains that men like to mentor young women, but become nervous and defensive when a woman is an equal or partner. Women over 40 have ‘a lot of experience. They’re making a lot of money,’ says Garzarelli. ‘It hits too close to home.’
Like Garzarelli, Siebert views the trend of women striking out on their own as a positive one. She is optimistic about the gains women have made in financial markets thus far, and says, ‘It’s getting better, but we still have a long way to go.’ For Siebert, true equality will be achieved once a woman rises to the executive position at a major NYSE-traded firm.
Whatever entrenched attitudes or biases may persist in the investment community, one thing’s clear: women at the top of the heap are pragmatists. The successful say they’ve worked harder, done more, and proven themselves by beating the market. ‘The playing field isn’t level,’ concludes the female portfolio manager. ‘But if all you’re going to do is complain about the playing field, you shouldn’t play the game.’
