UM Professor’s Study Reveals Role of Sexism in CEO Activism

Vishal Gupta

Women CEOs are more likely than male CEOs to be targeted by activist investors, a University of Mississippi business professor’s research has found.

Vishal Gupta, associate professor of management, began working with Seonghee Han of Frostburg State University and Sandra Mortal and Sabatino Silveri of the University of Memphis on the study in August. The team’s findings, titled “Barbarians at the Gate: Do Women CEOs Face Greater Threat than Male CEOs from Activist Investors?” were shared recently in a UM School of Business Administration talk.

“We were reading articles about activist investors targeting companies, and it seemed disturbing that although fewer large public companies have women CEOs compared to male CEOs, the articles we read were so often about activists targeting women CEOs,” Gupta said.

“We collected 13D filings (the Securities and Exchange Commission requires those wanting to take an active position against a company to file Schedule 13D) and merged those with Execucomp data. Our sample is large publicly traded firms over the 1996-to-2013 time period.”

Gupta and his colleagues have two main findings from their study.

“First, women CEOs are more likely than male CEOs to be targeted by activist investors,” he said. “Second, women CEOs are more likely than male CEOs to be mobbed by activist investors.”

Being mobbed, also referred to as ‘wolf-pack attack,’ is when several people attack a person, with or without deliberate coordination.

The team also found that the likelihood of women CEOs losing their jobs after being targeted by activist investors almost doubles, which is much higher than the increase in likelihood of male CEOs losing their jobs in the aftermath of similar attacks.

“Almost every day now, the Wall Street Journal and other business publications have articles about activists taking positions against the management of the companies they hold stock in,” Gupta said. “These activists usually defend their aggressive stance by saying that they are targeting undervalued companies – so looking out for shareholders – but our research reveals insidious – as well as subtle and invisible – biases in their targeting of which even the activists themselves may not be aware.”

Gupta presents ‘Barbarians at the Gate: Do Women CEOs Face Greater Threat From Activist Investors Than Male CEOs?’

More broadly, the results also suggest that women in leadership positions are subjected to greater scrutiny than male leaders, which is a problem and concern when one considers that workplace equality is a prized goal in modern societies.

Ken Cyree, dean of the Ole Miss business school, said he is pleased that Gupta is able to contribute so quickly to the school’s academic environment and looks forward to his future contributions.

“We are glad to have Dr. Gupta join our faculty and continue the proud tradition of impactful scholarship in the School of Business Administration,” Cyree said. “It is especially meaningful and enhances our reputation when our research is used to create value and enhance the effectiveness of businesses, and with his work, Dr. Gupta is contributing to these goals.”