Annals of gender diversity, Pimco edition

By Felix Salmon
April 1, 2013

Over the past three years or so, Pimco has been making a concerted effort with respect to gender equality and women’s empowerment. And this effort is being led from the very top: check out CEO Mohamed El-Erian’s speech to USAID last year, or his more recent rave review of Sheryl Sandberg’s book. El-Erian is clearly committed to overcoming institutional biases at Pimco and to ensuring that his company “employs, enables, develops, stimulates, and retains” the very best workforce it can — including, of course, the very best women.

So, how’s that working out for him? Google “Pimco leadership”, and you end up at this page, which lists the firm’s “Global Executive Leadership” as well as all of its managing directors. The former list has six names on it; all of them are men. The latter list is longer — some 58 names. And if you look closely, you should be able to find 7 women there, alongside 51 men.

This is the face that Pimco shows to the rest of the world, and it’s incredibly male-dominated. Internally, the numbers aren’t much better. The two most important committees at Pimco are the investment committee and the executive committee; neither of them has more than one woman. And if you look at Pimco’s professionals more generally, everybody with a job title of “vice president” or above, the total proportion of women is 23% — which is exactly the same as it was three years ago, when the current diversity exercise began.

This doesn’t, in and of itself, mean that Pimco hasn’t changed. But if you look at the literature, the tipping point seems to come when make up more than 25% to 30% of senior management — that’s when the culture really changes, with all the attendant benefits for all employees and for the business as a whole.

I’ve obtained the numbers, however, and the proportion of women at Pimco shrinks, unhelpfully, the higher up you draw the line. They’re 35% of Pimco as a whole, including administrative and support staff. They’re 23% of VPs and above; 19% of SVPs; 17% of EVPs; 12% of MDs; and 0% of the executive leadership.*

It’s easy to come up with reasons for this. In the wake of the financial crisis, for instance, business-school graduates in general have been much less inclined to go into finance — but the decline has been significantly greater among women than among men, which means that it’s harder for Pimco to find female applicants for its new jobs. And once people arrive in a senior position at Pimco, they tend to stay there: turnover is low, which means relatively few opportunities for women to advance into the senior executive ranks.

But at some point, stasis has to become unacceptable, and someone has to be held responsible for ending it. El-Erian is genuinely committed to creating a more woman-friendly work environment. Doing so is good for its own sake, it’s good for his daughter’s future, and it’s good for Pimco — not least because women tend to make better investors, and are much less likely to blow up than men are. El-Erian might even have succeeded in changing parts of the internal Pimco culture, although such things are incredibly hard to measure or disprove.

But at the same time, there’s a demonstrated syndrome where companies with a small number of women in senior management get stuck at that small number. A recent study shows something quite surprising:

We theorize that the presence of a woman on a top management team may reduce rather than increase the probability that another top management position in the same firm will be occupied by a woman. Using twenty years of panel data on the top management teams of S&P 1,500 firms, we find robust evidence for such negative spillovers, which are especially strong for women chief executive officers and within similar job categories.

Pimco has a very high-profile hire to make right now: the departure of Neel Kashkari means that El-Erian is soon going to announce a new global head of equities. The opportunity to appoint a woman to such a senior position doesn’t come along very often. Kashkari did very well in the position, but he’s also as macho as they come. Pimco doesn’t answer to any public shareholders, and cares less about optics than most public companies do. But as El-Erian continues to preach the equality gospel, people are increasingly going to start looking for hard evidence that his noble rhetoric is being matched by quantifiable real-world change.

*Update: I tweaked the numbers a bit, in light of more granular information; also, I got the progression wrong. At Pimco, SVPs are lower down the totem pole than EVPs.

And talking of SVPs, it turns out that CasualSophist, in the comments, is spot-on here: “I’d hazard to guess that the majority of the women with VP titles are client facing and not actively involved in investment selection / strategy.” While 19% of Pimco’s SVPs are women, only 11% of SVP portfolio managers are women.

Finally, I’m assured that while right now only one woman (Wendy Cupps) is a member of the Executive Committee, there was a point in the past during which there were two female MDs on the committee.

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Comments
7 comments so far

Don’t know the granularity on your data, but may also be instructive to look at the breakout between “client side” and “investment side” — I’d hazard to guess that the majority of the women with VP titles are client facing and not actively involved in investment selection / strategy.

Note: I’m not saying that there’s anything wrong with that; it’s just a disconnect that is pretty typical for the industry.

Posted by CasualSophist | Report as abusive

“Pimco doesn’t answer to any public shareholders, and cares less about optics than most public companies do”

I realize that Allianz allows PIMCO a large degree of autonomy, but PIMCO is a subsidiary of a publicly-traded company.

The amount of time spent on CNBC by El-Erian and Gross (and Kashkari, when he was still there) also suggests to me that PIMCO cares quite a lot about its public image. My educated guess is that has a lot to do with the amount of money that it manages for public pension funds and university endowments, who are also the sort of investors who might care a lot about the statistics cited in this post.

Posted by realist50 | Report as abusive

PIMCO has zero gender discrimination. Rather it discriminates against individuals (male or female) that aren’t willing to sacrifice their personal / family time for work. As a result, the leaders tend to be married to stay at home wives who run the households (there are senior woman where the opposite situation exists) or are unmarried / divorced.

The end result is that there are far more men in these senior positions as there tends to be more flexibility or a willingness to choose work over family.

Posted by Jake103 | Report as abusive

Jake103′s point is a good one — I’ve seen that in many insurance and investment firms.

I would also note that fixed income tends to be more of a “male game,” from what I have seen, and equities admits more women.

Posted by DavidMerkel | Report as abusive

Felix, how about looking in the mirror? A quick google of “Thompson Reuters Executive Team” shows a fancy page with 10 white men, one Indian man, and one black woman (double points here I guess). So you have less than 10% women, and less than 20% non-white management.

Even when I go to the bloggers in the Opinion dropdown on the top of this page only 3 out of 20 are female, or 15%. This is a decidedly non-executive group, and I would love to hear the excuse for why it is hard to find women who blog.

People who live in glass websites should not throw stones…

Posted by joe111 | Report as abusive

“PIMCO has zero gender discrimination. Rather it discriminates against individuals (male or female) that aren’t willing to sacrifice their personal / family time for work. ”

Exactly. I work in the non-profit sector and the one thing you can count on in this sector is that the men work 10% more hours than the women prior to pregnancy, and if you factor in pregnancy and the aftermath vastly more hours than women.

The average woman at my current firm works around 41.5 hours a month and constantly complains about tpay eqheir pay (I am serious most of them do)

Posted by QCIC | Report as abusive

Mangled reply above. That should read:

“PIMCO has zero gender discrimination. Rather it discriminates against individuals (male or female) that aren’t willing to sacrifice their personal / family time for work. ”

Exactly. I work in the non-profit sector and the one thing you can count on in this sector is that the men work 10% more hours than the women prior to pregnancy, and if you factor in pregnancy and the aftermath, vastly more hours than women.

The average woman at my current firm works around 41.5 hours a month and constantly complains about pay equity and discrimination (seriously they do). Meanwhile the average man puts in more like 46 hours and keeps quiet and gets a raise at the end of the year because when there is a deliverable due on a Monday and it is 16:00 on a Friday they either stay until 22:00, or they work over the weekend.

Meanwhile most of the women are out of here by 16:00 every day even if they showed up at 9:00. Granted a lot of this likely has to do with inequitable distribution of at home production in their families, but that is not our employer’s problem.

Posted by QCIC | Report as abusive
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