News For You - June 2003

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Top Women Make Salary Gains
An Apparent Heir at Xerox
What’s Holding Women Back?
Educated Women Flock to Usual Jobs
Study on Friendships Among Women
The Surge in Female Entrepreneurs
First Woman Appointed Dean of Harvard Law School
Census Bureau Finds Persistent Wage Gap

Top Women Make Salary Gains
Items of interest from the 2002 proxy statements of selected Philadelphia-area companies filed with the Securities and Exchange Commission. Proxies are mailed annually to shareholders and include information about management and directors and their compensation.

Women continue to make progress in reaching the top ranks of the highest-paid managers at the Philadelphia region's publicly traded companies - but they still have a long haul to catch up to their male counterparts.

In 2002, 67 women made the list of more than 1,000 highly compensated individuals, compared with 57 in 2001.

As it did in 2001, the top spot in total compensation went to Jackwyn Nemerov, who resigned more than a year ago as chief operating officer of Jones Apparel Group Inc. She received about $13 million, including the value of exercised stock options. In second place was Rhonda Brown, president and chief executive of Jones' footwear, accessories and retail group, who received a total of $3.6 million.

That compares with total compensation of $195 million for former MBNA Corp. CEO Alfred Lerner and $48.3 million for current CEO Charles M. Cawley.

The top female earner in salary and bonus alone was Mary F. Sammons, who on June 25 will become president and CEO of Rite Aid Corp. Now president and chief operating officer, Sammons took home $3.2 million in 2002. Next came Dorrit J. Bern, CEO of apparel-retailer Charming Shoppes Inc., who had total compensation of $2.8 million last year and was second on the list in 2001.

Only five other women on the list of 67 held the title of chief executive officer: Betsy Z. Cohen of RAIT Investment Trust, Deborah M. Fretz of Sunoco Logistics Partners, Demetra M. Takes of Harleysville National Corp., Donna M. Coughey of Chester Valley Bancorp, and Sherrie L. Woodring of Inrange Technologies Corp., who resigned in July 2002.

Other female executives who made at least $1 million were Debra K. Osteen, vice president of Universal Health Services Inc., $1.6 million; Justine F. Lien, chief financial officer of Integrated Circuit Systems Inc., $1.5 million; Rosemary Cauchon, senior vice president of Advanta Corp., $1.5 million; Pamela B. Strobel, executive vice president of Exelon Corp., $1.5 million; and Rebecca C. Matthias, president of Mothers Work Inc., $1.1 million.

There may well be other women at privately held companies making $1 million or more, or who outpaced the best-paid women. This survey includes only those at publicly traded companies in the region that must report executive compensation to the SEC.

- Tom Belden

(Philadelphia Inquirer, June 1, 2003).

An Apparent Heir at Xerox
Ursula M. Burns doesn't play golf. She doesn't belong to the local country club. Small talk is not her strong suit. And she insists on being home on weekends.
She sounds like an unlikely climber on the Xerox corporate ladder. But up she is going, rung by rung. Since she joined the company two decades ago, Ms. Burns has moved through engineering, manufacturing, various product divisions and a senior vice presidency.

Now she is close to the top. In December, Ms. Burns, 44, was named president of Xerox Business Group Operations. Under her umbrella — or, more appropriately now, circus tent — are the businesses that provide more than 80 percent of Xerox's sales, as well as the engineering, manufacturing and other logistical functions that keep Xerox humming.
Even though Anne M. Mulcahy, Xerox's first female chief executive, is only 50, many people have already pegged Ms. Burns as her successor.

" When you think about who will follow Anne Mulcahy, you can't not consider Ursula Burns," said David A. Nadler, chairman of Mercer Delta Consulting and a longtime consultant to Xerox.

One can almost here Xerox outsiders asking, Ursula who?
Xerox's crises of the last few years, which included a near bankruptcy (as well as accounting problems that resulted in a $10 million fine), made Ms. Mulcahy a familiar figure as she traveled, trying to reassure employees, customers, shareholders and reporters that Xerox, while ailing, was not dead. In the meantime, Ms. Burns was streamlining things back home.

She wrenched $250 million from Xerox's manufacturing operations by hiring an outside contractor, Flextronics International, in 2001, to make many Xerox products. She masterminded last year's often-contentious union negotiations. She coordinated security procedures before the war in Iraq.

All told, she washed away the red ink and prepared Xerox to go from defense to offense. A month ago, Xerox effectively declared war on Canon and Ricoh, its archrivals in the lucrative market for midspeed digital copiers and printers, by introducing 21 new products and cutting prices on many older ones.

" Ten percent of that was Anne, 90 percent was me," Ms. Burns said during a recent two-hour phone conversation. "Essentially, I'm the Ms. Inside for the operational side of the business."

Hmm. For a self-described Ms. Inside, Ms. Burns has been fielding media calls, talking at investor meetings, visiting customers and otherwise building up a lot of outside credibility. "Ursula is articulate, she has deep knowledge, she's credible — and, yes, we are developing her externally," Ms. Mulcahy said.

Ms. Mulcahy says she has not anointed a successor — yet. For Ms. Burns, that may be just as well; even her fans point to parts of her executive persona that need work.
" It's hard sometimes to persuade her that the right thing to do is not always apparent from the financials," said Gary Bonadonna, director of the Rochester unit of the Union of Needletrades, Industrial and Textile Employees, which represents Xerox's manufacturing workers.

Others say she has yet to strike a perfect balance of over- and under-managing. `She's quick to help when I ask, and rarely butts in when I don't," said James J. Miller, president of the Xerox Office Group, who has reported to Ms. Burns since January. "But, yes, she sometimes asks for signature authority over things I think should be my decision."
Even Ms. Mulcahy suggests that Ms. Burns "focus more on listening skills, and on not acting too quickly." But, she added, "every area of weakness is one that she can easily fix."
Ms. Burns has burnished rough edges before. After all, she is not to the executive manner born.

Ursula Burns grew up in "the Projects," a large low-income housing community on Delancey Street in Manhattan. "There were lots of Jewish immigrants, fewer Hispanics and African-Americans, but the common denominator and great equalizer was poverty," she recalled.

Ms. Burns was the middle child of three born to two different fathers. Neither man participated much in the family's life, she said, and her mother took in ironing and ran a day care center from home. Somehow, she was able to send all her children to Catholic schools. "She felt it was the only way to get us good educations, and keep us safe," Ms. Burns said.

She excelled at math and received an engineering degree from the Polytechnic Institute of New York. Xerox, through the graduate engineering program for minorities, paid for part of her graduate work at Columbia. That program included a summer internship at Xerox, and when she graduated in 1981, she joined Xerox full time.

African-Americans from New York ghettos were not common at Xerox, but Ms. Burns never saw her "otherness" as a liability. "My perspective comes in part from being a New York black lady, in part from being an engineer," she said. "I know that I'm smart and have opinions that are worth being heard."

Others recall that she was never intimidated by superiors. "Even in her 30's, she was a smart, unconventional thinker who'd embrace new ideas even while older executives at the table were rejecting them," said Mr. Nadler, the consultant. Her youthful fearlessness was particularly attractive to Lloyd F. Bean, a Xerox scientist 20 years her senior whom she began dating in 1981. They were married in 1988. They live in Rochester with Malcolm, Mr. Bean's 14-year-old son, and Melissa, their 10-year-old daughter.

Mr. Bean retired two years ago, and Ms. Burns could theoretically spend more time at work. She does not. She is adamant about spending weekends with the family and about working at home only after the children are asleep. She tries to run 35 minutes a day and works out with a personal trainer twice a week — but those activities, too, are done either in the early morning or late at night.

She also fits community service into the schedule, never missing a board meeting of the Rochester Business Alliance. "She always makes it, even if she has to come straight here from the plane," said Sandra A. Parker, the alliance president.

There are a lot of reasons for that. Yes, she feels a sense of duty to the group. And yes, she likes kibitzing with Ms. Parker, a personal friend. But she is also able to talk up Xerox to other executives on the alliance board. "It's a good place to hone my selling skills," Ms. Burns said.

Honing Ms. Outside skills, eh? So she really is preparing to assume the chairman's mantle?

" Come on, it's too soon to think of that," she said. But, she could not resist adding, "I guess I'm a darned good option for a candidate."
- Claudia H. Deutsch

(Philadelphia Inquirer, June 1, 2003).

What’s Holding Women Back?
Catalyst recently completed a survey of Fortune 1000 CEOs and women executives at the vice president level and above. A clear majority of the female executives surveyed cite numerous barriers such as exclusion from informal networks, stereotyping, lack of mentoring, shortage of role models, lack of accountability on the part of senior leadership, and limited opportunities for visibility. CEOs also acknowledge these obstacles but in many cases, seem less convinced of their significance. Seventy nine percent of women and 90% of the CEO’s did agree that lack of general management or line experience is a primary obstacle to advancement. About two-thirds of women and more than half of the CEO’s also agree that the failure of senior leadership to assume accountability for women’s advancement is a key barrier.

(Source: Harvard Business Review, June 2003)

Educated Women Flock to Usual Jobs
The American Association of University Women (AAUM) recently discovered that although women today are more educated and employed at higher levels, they remain confined to traditional “pink collar” jobs. The highest percentage of college-educated women are working in teaching and nursing jobs, neither of which are among the 10 most common jobs for college-educated males. As cited in the 2002 Census Bureau data, the overall most common occupations for women are secretaries, bookkeepers, sales supervisors, nurses, waitresses, receptionists and cooks. Men share just two of the most common occupations as sales supervisors and cooks.

Women have achieved equality with men in receiving four-year college degrees and are more likely to work in managerial and professional careers today than 20 years ago. However, women are still “not sufficiently prepared to move into the better-paying, higher-status, and fastest-growing occupations” like high tech jobs, according to the AAUM study. Women have made significant advances in the workforce and in the educational arena, but they are absent from the profitable and rising occupations.

(Source: The Philadelphia Inquirer. May 5, 2003).

Study on Friendships Among Women
A study conducted by UCLA suggests that friendships between women can counteract stress. Women respond to stress by releasing brain chemicals that leads them to make and maintain relationships with other women according to the study. The recent findings by UCLA reverse the five decades of stress research, most of which was done on men. Before this study, scientists believed that “when people experience stress, they trigger a hormonal cascade that revs the body to either stand and fight or flee as fast as possible.”
Now researchers believe that women have a larger behavioral range than just the survival mechanism of fight or flight. According to Dr. Laura Klein, an Assistant Professor of Biobehavioral Health at Penn State University and one of the study’s authors, “the hormone oxytocin is released as part of the stress response and encourages [women] to tend children and gather with other women.” The study suggests that when engaging in the activities of nurturing and befriending, more oxytocin is released which further counters stress and actually produces a calming effect. The calming response does not occur in men because the high levels of testosterone men produce under stress block the oxytocin.

Because women react differently to stress than men there are implications for women’s health. Studies have yet to be conducted on exactly how oxytocin leads women to “tend and befriend”, but the new findings do help explain why women consistently outlive men. Several previous health studies have found that “social ties reduce women’s risk of disease by lowering blood pressure, heart rate, and cholesterol.” The Nurses’ Health Study done at Harvard Medical School determined that the more friends women had, the less likely they were to develop physical impairments as they aged.

(Source: UCLA, Gale Berkowitz. February 2, 2003).

The Surge in Female Entrepreneurs

In today’s unstable economy, there are many ups and downs. The stock market is down, unemployment is up, and sales are down. Amongst all the dismal fluctuations, one positive area of growth is the number of women-owned businesses. The Center for Women’s Business Research (CWBR) recently reported that there are 10.1 million businesses in the U.S. in which women hold at least 50% interest. That number boils down to 1 in every 11 women is an entrepreneur.

Women-owned businesses currently employ approximately 18.1 million people, generate $2.32 trillion dollars in annual sales, and are 46% of all privately held businesses according to the study. As further evidence of the growing trend in female entrepreneurship, between 1997 and 2002 women-owned businesses increased by 11%, which is more than 1.5 times the national average of privately held startups at 6%. In addition, women-owned business workforces grew by 18% in comparison to the national average or 8%, and sales rose to 32% versus an overall national increase of 24%.
The only negative aspect in the female entrepreneurship trend is the lack of medium-to-large sized companies. Only 4.3% of women-owned businesses report revenues over $1 million and just 0.2% have 100 or more employees.

(Source: BusinessWeek.com, May 15, 2003).

First Woman Appointed Dean of Harvard Law School
Elena Kagan, a former White House aide to President Bill Clinton and onetime clerk to Justice Thurgood Marshall of the Supreme Court, has been appointed dean of the Harvard University Law School. Ms. Kagan, 42, will be the first woman to lead the law school in its 186 year history. Other elite law schools now led by women include those at Stanford, Duke and Georgetown Universities.

(Source: The New York Times, April 4, 2003)

Census Bureau Finds Persistent Wage Gap
As indicated in the 2002 U.S. Census Bureau report, women hold almost half of the country’s executive and managerial jobs, but they are still absent from the top rungs of the salary ladder. Women currently occupy 46 percent of all management positions, which is up from about a third in 1983, but is only marginally higher than in 2001. Nearly 16 percent of men who work full-time earned at least $75,000 a year, compared to just 6 percent of women.

The type of management positions women hold may contribute to the wage gap at the highest income brackets. According to Amy Caiazza at the Institute for Women’s Policy Research, “men still dominate the corporate boardrooms and the jobs that earn a six-figure salary, while the inroads women are making in supervisory posts may be concentrated more in lesser-paying lower- and mid-management positions.”
In the economy boom of the late 1990’s employers courted women with flexible schedules which allowed them more time with their children. However, with today’s struggling economy, employers are not as flexible and that may be contributing to the lack of women’s advancement in the workforce.

The results of the 2002 Census Bureau report also reveal that the median salary for women who work full-time is $29,215 compared with $38,275 for men. Breaking that down, women earn 76 cents for every dollar a man earns which is up from the previous high in 1996 of 74 cents to every dollar.

(Source: The Philadelphia Inquirer. March 25, 2003).