NEW YORK: The firing of American Electric Power Co’s (AEP) chief executive officer (CEO) after less than 14 months highlights a demographic reality of the business world: Women in the top spot have shorter tenures than their male counterparts.
Julie Sloat, who became CEO in January 2023, will be replaced temporarily by AEP board member Ben Fowke while the company searches for a new leader.
Her departure comes just weeks after billionaire investor Carl Icahn secured two seats on the board.
Sloat’s ouster underscores that even as companies work to advance diversity and inclusion initiatives, female CEOs remain relatively rare and they spend less time at the helm than male bosses do.
One potential reason for the discrepancy: Research has shown that activist investors are more likely to target companies run by women.
Female chief executives exit after an average of 6.3 years, compared with 8.8 years for men, according to data compiled by research provider exechange.com.
The figures tracked CEO departures among companies in the Russell 3000 Index over roughly the last seven years.
The data also indicated that female CEOs were slightly more likely to have been forced out than their male counterparts, according to Daniel Schauber, founder of exechange.com.
An AEP spokeswoman declined to comment. Representatives for Icahn didn’t respond to an email seeking comment.
Sloat’s firing leaves just 8% of S&P 500 companies with women in the top spot.
With her departure, the number of females CEOs among those companies falls to 41, down slightly from the record of 42 that was first set last year.
Out of 17 electric utilities in the S&P 500, just three are now led by women, data compiled by Bloomberg showed – Duke Energy Corp, PG&E Corp and Alliant Energy Corp.
Research indicates that activist investors are more likely to push for change at companies run by women and those women are more likely to agree to their demands, said Kristina Rennekamp, an accounting professor at Cornell University’s SC Johnson School of Business.
The research, conducted last year, also suggested experienced activists are aware of this trend.
“There’s all this evidence suggesting women, especially in leadership roles, know that they’re going to face backlash if they’re perceived as less cooperative,” she said.
While analysts said Sloat hadn’t made any major missteps, one knock on her short tenure was a series of regulatory defeats for AEP.
Federal regulators rejected the US$1.5bil sale of its Kentucky operations and in another setback Texas regulators blocked its plan to spend US$2.2bil on green energy assets.
Fowke, AEP’s interim CEO, said on the company’s earnings call on Tuesday that the move to replace Sloat was “a full board decision”.
He said the company had started an external search for candidates and is seeking someone with the ability to achieve regulatory success.
“Ideally you get someone who is a seasoned executive in the utility industry,” Fowke said. — Bloomberg