Equity Analysts Downgrade Stock Recommendations When Female CEOs Use Uptalk

Abstract

Despite having similar performance to their male counterparts, women remain underrepresented in corporate leadership roles. In the US for example, only 6.6% of CEOs of Fortune 500 firms are women. One explanation is that female CEOs face more negative evaluations from investors and analysts 1-4, yet we know little about when and why this evaluative discount happens. Here we show that analysts and investors respond negatively when an incoming female CEO uses high levels of high-rising intonation ('uptalk') during her first earnings calls. Newly appointed male CEOs face no change in evaluations when they use 'uptalk'. This pattern that connects gender disparities in evaluative outcomes to 'uptalk' (a female-typed speech pattern), was uncovered by applying a novel voice analysis method to a large dataset comprising the original voice recordings of every earnings call surrounding CEO transitions in the US from 2011 to 2019. Our study demonstrates the general value of voice analysis in understanding why evaluations of social groups can remain decoupled from their realized performance and points to an understudied mechanism that maintains gender disparities in corporate leadership.

Keywords: CEO, Gender, Voice, Market Reactions

JEL Classification: D91, J16, G17, G41