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Salmon: Annals of Gender Diversity, Pimco Edition

NEW YORK ( Reuters Blogs) -- 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 seven 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 ever had 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; 17% of EVPs and above; 11% of SVPs and above; 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 20 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.

-- Written by Felix Salmon in New York.

Read more of Felix's blogs at Reuters.

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