What's Culture Worth? Stock Performance of Glassdoor's Best Places to Work 2009 to 2019

What’s Culture Worth? Stock Performance of Glassdoor’s Best Places to Work 2009 to 2019

Andrew Chamberlain, Ph.D. Chief Economist, Glassdoor

Zanele Munyikwa MIT Sloan School of Management Contents WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S WHAT'S CULTURE WORTH? CULTURE WHAT'S 03 KEY FINDINGS

04 INTRODUCTION

07 I. Methodology

11 II. Stock Performance of Best Places to Work

22 CONCLUSION

25 APPENDIX

Note: This report is provided for informational purposes only, and should not be construed as providing forward-looking investment advice from Glassdoor. The findings in this report are based on historical stock market performance data, and past stock market performance may not necessarily be indicative of future investment returns. Investors should consult a qualified investment professional before making stock market investments.

2 Key Findings

• Do companies named to Glassdoor’s Best Places to Work repair and maintenance (-1.4 percent); oil, gas, energy and utilities (BPTW) award outperform the stock market? We provide new (3.9 percent); and insurance (4.4 percent). stock performance estimates of all publicly-traded BPTW award • Among companies, Whole Foods (now a subsidiary of Amazon) winners for the complete history of the annual award program saw the highest annual returns earned by any BPTW winner in the WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S that recognizes outstanding workplace culture from 2009 year after an award recognition. It earned an annual return of 191 through 2019. percent in 2009. Other BPTW winners with above-average stock • We find a simple investment strategy of buying an equally returns include Nordstrom (+182 percent in 2009), and Orbitz weighted portfolio of each year’s U.S. large BPTW winners Worldwide (now a subsidiary of Expedia) (+164 percent in 2013). outperforms the S&P 500 index in nine of the 11 years we • Among the 134 publicly-traded BPTW winners we examined, examined. On average, stocks of BPTW winners earned 20.3 the NASDAQ-listed companies collectively saw higher returns percent per year between 2009 and 2019, compared to 12.9 compared to the other major U.S. exchange. The 81 listed on the percent for the S&P 500. New York Stock Exchange (NYSE) earned an average annual stock • Over time, the compounded gap in stock performance between return of 16.9 percent from 2009 to 2019. By contrast, BPTW BPTW winners and the overall stock market is substantial. A winners traded on the NASDAQ exchange averaged 24.9 percent hypothetical investment of $1,000 in each new class of BPTW — nearly twice the average return of the S&P 500 index during winners beginning in 2009 would have grown to $6,529 by that period. 2019, a total investment return of 553 percent. By contrast, • Does rank on the annual BPTW list matter to stock performance? $1,000 invested in the S&P 500 index for the same period We find a positive -- although very weak -- association between would have grown to $3,580, a total return of 258 percent — an company rank on the yearly award and subsequent stock market outperformance by BPTW winners of 295 percentage points performance. On average, rising 10 places in the BPTW ranking is compared to the S&P 500 index. associated with a 1.7 percentage point rise in annual stock returns • Three industry sectors lead in terms of stock performance among in the subsequent year. BPTW companies: Retail (40.5 percent average annual return • Consistent with the growing academic literature that finds a link in the year after award recognition); professional and business between employee culture and business performance, we find services (28.3 percent); and information technology (24.7 that stocks of publicly-traded winners of Glassdoor’s Best Places percent). The lowest stock returns among award winners were to Work award historically outperformed the U.S. stock market in found in more traditional sectors of the economy: Construction, most years.

3 WHY DO CANDIDATESWHAT’S REJECT CULTURE JOB WORTH?OFFERS? million workplacesglobally. offering richcultural informationonmorethan1 more than55millioncompany reviews andinsights, search engineseachyear, thecompany hascompiled arrived ontoGlassdoor’splatformfrompopular of surveying millionsofonlinejobseekers asthey company cultureintheworld.Throughprocess one ofthemostextensive anddetaileddatabaseson employers anonymously, Glassdoorrapidly amassed online platformsallowingemployees toreview research oncompany culture.Asoneofthefirst review survey marked aturningpointforacademic In June2008,thelaunchofGlassdoor’semployer Introduction 4 WHY DO CANDIDATESWHAT’S REJECT CULTURE JOB WORTH?OFFERS? representing adiverse cross-sectionoftheeconomy have been grown intoacelebrated institution.Morethan250U.S. employers Since then,Glassdoor’sannualBestPlacestoWork award has applications. platform rather thantraditional employer-led HRsurveys and to measuringworkplaceculture,usingbigdatafromanonlinetech on onlinefeedbackfromemployees. Itwasaradical newapproach create thefirst-ever ranking ofbestworkplaceculturesbasedsolely company’s growingdatabaseofanonymous employee reviews to Places toWork.” Theaward wasuniqueatthetime,using announced itsinaugural Employees’ ChoiceAwardforthe“ Less thanayear afterthe2008launchofGlassdoor, thecompany Best Best outperform theirpeersfinancially? That is,docompanieswithhighemployee satisfactiononGlassdoor having satisfiedemployees, they arehigh-performingcompanies. listed asGlassdoor’sBestPlacestoWork iswhether, inadditionto One ofthemostcommonlyasked questionsaboutthecompanies than 1,000employees) andlargeenterprises. nine countriesgloballyandincludesbothsmallcompanies(fewer the award consistsof10separate listsof topemployers spanning government, energy, professionalservices,mediaandmore.Today, including companiesinretail,technology, manufacturing,finance, recognized asBestPlacestoWork over thecourseof12years 1 , 5 WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S

That question has sparked a vast literature of studies in recent tracking their stock performance compared to the S&P 500 index — years examining the link between Glassdoor reviews and real-world a popular benchmark for stock performance among researchers — company performance. One of the first to do so was Glassdoor’s during the same period. We show which companies and industries own 2015 study examining the historical stock performance of have led Best Places to Work in stock performance each year, and Best Places to Work winners.2 Since then, multiple academic explore the link between company rank in the annual award and studies have identified several mechanisms through which online subsequent stock performance. employee sentiment on Glassdoor is a strong predictor of real- world economic performance, ranging from future stock returns The rest of this study is organized as follows: In Section 2, we and company profitability to the likelihood of ethical violations in explain our methodology and show some basic facts about the financial reporting among companies with weak employee culture.3 companies in our sample. In Section 3, we present our main results, comparing the performance of Best Places to Work winners to the In this study, we update our original 2015 analysis of the real-world overall stock market between 2009 and 2019. Finally, in Section 4, stock market performance of companies named to Glassdoor’s Best we conclude and offer our thoughts on some possible mechanisms Places to Work list. We examine the full history of publicly-traded that explain the connection between financial performance and companies named to the annual award from 2009 through 2019, satisfied employee reviews on Glassdoor.

6 I. Methodology

Our goal in this study is to show how stocks of publicly-traded companies named to Glassdoor’s U.S. Best Places to Work list have WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S fared historically during the year the company wins the award. To do so, we compiled a list of every publicly-traded company to win the award in each year from 2009 to 2019.4 To be included, companies must have been (1) publicly traded for the entire calendar year in which they were named as a Best Place to Work, and (2) listed under a dedicated stock ticker on a U.S. exchange.5

Before 2018, the Best Places to Work award named 50 employers per year; beginning in 2018, the award started featuring 100 large employers. Of the 650 total Best Places to Work winners from 2009 to 2019 , 253 unique companies were represented. Among them, we identified 134 companies that were publicly traded during the full year in which they were named to the list. This study focuses on the stock market performance of those 134 firms. 6

Each year’s annual Best Places to Work list is typically announced in December. To simulate how an investor might use that information, we track stock returns from the last trading day of the award announcement year through the final trading day of the award year. For example, the 2019 Best Places to Work list was announced in December 2018; stock returns for publicly-traded companies among that year’s winners are calculated based on stock price changes between December 31, 2018 and December 31, 2019. 7

7 For investment returns, we simulated a hypothetical investor roughly 500 large publicly-traded U.S. employers. Because it is a price buying an equally weighted portfolio of each year’s Best Places to index rather than a “total return” index — that is, it ignores the impact Work companies — that is, they invest an equal dollar amount in of dividends, just as in this study — it provides a reasonable benchmark each stock — each December following the awards announcement for assessing the stock performance of publicly-traded Best Places in and holding it for one year.8 Stock returns are based solely on price comparison to Best Places to Work winners. 10 appreciation during the year, which is simply the percentage change

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S in closing price from December to December. For simplicity, we What Companies Are Included? ignore the impact of dividends and taxes, and use publicly available Figure 1 shows the number of publicly-traded companies in our sample stock price information. 9 each year, along with the total number of firms named as Best Places to Work. On average about 56 percent of U.S. large Best Places to Work As a performance benchmark, we compared the stock returns of winners are publicly traded, with the remaining 44 percent either each year’s Best Places to Work winners to the S&P 500 index, privately held or subsidiaries without a dedicated stock ticker. Of the which serves as a widely recognized proxy for overall stock market 650 winners between 2009 and 2019, we identified 134 unique publicly- performance. The S&P 500 index tracks the price appreciation of traded companies. 11

Figure 1: How Many Best Places to Work are Publicly Traded? About 56 percent of companies named BPTW each year are publicly traded.

120

100

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

T US L T W W C

Source: Glassdoor Economic Research (glassdoor.com/research)

8 What Industries Are Most Common? Over the years, companies from a wide variety of industries have been named to the Best Places to Work list. However, some sectors are much more heavily represented than others. Figure 2 shows the distribution of winners by

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S industry from 2009 to 2019. Figure 2: Most Common Sectors for Best Places to Work Winners Of the 134 unique public companies we examined, 44 (or Tech, manufacturing and ﬁnance employers top the list of publicly traded BPTW 33 percent) were in the tech industry. The next largest Information Technology group is 22 employers (or 16 percent) in manufacturing, Manufacturing

12 employers (or 9 percent) in finance, 9 employers (or 7 Finance percent) in biotech, 7 employers each (or 5 percent) in retail Biotech & Pharmaceuticals Travel & Tourism and travel, and 6 employers (or 4 percent) in the professional Retail

and business services sector. Business Services

Oil, Gas, Energy & Utilities As is clear from Figure 2, three sectors have dominated Real Estate Media the U.S. large Best Places to Work list over the years: Tech, Aerospace & Defense

manufacturing, and financial services. All three of these Restaurants, Bars & Food Services sectors have been dramatically impacted by the “digital Transportation & Logistics Insurance transformation” — the rise of data and software as core Construction, Repair & Maintenance

aspects of companies — and that has greatly impacted Telecommunications their need to attract in-demand tech talent. We believe 0 10 20 30 40 50

that competitive pressure for talent is an important reason Number of Publicly Traded Winners (2009-2019)

why these sectors have risen to the top of Glassdoor’s Best Source: Glassdoor Economic Research (glassdoor.com/research) Places to Work over the years: They have to a large extent invested in premium pay, excellent benefits, and fostering healthy company cultures as a survival strategy in light of the intense competition for tech workers.

9 Box 1. Academic Research on Glassdoor Reviews and “Employees’ online reviews and equity prices,” by Efthymia Company Performance Symitsi, Panagiotis Stamolampros, and George Daskalakis, Building knowledge about the importance of workplace Economics Letters, January 2018. culture is an important part of Glassdoor’s mission. Since 2008, Quantified the effect of better employee satisfaction on Glassdoor Glassdoor has shared its database of millions of employee on real-world corporate performance, finding that Glassdoor WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S reviews with more than 70 academic research teams around reviews are a strong predictor of better company performance — the world, encouraging rigorous and independent research on and that stock markets tend to undervalue good company culture. how employee culture drives great companies. Here are just a few examples of research showing a link between company performance and Glassdoor reviews in recent years: “What Do Employees Know? Evidence from a Social Media Platform,” by Kelly Huang, Meng Li, and Stanimir Markov, The Accounting Review, June 2019. “Crowdsourced employer reviews and stock returns,” by T. Found that employee opinions on “6-month business outlook” Clifton Green, Ruoyan Huang, Quan Wen, and Dexin Zhou, shared in Glassdoor reviews help predict future performance of Journal of Financial Economics, October 2019. companies. The authors show that Glassdoor reviews contain Examined trends in Glassdoor reviews, and found that powerful information about both good and bad company events — companies who experience improvements in Glassdoor ratings information often overlooked by stock market analysts. significantly outperform those with declines in the following quarter. “Duality in Diversity: How Intrapersonal and Interpersonal Cultural Heterogeneity Relate to Firm Performance” by “Family firms, employee satisfaction, and corporate Matthew Corritore, Amir Goldberg, and Sameer B. Srivastava, performance,” by Minjie Huang, Pingshu Li, Felix Meschke, and Administrative Science Quarterly, April 2019. James P. Guthrie, Journal of Corporate Finance, October 2015. Used the text of Glassdoor reviews to measure cultural similarity Used Glassdoor reviews to establish a causal link between inside a large sample of companies, showing that more or less better employee satisfaction on Glassdoor and the financial similar cultural themes mentioned in employee reviews predict performance of a large sample of publicly-traded family firms. company innovation and operational performance.

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II. Stock Performance of Best Places to Work

In this section, we show how stocks of publicly-traded Best Places to Work winners have fared over the years compared to the S&P 500 index. As an investor, the simplest way to think about stock performance of Best Places to Work winners is on a year-by-year basis. If an investor purchased an equally weighted portfolio of each new year’s Best Places to Work winners, and held them for one year, how would that investment perform historically compared to a simple strategy of buying a diversified portfolio of stocks that mirrors the S&P 500 index?

11 Figure 3 shows the annual stock returns for each year’s class of Best outperformed the Best Places to Work portfolio. Places to Work winners compared to the annual return on the S&P 500 index during the 11-year period from 2009 to 2019. In each As shown in the figure, the Best Places to Work outperformed the S&P year, the annual return from holding Best Places to Work stocks is 500 index in nine of the 11 years examined, or roughly 82 percent of the shown in green, while the overall S&P 500 return is shown in black. time. During this period, the S&P 500 index averaged an annual return of WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S A green bar above the black represents a year in which Best Places about 12.9 percent. By contrast, Best Places to Work winners averaged a to Work outperformed the overall stock market. By contrast, a 20.3 percent annual return, an average outperformance of 7.4 percentage green bar below the black represents years when the stock market points annually compared to the S&P 500.

Figure 3: Annual Stock Performance of Best Places to Work vs. S&P 500 Index A simple portfolio of BPTW companies outperforms the S&P 500 in 9 out of the past 11 years

20 10 Annual Stock Return (Price Appreciation) (Price Return Stock Annual 0 -10

-20

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

W S

Source: Glassdoor Economic Research (Glassdoor.com/research). Source: Glassdoor Economic Research (glassdoor.com/research)

12 Why Underperformance in 2011 and 2016? The Best Places to Work stocks underperformed the overall stock market in two of the 11 years we examined: 2011 and 2016. What’s behind those anomalies?

In 2011, the U.S. economy was in the midst of a slow recovery WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S from the depths of the Great Recession. In that year, several companies named Best Places to Work suffered very poor stock returns as the hangover from the recent recession lingered. For example, Overstock lost -52 percent of its value in 2011; similarly, Goldman Sachs stock was down -46 percent, along with Morgan Stanley (-44 percent), Ford Motor Company (-36 percent), Southwest Airlines (-34 percent), and Deutsche Bank (-27 percent). In total, 15 of the 30 publicly-traded Best Places to Work companies’ stocks declined that year as the recession continued to take a toll on the U.S. financial, automotive and transportation sectors.

In 2016, a very different phenomenon explains the underperformance of Best Places to Work winners’ stocks, namely the unusually negative stock of performance among three companies on the list: Vivint Solar, Twitter, and NIKE. In 2016, Vivint Solar lost 73 percent of its stock value due to highly unfavorable market conditions facing the solar power sector. Twitter’s stock lost 30 percent of its value following negative analyst reports about the company’s advertising revenue prospects. And NIKE’s stock lost 19 percent following disappointing profit reports. These three outliers together explain about 80 percent of the underperformance of the Best Places to Work winners’ average return in 2016.

13 The Value of $1,000 Investment Over the Years and holds both investments for one year, repeating the process each Another way to illustrate the investment returns of a Best Places to December. Work portfolio is to look at such an investment’s cumulative growth over many years, compared with a similar investment in a portfolio The cumulative value of a $1,000 investment in Best Places to Work that mirrors the S&P 500 index during the same period. winners is shown in the blue-green line, while the value of $1,000 invested in the S&P 500 index is shown in the blue line. After 11 WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Figure 4 shows the value of a hypothetical $1,000 investment made years, the initial $1,000 investment in Best Places to Work winners in Best Places to Work winners at the end of 2008, along with a would have grown to $6,529 by the end of 2019, a total investment comparable investment in the S&P 500 index. Each investment return of 553 percent. By contrast, the $1,000 invested in the S&P strategy begins with an initial investment of $1,000. On the last 500 would have grown to $3,580, a total return of 258 percent. That trading day of December each year, the hypothetical investor splits amounts to a cumulative 295 percentage point investment return a $1,000 investment equally among each years’ Best Places to Work outperformance by a Best Places to Work portfolio compared to the

winners and also makes a $1,000 investment in the S&P 500 index, S&P 500 index between 2009 and 2019.

Figure 4: Value of $1,000 Invested in Best Places to Work vs. S&P 500 Index An invesment of $1,000 starting in 2008 in each year’s BPTW winners would’ve grown to $6,529 by the end of 2019

$7K

$6K

$5K

$4K $3K

$2K $1K $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

W S

Source: Glassdoor Economic Research (glassdoor.com/research) 14 Industries with Top Stock Returns Companies from a variety of industries have appeared on the Best Places to Work list over the years. One frequent question often asked

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S by investors: Among Best Places to Work winners, which sectors have historically exhibited the strongest stock market performance?

Figure 5 shows the average annual stock performance of Best Places to Work winners by industry. In total, 16 industries are represented among publicly-traded winners from 2009 to 2019. Among them, three industries exhibited the highest returns (denoted with green bars): Retail, business services, and information technology.

The highest annual stock performance among Best Places to Work winners is in the retail sector, with an average annual return of 40.5 percent. That sector consists of seven firms, including several high-performing retail giants such as Whole Foods, Nordstrom, and Lululemon.

Previous research has shown a strong connection between employee satisfaction on Glassdoor and customer satisfaction in customer- oriented sectors like retail. As customer satisfaction helps fuel customer loyalty and repeat sales, that connection between customer satisfaction and satisfied employees may offer a partial explanation for why the retail sector has exhibited such strong stock returns among Best Places to Work over the years.

15 The sector with the second-highest stock returns between 2009 and 2019 was professional and Figure 5: Sectors with the Highest Annual Stock Returns business services (28.3 percent, six employers). That Among BPTW Winners sector includes many leading professional services Retail, business services and tech sectors lead among publicly and consulting firms such as Accenture, Gartner, traded BPTW winners 2009-2019 and Insperity. They are followed by the fast-growing Retail information technology sector (24.7 percent, 45 firms), Business Services WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S which includes many of today’s tech giants, including Information Technology

Google, Apple, Netflix, Facebook and others. Transportation & Logistics

Travel & Tourism By comparison, the weakest stock returns among Finance Aerospace & Defence Best Places to Work winners have historically been Restaurants, Bars & Food Services found in the following sectors: Construction, repair & Biotech & Pharmaceuticals

maintenance (-1.4 percent, two firms); Oil, gas, energy Media & utilities (3.9 percent, five firms); and insurance (4.4 Manufacturing percent, two firms). Despite firms from these sectors Telecommunications Real Estate having sufficiently strong employee cultures to be named Insurance Best Places to Work winners, the broader economic Oil, Gas, Energy & Utilities

headwinds facing these sectors in recent years has Construction, Repair & Maintenance nevertheless contributed to underwhelming stock -5 0 5 10 15 20 25 30 35 40 45

performance by these companies. Annual Stock Return (Price Appreciation)

Source: Glassdoor Economic Research (glassdoor.com/research)

16 Top Performing Companies The annual stock performance of Best Places to Work winners in this study is ultimately an average of individual stock returns. As a result, the performance of a few individual WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S companies can have an outsized impact on overall portfolio performance from year to year. Which companies have led each year in terms of highest stock returns among Best Places to Work winners?

Figure 6 shows the three best-performing stocks in each year examined, illustrating which specific winning companies have driven superior stock returns. Across all years, the highest annual stock performance by any company in the year following being named to Best Places to Work was Whole Foods, whose stock rose 191 percent in 2009 after being named to the inaugural Best Places to Work award in December 2008.12 They are followed by Nordstrom (+182 percent, 2009) and Orbitz Worldwide13 (+164 percent, 2013). Many of the companies with the highest-performing stocks span a wide variety of sectors, including Caterpillar (64 percent, 2010), Chevron (31 percent, 2016), Boston Scientific (43 percent, 2018), and Southwest Airlines (125 percent, 2014). In 2019, the most recent year we examined, the highest stock returns were earned by two technology firms and one retailer: Paycom (+116 percent), Paylocity (+101 percent), and Lululemon (+91 percent).

17 Figure 6: 3 Best Places to Work Winners with Highest Stock Returns Each Year Highest annual price appreciation among each year’s class of BPTW winners 2009-2019 WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S

200 180 160

140 120 100 80

A S R 60 40 20

0 Intel Intuit Apple Apple Zillow Adobe Google Paycom NVIDIA NVIDIA Genesys Chevron Chevron Insperity Paylocity Paylocity Facebook Facebook lululemon lululemon Salesforce Rackspace Caterpillar Reachlocal Nordstrom Biogen Idec F5 Networks Whole Foods Whole Foods Boston Scientiﬁc Orbitz Worldwide Southwest Airlines Bristol-Myers Squibb

Source: Glassdoor Economic Research (glassdoor.com/research)

18 Returns by Overall US Exchange Since 2009, a total of 134 unique publicly-traded companies have Facebook, Apple, Google, and Microsoft. Those companies have been named to the Best Places to Work list. Of them, 81 have been enjoyed spectacular stock performances in recent years that are

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S listed on the New York Stock Exchange (NYSE), while 53 have been largely unrelated to which exchange they’re listed on; this has listed on the tech-heavy NASDAQ exchange. An obvious question helped drive returns among NASDAQ-listed winners. By contrast, ensues: Are there any differences in the annual stock performance many employers in more traditional sectors, such as Wells Fargo, of Best Places to Work companies based on which of the two major Toyota and Hilton, are listed on the NYSE; those stocks on average U.S. stock exchanges they are listed? delivered more modest stock returns during our sample period.

Figure 7 shows the average annual stock performance of Best Places to Work companies by the exchange their shares are traded Figure 7: BPTW Winner Stock Returns by U.S. Exchange on. Between 2009 and 2019, award winners traded on the NYSE Average annual stock returns by exchange 2009-2019 earned an average annual stock return of 16.9 percent — well above 30 the S&P 500 average return of 12.9 percent during that period. 25

However, Best Places to Work winners traded on the NASDAQ exchange averaged a remarkable 24.9 percent annual return — 20

nearly twice the average return of the S&P 500 during that period. 15

What’s behind the historically strong stock performance of 10

NASDAQ-listed companies? There is substantial self-selection A A S R 5 between NYSE and NASDAQ, the two largest stock exchanges in

the world. Many high-performing tech companies in our analysis 0 ASA L C SE L C are listed on the tech-heavy NASDAQ exchange, including Netflix,

Source: Glassdoor Economic Research (glassdoor.com/research)

19 Does A Company’s Ranking Among the Award Winners Matter? A final question we examined is whether there’s any link between the rank of companies on the annual Best Places to Work list — that is, whether they were toward the top or bottom of the annual list — and their subsequent stock market performance. There’s growing

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S academic literature showing that higher-rated companies according to Glassdoor reviews exhibit higher financial performance (see Box 1 above). Do we also see this pattern amongst companies based on their relative rankings on the Best Places to Work list?

Figure 8 shows a scatterplot of company rank in the Best Places to Work award and annual stock returns. Each dot represents one company in the year in which they were named to the award. The horizontal axis shows the rank of that company (either from 1 to 50, or from 1 to 100 depending on the award year) while the vertical axis shows their annual stock performance for the year. In the figure, a company rank of 1 is “best” in terms of award ranking.

As shown in the figure, there is a positive -- although very weak -- association between company rank and subsequent stock market performance. On average, companies that ranked closer to the top of the list do on average have higher stock returns than those near the bottom. For example, the average annual stock return of companies listed in the top 20 ranks of Best Places to Work winners was 24.1 percent between 2009 and 2019. By contrast, the average annual return for winners ranked toward the bottom of the list, from 80th to 100th, was 8.4 percent during the same period. On average, rising 10 places in the Best Place to Work ranking is associated with a 1.7 percent higher annual stock return.

20 WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S

Figure 8: BPTW Winner Rank and Annual Stock Returns In addition, Figure 8 illustrates that the highest stock returns Average annual stock returns and award rank 2009-2019 we identified in any year are mostly clustered among companies achieving a ranking in the top 30 of the award. Examples include Whole Foods (191 percent, ranked #6 in 2009), Nordstrom (182 percent, ranked #27 in 2009), Orbitz Worldwide (164 percent, ranked #26 in 2013), Apple (147 percent, ranked #19 in 2009), and NetApp (146 percent, ranked #10 in 2009).

While there is some evidence of a positive correlation between

Annual Stock Return Return Stock Annual stock performance and being more highly ranked as a Best Place to Work, the evidence in Figure 8 is nevertheless very weak. On the other hand, Figure 8 is broadly consistent with past academic research using Glassdoor reviews repeatedly showing a clear link L R H R between better employee sentiment and improved stock market performance in the future (see Box 1 for a few examples). Company Rank in BPTW Award (1=Best)

Source: Glassdoor Economic Research (glassdoor.com/research)

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Conclusion

In this study, we provide new estimates of the historical stock performance of large U.S. Best Places to Work winners from 2009 to 2019. In our original 2015 study, we found that publicly-traded Best Places to Work companies significantly outperformed the overall stock market between 2009 and 2014. In this study, we confirm a similar pattern from 2015 through 2019, with Best Places to Work winners outperforming the S&P 500 index in 9 of the 11 years we examined.

22 Our finding that U.S. employers with the best employee satisfaction These shared characteristics of employers we have examined also exhibit strong business performance is consistent with today’s partially explain why Best Places to Work winners consistently growing academic literature. There is a clear link between strong outperform the overall stock market. employee culture and real-world financial performance. What are the likely mechanisms that explain this link? Second, the risk profile of Best Places to Work winners is significantly different from the overall stock market. Economists WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S The first key driver of our results is that the companies named to the teach that there is a tradeoff between risk and return in the stock annual Best Places to Work awards are far from a random sample of market. Although Best Places to Work winners significantly employers. The Best Places to Work winners have often come from outperform the S&P 500 over time, their returns are also much sectors of the economy that are fast-growing, where competition more volatile from year to year. Thus, part of the reason why Best for skilled labor is fierce, and that also have above-average stock Places to Work winners outperform the overall stock market is that returns — such as tech and professional services. In response, investors demand compensation for being willing to take on that employers in these sectors have invested heavily in enhancing their additional risk. employee culture as a talent-attraction strategy in recent years.

23 WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S

Finally, a growing body of research shows that employee reviews Our findings reinforce the growing academic consensus about the gathered by Glassdoor often contain deep insights into companies’ relationship between workplace culture and real-world business operational performance and employee morale — issues that may outcomes, particularly for knowledge-based sectors in which human only translate into actual business performance in subsequent resources are one of companies’ most critical assets. Our findings 14 months and years. Information revealed on Glassdoor about further suggest that crowdsourced employee reviews can be a employee sentiment in one year often portends business problems powerful tool for executives in measuring, monitoring, and improving or successes in the coming one. That fact alone creates a mechanical workplace culture as a driver of innovation and financial performance. link between companies that are named as Best Places to Work winners each year and their subsequent stock market performance.

24 WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S

Appendix

Complete list of all unique publicly-traded Best Places to Work winners examined in this study.

25 Table A1

Company Name Exchange Ticker Award Year Industry

Accenture NYSE ACN 2009 Business Services Adobe NASDAQ ADBE 2009 Information Technology American Express NYSE AXP 2009 Finance Apple NASDAQ AAPL 2009 Information Technology WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Best Buy NYSE BBY 2009 Retail Capital One NYSE COF 2009 Finance Caterpillar NYSE CAT 2009 Manufacturing Chevron NYSE CVX 2009 Oil, Gas, Energy & Utilities Cisco Systems NASDAQ CSCO 2009 Information Technology Citrix Systems NASDAQ CTXS 2009 Information Technology Continental Airlines NYSE CAL 2009 Travel & Tourism EMC NYSE EMC 2009 Information Technology FactSet NYSE FDS 2009 Finance FedEx NYSE FDX 2009 Transportation & Logistics General Mills NYSE GIS 2009 Manufacturing Goldman Sachs NYSE GS 2009 Finance Google NASDAQ GOOGL 2009 Information Technology Intuit NASDAQ INTU 2009 Information Technology Juniper Networks NYSE JNPR 2009 Information Technology Lockheed Martin NYSE LMT 2009 Aerospace & Defense Marriott International NASDAQ MAR 2009 Travel & Tourism MetLife NYSE MET 2009 Insurance National Instruments NASDAQ NATI 2009 Manufacturing NetApp NASDAQ NTAP 2009 Information Technology Netflix NASDAQ NFLX 2009 Information Technology NIKE NYSE NKE 2009 Manufacturing Nordstrom NYSE JWN 2009 Retail Paychex NASDAQ PAYX 2009 Information Technology Procter & Gamble NYSE PG 2009 Manufacturing QUALCOMM NASDAQ QCOM 2009 Information Technology Salesforce NYSE CRM 2009 Information Technology SAP NYSE SAP 2009 Information Technology

26 Company Name Exchange Ticker Award Year Industry

Schlumberger NYSE SLB 2009 Oil, Gas, Energy & Utilities Texas Instruments NASDAQ TXN 2009 Manufacturing Wells Fargo NYSE WFC 2009 Finance Whole Foods NASDAQ WFM 2009 Retail Adobe NASDAQ ADBE 2010 Information Technology Apple NASDAQ AAPL 2010 Information Technology

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Best Buy NYSE BBY 2010 Retail Caterpillar NYSE CAT 2010 Manufacturing Chevron NYSE CVX 2010 Oil, Gas, Energy & Utilities Cintas NASDAQ CTAS 2010 Business Services Continental Airlines NYSE CAL 2010 Travel & Tourism EMC NYSE EMC 2010 Information Technology FactSet NYSE FDS 2010 Finance FedEx NYSE FDX 2010 Transportation & Logistics General Mills NYSE GIS 2010 Manufacturing GlaxoSmithKline NYSE GSK 2010 Biotech & Pharmaceuticals Goldman Sachs NYSE GS 2010 Finance Google NASDAQ GOOGL 2010 Information Technology Harris NYSE HRS 2010 Aerospace & Defense Intel NASDAQ INTC 2010 Information Technology Intuit NASDAQ INTU 2010 Information Technology Juniper Networks NYSE JNPR 2010 Information Technology National Instruments NASDAQ NATI 2010 Manufacturing NetApp NASDAQ NTAP 2010 Information Technology Paychex NASDAQ PAYX 2010 Information Technology Procter & Gamble NYSE PG 2010 Manufacturing Prudential NYSE PRU 2010 Finance QUALCOMM NASDAQ QCOM 2010 Information Technology Rackspace NYSE RAX 2010 Information Technology

SAP NYSE SAP 2010 Information Technology Schlumberger NYSE SLB 2010 Oil, Gas, Energy & Utilities Sherwin-Williams NYSE SHW 2010 Manufacturing Southwest Airlines NYSE LUV 2010 Travel & Tourism Travelers Companies NYSE TRV 2010 Insurance

27 Company Name Exchange Ticker Award Year Industry

Turner Broadcasting NYSE TWX 2010 Media Whole Foods NASDAQ WFM 2010 Retail Adobe NASDAQ ADBE 2011 Information Technology American Express NYSE AXP 2011 Finance Analog Devices NASDAQ ADI 2011 Manufacturing Apple NASDAQ AAPL 2011 Information Technology

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S BB&T NYSE BBT 2011 Finance Bristol-Myers Squibb NYSE BMY 2011 Biotech & Pharmaceuticals Capital One NYSE COF 2011 Finance Chevron NYSE CVX 2011 Oil, Gas, Energy & Utilities Cummins NYSE CMI 2011 Manufacturing Deutsche Bank NYSE DB 2011 Finance Fluor NYSE FLR 2011 Construction, Repair & Maintenance Ford Motor Company NYSE F 2011 Manufacturing General Mills NYSE GIS 2011 Manufacturing Goldman Sachs NYSE GS 2011 Finance Google NASDAQ GOOGL 2011 Information Technology Intel NASDAQ INTC 2011 Information Technology Monsanto Company NYSE MON 2011 Biotech & Pharmaceuticals Morgan Stanley NYSE MS 2011 Finance National Instruments NASDAQ NATI 2011 Manufacturing NetApp NASDAQ NTAP 2011 Information Technology NIKE NYSE NKE 2011 Manufacturing Overstock NASDAQ OSTK 2011 Retail Procter & Gamble NYSE PG 2011 Manufacturing QUALCOMM NASDAQ QCOM 2011 Information Technology Salesforce NYSE CRM 2011 Information Technology Shutterfly NASDAQ SFLY 2011 Information Technology Southwest Airlines NYSE LUV 2011 Travel & Tourism

Synopsys NASDAQ SNPS 2011 Information Technology Travelers Companies NYSE TRV 2011 Insurance Turner Broadcasting NYSE TWX 2011 Media

28 Company Name Exchange Ticker Award Year Industry

Accenture NYSE ACN 2012 Business Services Apple NASDAQ AAPL 2012 Information Technology Chevron NYSE CVX 2012 Oil, Gas, Energy & Utilities Citrix Systems NASDAQ CTXS 2012 Information Technology Coach NYSE COH 2012 Retail Costco Wholesale NASDAQ COST 2012 Retail

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Disney Parks & Resorts NYSE DIS 2012 Media Dow Chemical NYSE DOW 2012 Manufacturing Eli Lilly NYSE LLY 2012 Biotech & Pharmaceuticals FedEx NYSE FDX 2012 Transportation & Logistics Fluor NYSE FLR 2012 Construction, Repair & Maintenance General Mills NYSE GIS 2012 Manufacturing Goldman Sachs NYSE GS 2012 Finance Google NASDAQ GOOGL 2012 Information Technology Groupon NASDAQ GRPN 2012 Information Technology Intel NASDAQ INTC 2012 Information Technology Intuit NASDAQ INTU 2012 Information Technology Johnson & Johnson NYSE JNJ 2012 Biotech & Pharmaceuticals Monsanto Company NYSE MON 2012 Biotech & Pharmaceuticals Morningstar NASDAQ MORN 2012 Finance National Instruments NASDAQ NATI 2012 Manufacturing NetApp NASDAQ NTAP 2012 Information Technology NIKE NYSE NKE 2012 Manufacturing Nordstrom NYSE JWN 2012 Retail NVIDIA NASDAQ NVDA 2012 Information Technology Procter & Gamble NYSE PG 2012 Manufacturing QUALCOMM NASDAQ QCOM 2012 Information Technology Rackspace NYSE RAX 2012 Information Technology Reachlocal NASDAQ RLOC 2012 Business Services

Salesforce NYSE CRM 2012 Information Technology SAP NYSE SAP 2012 Information Technology Southwest Airlines NYSE LUV 2012 Travel & Tourism

29 Company Name Exchange Ticker Award Year Industry

Starbucks NASDAQ SBUX 2012 Restaurants, Bars & Food Services Viacom Media Networks NASDAQ VIA 2012 Media Agilent Technologies NYSE A 2013 Biotech & Pharmaceuticals Akamai NASDAQ AKAM 2013 Information Technology Apple NASDAQ AAPL 2013 Information Technology Biogen Idec NASDAQ BIIB 2013 Biotech & Pharmaceuticals

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Boeing Commercial Airplanes NYSE BA 2013 Aerospace & Defense Chevron NYSE CVX 2013 Oil, Gas, Energy & Utilities Citrix Systems NASDAQ CTXS 2013 Information Technology Costco Wholesale NASDAQ COST 2013 Retail Cummins NYSE CMI 2013 Manufacturing Dow Chemical NYSE DOW 2013 Manufacturing Eaton NYSE ETN 2013 Manufacturing Facebook NASDAQ FB 2013 Information Technology Fluor NYSE FLR 2013 Construction, Repair & Maintenance Gartner NYSE IT 2013 Business Services General Mills NYSE GIS 2013 Manufacturing Google NASDAQ GOOGL 2013 Information Technology Hyatt NYSE H 2013 Travel & Tourism Intel NASDAQ INTC 2013 Information Technology Jet Blue NASDAQ JBLU 2013 Transportation & Logistics LinkedIn NYSE LNKD 2013 Information Technology Mastercard NYSE MA 2013 Finance National Instruments NASDAQ NATI 2013 Manufacturing Orbitz Worldwide NYSE OWW 2013 Information Technology QUALCOMM NASDAQ QCOM 2013 Information Technology Rackspace NYSE RAX 2013 Information Technology Red Hat NYSE RHT 2013 Information Technology Riverbed Technology NASDAQ RVBD 2013 Information Technology

Salesforce NYSE CRM 2013 Information Technology SAP NYSE SAP 2013 Information Technology Southwest Airlines NYSE LUV 2013 Travel & Tourism

30 Company Name Exchange Ticker Award Year Industry

Starbucks NASDAQ SBUX 2013 Restaurants, Bars & Food Services Turner Broadcasting NYSE TWX 2013 Media Workday NYSE WDAY 2013 Information Technology Apple NASDAQ AAPL 2014 Information Technology Cameron International NYSE CAM 2014 Oil, Gas, Energy & Utilities Chevron NYSE CVX 2014 Oil, Gas, Energy & Utilities

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Citrix Systems NASDAQ CTXS 2014 Information Technology Costco Wholesale NASDAQ COST 2014 Retail Disney Parks & Resorts NYSE DIS 2014 Media Eastman Chemical NYSE EMN 2014 Manufacturing eBay Inc NASDAQ EBAY 2014 Information Technology Facebook NASDAQ FB 2014 Information Technology FedEx NYSE FDX 2014 Transportation & Logistics Gartner NYSE IT 2014 Business Services Google NASDAQ GOOGL 2014 Information Technology Guidewire NYSE GWRE 2014 Information Technology Hyatt NYSE H 2014 Travel & Tourism Intel NASDAQ INTC 2014 Information Technology Interactive Intelligence NASDAQ ININ 2014 Information Technology Intuit NASDAQ INTU 2014 Information Technology LinkedIn NYSE LNKD 2014 Information Technology National Instruments NASDAQ NATI 2014 Manufacturing NetApp NASDAQ NTAP 2014 Information Technology NIKE NYSE NKE 2014 Manufacturing Orbitz Worldwide NYSE OWW 2014 Information Technology Procter & Gamble NYSE PG 2014 Manufacturing QUALCOMM NASDAQ QCOM 2014 Information Technology Rackspace NYSE RAX 2014 Information Technology Red Hat NYSE RHT 2014 Information Technology

Riverbed Technology NASDAQ RVBD 2014 Information Technology Salesforce NYSE CRM 2014 Information Technology Starbucks NASDAQ SBUX 2014 Restaurants, Bars & Food Services Stryker NYSE SYK 2014 Manufacturing

31 Company Name Exchange Ticker Award Year Industry

Texas Instruments NASDAQ TXN 2014 Manufacturing Texas Roadhouse NASDAQ TXRH 2014 Restaurants, Bars & Food Services Twitter NYSE TWTR 2014 Information Technology Adobe NASDAQ ADBE 2015 Information Technology Apple NASDAQ AAPL 2015 Information Technology Bristol-Myers Squibb NYSE BMY 2015 Biotech & Pharmaceuticals

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Chevron NYSE CVX 2015 Oil, Gas, Energy & Utilities Costco Wholesale NASDAQ COST 2015 Retail Disney Parks & Resorts NYSE DIS 2015 Media Eastman Chemical NYSE EMN 2015 Manufacturing F5 Networks NASDAQ FFIV 2015 Information Technology Facebook NASDAQ FB 2015 Information Technology Ford Motor Company NYSE F 2015 Manufacturing Gartner NYSE IT 2015 Business Services GE Aviation NYSE GE 2015 Aerospace & Defense Genesys NYSE GENESYS 2015 Information Technology Google NASDAQ GOOGL 2015 Information Technology Interactive Intelligence NASDAQ ININ 2015 Information Technology LinkedIn NYSE LNKD 2015 Information Technology Monsanto Company NYSE MON 2015 Biotech & Pharmaceuticals NIKE NYSE NKE 2015 Manufacturing NVIDIA NASDAQ NVDA 2015 Information Technology Procter & Gamble NYSE PG 2015 Manufacturing QUALCOMM NASDAQ QCOM 2015 Information Technology Rockwell Automation NYSE ROK 2015 Manufacturing Southwest Airlines NYSE LUV 2015 Travel & Tourism Stryker NYSE SYK 2015 Manufacturing Toyota Motor Sales NYSE TM 2015 Manufacturing Zillow NASDAQ ZG 2015 Real Estate

Adobe NASDAQ ADBE 2016 Information Technology Akamai NASDAQ AKAM 2016 Information Technology Apple NASDAQ AAPL 2016 Information Technology Chevron NYSE CVX 2016 Oil, Gas, Energy & Utilities Costco Wholesale NASDAQ COST 2016 Retail

32 Company Name Exchange Ticker Award Year Industry

Delta Air Lines NYSE DAL 2016 Travel & Tourism Eastman Chemical NYSE EMN 2016 Manufacturing Expedia Group NASDAQ EXPE 2016 Information Technology F5 Networks NASDAQ FFIV 2016 Information Technology Facebook NASDAQ FB 2016 Information Technology Gartner NYSE IT 2016 Business Services

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S GE Aviation NYSE GE 2016 Aerospace & Defense Google NASDAQ GOOGL 2016 Information Technology Guidewire NYSE GWRE 2016 Information Technology HubSpot NYSE HUBS 2016 Information Technology NIKE NYSE NKE 2016 Manufacturing Paycom NYSE PAYC 2016 Information Technology Red Hat NYSE RHT 2016 Information Technology Salesforce NYSE CRM 2016 Information Technology SAP NYSE SAP 2016 Information Technology Southwest Airlines NYSE LUV 2016 Travel & Tourism Stryker NYSE SYK 2016 Manufacturing Twitter NYSE TWTR 2016 Information Technology Vivint Solar NYSE VSLR 2016 Oil, Gas, Energy & Utilities Workday NYSE WDAY 2016 Information Technology Zillow NASDAQ ZG 2016 Real Estate Adobe NASDAQ ADBE 2017 Information Technology Akamai NASDAQ AKAM 2017 Information Technology Apple NASDAQ AAPL 2017 Information Technology Costco Wholesale NASDAQ COST 2017 Retail Delta Air Lines NYSE DAL 2017 Travel & Tourism Apple NASDAQ AAPL 2017 Information Technology Costco Wholesale NASDAQ COST 2017 Retail Facebook NASDAQ FB 2017 Information Technology

FedEx NYSE FDX 2017 Transportation & Logistics Forrester NASDAQ FORR 2017 Business Services Google NASDAQ GOOGL 2017 Information Technology Intuit NASDAQ INTU 2017 Information Technology Johnson & Johnson NYSE JNJ 2017 Biotech & Pharmaceuticals

33 Company Name Exchange Ticker Award Year Industry

lululemon NASDAQ LULU 2017 Retail Microsoft NASDAQ MSFT 2017 Information Technology NVIDIA NASDAQ NVDA 2017 Information Technology Paylocity NASDAQ PCTY 2017 Information Technology Salesforce NYSE CRM 2017 Information Technology SAP NYSE SAP 2017 Information Technology

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Southwest Airlines NYSE LUV 2017 Travel & Tourism Texas Instruments NASDAQ TXN 2017 Manufacturing The Clorox Company NYSE CLX 2017 Manufacturing Zillow NASDAQ ZG 2017 Real Estate 3M NYSE MMM 2018 Manufacturing Accenture NYSE ACN 2018 Business Services Adobe NASDAQ ADBE 2018 Information Technology Apple NASDAQ AAPL 2018 Information Technology AvalonBay Communities NYSE AVB 2018 Real Estate Boston Scientific NYSE BSX 2018 Manufacturing Capital One NYSE COF 2018 Finance CDW NASDAQ CDW 2018 Information Technology Cisco Systems NASDAQ CSCO 2018 Information Technology Darden NYSE DRI 2018 Restaurants, Bars & Food Services Delta Air Lines NYSE DAL 2018 Travel & Tourism Disney Parks & Resorts NYSE DIS 2018 Media Electronic Arts NASDAQ EA 2018 Media Eli Lilly NYSE LLY 2018 Biotech & Pharmaceuticals Ellie Mae NYSE ELLI 2018 Information Technology Extra Space Storage NYSE EXR 2018 Real Estate Facebook NASDAQ FB 2018 Information Technology Forrester NASDAQ FORR 2018 Business Services Google NASDAQ GOOGL 2018 Information Technology

Guidewire NYSE GWRE 2018 Information Technology Hilton NYSE HLT 2018 Travel & Tourism HubSpot NYSE HUBS 2018 Information Technology Hyatt NYSE H 2018 Travel & Tourism Insperity NYSE NSP 2018 Business Services

34 Company Name Exchange Ticker Award Year Industry

Intuit NASDAQ INTU 2018 Information Technology Johnson & Johnson NYSE JNJ 2018 Biotech & Pharmaceuticals lululemon NASDAQ LULU 2018 Retail Microsoft NASDAQ MSFT 2018 Information Technology NIKE NYSE NKE 2018 Manufacturing NVIDIA NASDAQ NVDA 2018 Information Technology

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Oshkosh Corporation NYSE OSK 2018 Manufacturing Paylocity NASDAQ PCTY 2018 Information Technology Procter & Gamble NYSE PG 2018 Manufacturing Salesforce NYSE CRM 2018 Information Technology SAP NYSE SAP 2018 Information Technology Southwest Airlines NYSE LUV 2018 Travel & Tourism Starbucks NASDAQ SBUX 2018 Restaurants, Bars & Food Services Stryker NYSE SYK 2018 Manufacturing T-Mobile NASDAQ TMUS 2018 Telecommunications Taylor Morrison NYSE TMHC 2018 Construction, Repair & Maintenance Toyota Motor Sales NYSE TM 2018 Manufacturing Travelers Companies NYSE TRV 2018 Insurance Ultimate Software NASDAQ ULTI 2018 Information Technology United Airlines NASDAQ UAL 2018 Travel & Tourism VMware NYSE VMW 2018 Information Technology Zillow NASDAQ ZG 2018 Real Estate Accenture NYSE ACN 2019 Business Services Adobe NASDAQ ADBE 2019 Information Technology Apple NASDAQ AAPL 2019 Information Technology AvalonBay Communities NYSE AVB 2019 Real Estate BOK Financial NASDAQ BOKF 2019 Finance Boston Scientific NYSE BSX 2019 Manufacturing Chevron NYSE CVX 2019 Oil, Gas, Energy & Utilities

Cisco Systems NASDAQ CSCO 2019 Information Technology Costco Wholesale NASDAQ COST 2019 Retail Delta Air Lines NYSE DAL 2019 Travel & Tourism DocuSign NASDAQ DOCU 2019 Information Technology Equity Residential NYSE EQR 2019 Real Estate

35 Company Name Exchange Ticker Award Year Industry

Expedia Group NASDAQ EXPE 2019 Information Technology Facebook NASDAQ FB 2019 Information Technology FedEx NYSE FDX 2019 Transportation & Logistics Goldman Sachs NYSE GS 2019 Finance Google NASDAQ GOOGL 2019 Information Technology HP NYSE HPQ 2019 Information Technology HubSpot NYSE HUBS 2019 Information Technology WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S Illumina NASDAQ ILMN 2019 Biotech & Pharmaceuticals Intuit NASDAQ INTU 2019 Information Technology Intuitive Surgical NASDAQ ISRG 2019 Manufacturing Johnson & Johnson NYSE JNJ 2019 Biotech & Pharmaceuticals lululemon NASDAQ LULU 2019 Retail Microsoft NASDAQ MSFT 2019 Information Technology Morgan Stanley NYSE MS 2019 Finance NetApp NASDAQ NTAP 2019 Information Technology NVIDIA NASDAQ NVDA 2019 Information Technology Oshkosh Corporation NYSE OSK 2019 Manufacturing Paycom NYSE PAYC 2019 Information Technology Paylocity NASDAQ PCTY 2019 Information Technology Salesforce NYSE CRM 2019 Information Technology SAP NYSE SAP 2019 Information Technology Southwest Airlines NYSE LUV 2019 Travel & Tourism T-Mobile NASDAQ TMUS 2019 Telecommunications Texas Instruments NASDAQ TXN 2019 Manufacturing The Clorox Company NYSE CLX 2019 Manufacturing Travelers Companies NYSE TRV 2019 Insurance VMware NYSE VMW 2019 Information Technology

36 Footnotes

1. Includes only winners of the “U.S. Large” Best Places to Work list, which 8. In most years, investment periods are December 31 to the following consists of 100 employers per year with 1,000 or more employees. December 31. In cases where December 31 falls on a weekend and major stock markets are closed, we use the final trading day of that December

WHAT’S CULTURE WORTH? WORTH? CULTURE WHAT’S 2. Andrew Chamberlain, “Does Company Culture Pay Off? Analyzing Stock instead as the simulated buy and sell date. Performance of “Best Places to Work” Companies,” Glassdoor Economic Research, March 2015. Available at https://www.glassdoor.com/research/. 9. Historical data are drawn from Google Finance and Yahoo Finance. Both sources attempt to adjust closing stock prices for the impact of stock splits, 3. See, e.g., Yuan Ji, Oded Rozenbaum, and Kyle Welch (October 2017), and we rely on these sources’ methodologies for doing so. In a handful of “Corporate Culture and Financial Reporting Risk: Looking Through the rare cases where the two sources disagree about closing stock prices, we Glassdoor,” SSRN working paper: https://ssrn.com/abstract=2945745. rely on 3rd-party data stock price data from http://www.tickertech.com.

4. The 2020 list of Best Places to Work companies is not included, as a 10. The S&P 500 index represents just one of many possible benchmarks complete year of stock market performance had not yet occurred at the time for performance of Best Places to Work companies, and some readers of this writing. may want to also consider other benchmarks with different risk profiles or other characteristics. All stock returns data used in this study is available 5. We excluded firms that we judged to be minor subsidiaries of larger upon request from the authors. employers, as they may have employee culture that’s significantly different from or not representative of their larger affiliated organizations. 11. A full list of included companies and their stock tickers is included in the Appendix. 6. The complete list of publicly-traded companies and stock tickers we analyzed are presented in the Appendix. 12. Whole Foods was acquired by Amazon in 2017, and is no longer listed under a dedicated stock ticker. 7. In most cases, stock returns are calculated based on closing prices on December 31 through closing prices on the following December 31. The 13. Orbitz Worldwide was acquired by Expedia in 2015, and is no longer exceptions are 2011, 2012, 2016, 2017 and 2018, in which either the listed under a dedicated stock ticker. December 31 starting or ending date fell on a weekend day when U.S. stock markets were closed. In these cases, the next nearest trading day in 14. See for example, “Crowdsourced employer reviews and stock returns,” December was used for closing prices. by T. Clifton Green, Ruoyan Huang, Quan Wen, and Dexin Zhou, Journal of Financial Economics, October 2019.

37 About Glassdoor

Glassdoor combines all the latest jobs with millions of reviews and insights to make it easy for people to find a job that is uniquely right for them. The company is on a mission to help people everywhere find a job and company they love. In pursuit of this mission, Glassdoor helps employers hire truly informed candidates at scale through effective recruiting solutions like job advertising and employer branding products. Launched in 2008, Glassdoor now has reviews and insights for more than 900,000 companies located in more than 190 countries. For more information, visit glassdoor.com.

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