stock performance of glassdoor’s best places to …...recognized as best places to work over the...

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

Andrew Chamberlain, Ph.D.Chief Economist, Glassdoor

Zanele MunyikwaMIT Sloan School of Management

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04 INTRODUCTION

03 KEY FINDINGS

22 CONCLUSION

25 APPENDIX

07 I. Methodology

11 II. Stock Performance of Best Places to Work

Contents

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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.

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• Do companies named to Glassdoor’s Best Places to Work

(BPTW) award outperform the stock market? We provide new

stock performance estimates of all publicly-traded BPTW award

winners for the complete history of the annual award program

that recognizes outstanding workplace culture from 2009

through 2019.

• We find a simple investment strategy of buying an equally

weighted portfolio of each year’s U.S. large BPTW winners

outperforms the S&P 500 index in nine of the 11 years we

examined. On average, stocks of BPTW winners earned 20.3

percent per year between 2009 and 2019, compared to 12.9

percent for the S&P 500.

• Over time, the compounded gap in stock performance between

BPTW winners and the overall stock market is substantial. A

hypothetical investment of $1,000 in each new class of BPTW

winners beginning in 2009 would have grown to $6,529 by

2019, a total investment return of 553 percent. By contrast,

$1,000 invested in the S&P 500 index for the same period

would have grown to $3,580, a total return of 258 percent — an

outperformance by BPTW winners of 295 percentage points

compared to the S&P 500 index.

• Three industry sectors lead in terms of stock performance among

BPTW companies: Retail (40.5 percent average annual return

in the year after award recognition); professional and business

services (28.3 percent); and information technology (24.7

percent). The lowest stock returns among award winners were

found in more traditional sectors of the economy: Construction,

repair and maintenance (-1.4 percent); oil, gas, energy and utilities

(3.9 percent); and insurance (4.4 percent).

• Among companies, Whole Foods (now a subsidiary of Amazon)

saw the highest annual returns earned by any BPTW winner in the

year after an award recognition. It earned an annual return of 191

percent in 2009. Other BPTW winners with above-average stock

returns include Nordstrom (+182 percent in 2009), and Orbitz

Worldwide (now a subsidiary of Expedia) (+164 percent in 2013).

• Among the 134 publicly-traded BPTW winners we examined,

the NASDAQ-listed companies collectively saw higher returns

compared to the other major U.S. exchange. The 81 listed on the

New York Stock Exchange (NYSE) earned an average annual stock

return of 16.9 percent from 2009 to 2019. By contrast, BPTW

winners traded on the NASDAQ exchange averaged 24.9 percent

— nearly twice the average return of the S&P 500 index during

that period.

• Does rank on the annual BPTW list matter to stock performance?

We find a positive -- although very weak -- association between

company rank on the yearly award and subsequent stock market

performance. On average, rising 10 places in the BPTW ranking is

associated with a 1.7 percentage point rise in annual stock returns

in the subsequent year.

• Consistent with the growing academic literature that finds a link

between employee culture and business performance, we find

that stocks of publicly-traded winners of Glassdoor’s Best Places

to Work award historically outperformed the U.S. stock market in

most years.

Key Findings

https://www.glassdoor.com/research/satisfied-employees-drive-business-results/

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4

In June 2008, the launch of Glassdoor’s employer

review survey marked a turning point for academic

research on company culture. As one of the first

online platforms allowing employees to review

employers anonymously, Glassdoor rapidly amassed

one of the most extensive and detailed databases on

company culture in the world. Through the process

of surveying millions of online job seekers as they

arrived onto Glassdoor’s platform from popular

search engines each year, the company has compiled

more than 55 million company reviews and insights,

offering rich cultural information on more than 1

million workplaces globally.

Introduction

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Less than a year after the 2008 launch of Glassdoor, the company

announced its inaugural Employees’ Choice Award for the “Best

Places to Work.” The award was unique at the time, using the

company’s growing database of anonymous employee reviews to

create the first-ever ranking of best workplace cultures based solely

on online feedback from employees. It was a radical new approach

to measuring workplace culture, using big data from an online tech

platform rather than traditional employer-led HR surveys and

applications.

Since then, Glassdoor’s annual Best Places to Work award has

grown into a celebrated institution. More than 250 U.S. employers

representing a diverse cross-section of the economy have been

recognized as Best Places to Work over the course of 12 years1,

including companies in retail, technology, manufacturing, finance,

government, energy, professional services, media and more. Today,

the award consists of 10 separate lists of top employers spanning

nine countries globally and includes both small companies (fewer

than 1,000 employees) and large enterprises.

One of the most commonly asked questions about the companies

listed as Glassdoor’s Best Places to Work is whether, in addition to

having satisfied employees, they are high-performing companies.

That is, do companies with high employee satisfaction on Glassdoor

outperform their peers financially?

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https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,19.htm

https://www.glassdoor.com/Award/Best-Places-to-Work-LST_KQ0,19.htm

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That question has sparked a vast literature of studies in recent

years examining the link between Glassdoor reviews and real-world

company performance. One of the first to do so was Glassdoor’s

own 2015 study examining the historical stock performance of

Best Places to Work winners.2 Since then, multiple academic

studies have identified several mechanisms through which online

employee sentiment on Glassdoor is a strong predictor of real-

world economic performance, ranging from future stock returns

and company profitability to the likelihood of ethical violations in

financial reporting among companies with weak employee culture.3

In this study, we update our original 2015 analysis of the real-world

stock market performance of companies named to Glassdoor’s Best

Places to Work list. We examine the full history of publicly-traded

companies named to the annual award from 2009 through 2019,

tracking their stock performance compared to the S&P 500 index —

a popular benchmark for stock performance among researchers —

during the same period. We show which companies and industries

have led Best Places to Work in stock performance each year, and

explore the link between company rank in the annual award and

subsequent stock performance.

The rest of this study is organized as follows: In Section 2, we

explain our methodology and show some basic facts about the

companies in our sample. In Section 3, we present our main results,

comparing the performance of Best Places to Work winners to the

overall stock market between 2009 and 2019. Finally, in Section 4,

we conclude and offer our thoughts on some possible mechanisms

that explain the connection between financial performance and

satisfied employee reviews on Glassdoor.

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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

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

I.

Methodology

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For investment returns, we simulated a hypothetical investor

buying an equally weighted portfolio of each year’s Best Places to

Work companies — that is, they invest an equal dollar amount in

each stock — each December following the awards announcement

and holding it for one year.8 Stock returns are based solely on price

appreciation during the year, which is simply the percentage change

in closing price from December to December. For simplicity, we

ignore the impact of dividends and taxes, and use publicly available

stock price information. 9

As a performance benchmark, we compared the stock returns of

each year’s Best Places to Work winners to the S&P 500 index,

which serves as a widely recognized proxy for overall stock market

performance. The S&P 500 index tracks the price appreciation of

roughly 500 large publicly-traded U.S. employers. Because it is a price

index rather than a “total return” index — that is, it ignores the impact

of dividends, just as in this study — it provides a reasonable benchmark

for assessing the stock performance of publicly-traded Best Places in

comparison to Best Places to Work winners. 10

What Companies Are Included?Figure 1 shows the number of publicly-traded companies in our sample

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

winners are publicly traded, with the remaining 44 percent either

privately held or subsidiaries without a dedicated stock ticker. Of the

650 winners between 2009 and 2019, we identified 134 unique publicly-

traded companies. 11

Figure 1: How Many Best Places to Work are Publicly Traded?

0

20

40

60

80

100

50

36

2009

Total U.S. Large Best Placesto Work Companies

Publicly-Traded Winners

120

50

35

50

30

50 50

34 33

50

35

50

26

50

21

100

46

100

39

2010 2011 2012 2013 2014 2015 2016 2017 2018

50

26

About 56 percent of companies named BPTW each year are publicly traded.

2019

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

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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

industry from 2009 to 2019.

Of the 134 unique public companies we examined, 44 (or

33 percent) were in the tech industry. The next largest

group is 22 employers (or 16 percent) in manufacturing,

12 employers (or 9 percent) in finance, 9 employers (or 7

percent) in biotech, 7 employers each (or 5 percent) in retail

and travel, and 6 employers (or 4 percent) in the professional

and business services sector.

As is clear from Figure 2, three sectors have dominated

the U.S. large Best Places to Work list over the years: Tech,

manufacturing, and financial services. All three of these

sectors have been dramatically impacted by the “digital

transformation” — the rise of data and software as core

aspects of companies — and that has greatly impacted

their need to attract in-demand tech talent. We believe

that competitive pressure for talent is an important reason

why these sectors have risen to the top of Glassdoor’s Best

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.

22

12

9

7

7

6

5

4

4

3

4

1

2

2

2

0 10 20 30 40

Manufacturing

Finance

Biotech & Pharmaceuticals

Travel & Tourism

Retail

Business Services

Oil, Gas, Energy & Utilities

Real Estate

Media

Aerospace & Defense

Restaurants, Bars & Food Services

Transportation & Logistics

Insurance

Construction, Repair & Maintenance

Telecommunications

Figure 2: Most Common Sectors for Best Places to Work WinnersTech, manufacturing and finance employers top the list of publicly traded BPTW

Information Technology

50

Number of Publicly Traded Winners (2009-2019)

44


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Box 1. Academic Research on Glassdoor Reviews and Company PerformanceBuilding knowledge about the importance of workplace

culture is an important part of Glassdoor’s mission. Since 2008,

Glassdoor has shared its database of millions of employee

reviews with more than 70 academic research teams around

the world, encouraging rigorous and independent research on

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:

“Crowdsourced employer reviews and stock returns,” by T.

Clifton Green, Ruoyan Huang, Quan Wen, and Dexin Zhou,

Journal of Financial Economics, October 2019.

Examined trends in Glassdoor reviews, and found that

companies who experience improvements in Glassdoor ratings

significantly outperform those with declines in the following

quarter.

“Family firms, employee satisfaction, and corporate

performance,” by Minjie Huang, Pingshu Li, Felix Meschke, and

James P. Guthrie, Journal of Corporate Finance, October 2015.

Used Glassdoor reviews to establish a causal link between

better employee satisfaction on Glassdoor and the financial

performance of a large sample of publicly-traded family firms.

“Employees’ online reviews and equity prices,” by Efthymia

Symitsi, Panagiotis Stamolampros, and George Daskalakis,

Economics Letters, January 2018.

Quantified the effect of better employee satisfaction on Glassdoor

on real-world corporate performance, finding that Glassdoor

reviews are a strong predictor of better company performance —

and that stock markets tend to undervalue good company culture.

“What Do Employees Know? Evidence from a Social Media

Platform,” by Kelly Huang, Meng Li, and Stanimir Markov, The

Accounting Review, June 2019.

Found that employee opinions on “6-month business outlook”

shared in Glassdoor reviews help predict future performance of

companies. The authors show that Glassdoor reviews contain

powerful information about both good and bad company events —

information often overlooked by stock market analysts.

“Duality in Diversity: How Intrapersonal and Interpersonal

Cultural Heterogeneity Relate to Firm Performance” by

Matthew Corritore, Amir Goldberg, and Sameer B. Srivastava,

Administrative Science Quarterly, April 2019.

Used the text of Glassdoor reviews to measure cultural similarity

inside a large sample of companies, showing that more or less

similar cultural themes mentioned in employee reviews predict

company innovation and operational performance.

https://www.sciencedirect.com/science/article/abs/pii/S0304405X19300662

https://www.sciencedirect.com/science/article/pii/S0929119915000929

https://www.sciencedirect.com/science/article/abs/pii/S0165176517304433

https://aaajournals.org/doi/10.2308/accr-52519

https://aaajournals.org/doi/10.2308/accr-52519

https://journals.sagepub.com/doi/abs/10.1177/0001839219844175?journalCode=asqa

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II.

Stock Performance of Best Places to WorkIn 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?

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Figure 3 shows the annual stock returns for each year’s class of Best

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

year, the annual return from holding Best Places to Work stocks is

shown in green, while the overall S&P 500 return is shown in black.

A green bar above the black represents a year in which Best Places

to Work outperformed the overall stock market. By contrast, a

green bar below the black represents years when the stock market

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

Figure 3: Annual Stock Performance of Best Places to Work vs. S&P 500 Index

10%

20%

30%

40%

50%

60% 56.8%

23.5%

2009

Best Places to Work S&P 500 Index

70%

21.2%

12.8%

-7.4%

0%

15.7%

40.6%

13.4%

29.6%14.3%

11.4%

2.4%

9.5%

33.9%

19.4%

3%

-6.2%

34.3%

28.9%

2010 2011 2012 2013 2014 2015 2016 2017 2018

5.2%

-0.7%

A simple portfolio of BPTW companies outperforms the S&P 500 in 9 out of the past 11 years

2019

-20%

-10%

0%An

nu

al S

tock

Ret

urn

(Pri

ce A

pp

reci

atio

n)

outperformed the Best Places to Work portfolio.

As shown in the figure, the Best Places to Work outperformed the S&P

500 index in nine of the 11 years examined, or roughly 82 percent of the

time. During this period, the S&P 500 index averaged an annual return of

about 12.9 percent. By contrast, Best Places to Work winners averaged a

20.3 percent annual return, an average outperformance of 7.4 percentage

points annually compared to the S&P 500.


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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

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.

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The Value of $1,000 Investment Over the YearsAnother way to illustrate the investment returns of a Best Places to

Work portfolio is to look at such an investment’s cumulative growth

over many years, compared with a similar investment in a portfolio

that mirrors the S&P 500 index during the same period.

Figure 4 shows the value of a hypothetical $1,000 investment made

in Best Places to Work winners at the end of 2008, along with a

comparable investment in the S&P 500 index. Each investment

strategy begins with an initial investment of $1,000. On the last

trading day of December each year, the hypothetical investor splits

a $1,000 investment equally among each years’ Best Places to Work

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

and holds both investments for one year, repeating the process each

December.

The cumulative value of a $1,000 investment in Best Places to Work

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

years, the initial $1,000 investment in Best Places to Work winners

would have grown to $6,529 by the end of 2019, a total investment

return of 553 percent. By contrast, the $1,000 invested in the S&P

500 would have grown to $3,580, a total return of 258 percent. That

amounts to a cumulative 295 percentage point investment return

outperformance by a Best Places to Work portfolio compared to the

S&P 500 index between 2009 and 2019.

$1,000

$0

$1K

$2K

$3K

$4K

$5K

$6K

$7K

Val

ue

of $

1,0

00

Init

ial I

nve

stm

ent

Figure 4: Value of $1,000 Invested in Best Places to Work vs. S&P 500 IndexAn invesment of $1,000 starting in 2008 in each year’s BPTW winners would’ve grown

to $6,529 by the end of 2019

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 20192008

$1,000

$1,568

$1,235

$1,900

$1,393

$1,760

$1,393

$2,036

$1,580

$2,863

$2,047

$3,272

$2,281

$3,442

$2,265

$3,525

$2,480

$4,720

$2,961

$4,861

$2,777

$6,529

$3,580

Best Places to Work S&P 500 Index


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Industries with Top Stock ReturnsCompanies from a variety of industries have appeared on the Best

Places to Work list over the years. One frequent question often asked

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.

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? The sector with the second-highest stock returns

between 2009 and 2019 was professional and

business services (28.3 percent, six employers). That

sector includes many leading professional services

and consulting firms such as Accenture, Gartner,

and Insperity. They are followed by the fast-growing

information technology sector (24.7 percent, 45 firms),

which includes many of today’s tech giants, including

Google, Apple, Netflix, Facebook and others.

By comparison, the weakest stock returns among

Best Places to Work winners have historically been

found in the following sectors: Construction, repair &

maintenance (-1.4 percent, two firms); Oil, gas, energy

& utilities (3.9 percent, five firms); and insurance (4.4

percent, two firms). Despite firms from these sectors

having sufficiently strong employee cultures to be named

Best Places to Work winners, the broader economic

headwinds facing these sectors in recent years has

nevertheless contributed to underwhelming stock

performance by these companies.

28.3%

24.7%

21.3%

20.4%

19.3%

18.1%

17.5%

17.2%

12.8%

11.7%

12.7%

-1.4%

3.9%

4.4%

6.5%

-5% 0 10% 20% 35%

Business Services

Information Technology

Transportation & Logistics

Travel & Tourism

Finance

Aerospace & Defence

Restaurants, Bars & Food Services

Biotech & Pharmaceuticals

Media

Manufacturing

Telecommunications

Real Estate

Insurance

Oil, Gas, Energy & Utilities

Construction, Repair & Maintenance

Figure 5: Sectors with the Highest Annual Stock Returns Among BPTW Winners

Retail, business services and tech sectors lead among publicly traded BPTW winners 2009-2019

Retail

45%

Annual Stock Return (Price Appreciation)

40.5%

5% 15% 25% 40%30%


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Top Performing CompaniesThe 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

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).

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Figure 6: 3 Best Places to Work Winners with Highest Stock Returns Each Year

0%

20%

40%

80%

120%

160%

200%

Highest annual price appreciation among each year’s class of BPTW winners 2009-2019

60%

100%

140%

180%

191%

147%

182%

Wh

ole

Fo

od

s

No

rdst

rom

Ap

ple

2009

84%

64%

2010

60%

Wh

ole

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od

s

Cat

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illar

Intu

it

33%

17%

2011

26%

Bri

sto

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Sq

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Ch

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n

2012

109%

66%73%

Rea

chlo

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ace

Sale

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2013

164%

91%

105%

Orb

itz

Wo

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wid

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Fac

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ok

Bio

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2014

125%

40%43%

Sou

thw

est

Air

lines

Fac

ebo

ok

Inte

l

2015

64%

47%59%

NV

IDIA

Gen

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Go

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e

2016

49%

31%40%

F5

Net

wo

rks

Zill

ow

Ch

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2017

81%

57%70%

NV

IDIA

Ad

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Returns by Overall US ExchangeSince 2009, a total of 134 unique publicly-traded companies have

been named to the Best Places to Work list. Of them, 81 have been

listed on the New York Stock Exchange (NYSE), while 53 have been

listed on the tech-heavy NASDAQ exchange. An obvious question

ensues: Are there any differences in the annual stock performance

of Best Places to Work companies based on which of the two major

U.S. stock exchanges they are listed?

Figure 7 shows the average annual stock performance of Best

Places to Work companies by the exchange their shares are traded

on. Between 2009 and 2019, award winners traded on the NYSE

earned an average annual stock return of 16.9 percent — well above

the S&P 500 average return of 12.9 percent during that period.

However, Best Places to Work winners traded on the NASDAQ

exchange averaged a remarkable 24.9 percent annual return —

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

What’s behind the historically strong stock performance of

NASDAQ-listed companies? There is substantial self-selection

between NYSE and NASDAQ, the two largest stock exchanges in

the world. Many high-performing tech companies in our analysis

are listed on the tech-heavy NASDAQ exchange, including Netflix,

Facebook, Apple, Google, and Microsoft. Those companies have

enjoyed spectacular stock performances in recent years that are

largely unrelated to which exchange they’re listed on; this has

helped drive returns among NASDAQ-listed winners. By contrast,

many employers in more traditional sectors, such as Wells Fargo,

Toyota and Hilton, are listed on the NYSE; those stocks on average

delivered more modest stock returns during our sample period.

Figure 7: BPTW Winner Stock Returns by U.S. Exchange

24.9%

16.9%

0%

5%

10%

15%

20%

NASDAQ Listed Companies NYSE Listed Companies

Average annual stock returns by exchange 2009-2019

25%

30%

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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

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.

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In addition, Figure 8 illustrates that the highest stock returns

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

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

between better employee sentiment and improved stock market

performance in the future (see Box 1 for a few examples).

Figure 8: BPTW Winner Rank and Annual Stock ReturnsAverage annual stock returns and award rank 2009-2019

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Lower Ranked Higher Ranked


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ConclusionIn 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.

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Our finding that U.S. employers with the best employee satisfaction

also exhibit strong business performance is consistent with today’s

growing academic literature. There is a clear link between strong

employee culture and real-world financial performance. What are

the likely mechanisms that explain this link?

The first key driver of our results is that the companies named to the

annual Best Places to Work awards are far from a random sample of

employers. The Best Places to Work winners have often come from

sectors of the economy that are fast-growing, where competition

for skilled labor is fierce, and that also have above-average stock

returns — such as tech and professional services. In response,

employers in these sectors have invested heavily in enhancing their

employee culture as a talent-attraction strategy in recent years.

These shared characteristics of employers we have examined

partially explain why Best Places to Work winners consistently

outperform the overall stock market.

Second, the risk profile of Best Places to Work winners is

significantly different from the overall stock market. Economists

teach that there is a tradeoff between risk and return in the stock

market. Although Best Places to Work winners significantly

outperform the S&P 500 over time, their returns are also much

more volatile from year to year. Thus, part of the reason why Best

Places to Work winners outperform the overall stock market is that

investors demand compensation for being willing to take on that

additional risk.

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Finally, a growing body of research shows that employee reviews

gathered by Glassdoor often contain deep insights into companies’

operational performance and employee morale — issues that may

only translate into actual business performance in subsequent

months and years.14 Information revealed on Glassdoor about

employee sentiment in one year often portends business problems

or successes in the coming one. That fact alone creates a mechanical

link between companies that are named as Best Places to Work

winners each year and their subsequent stock market performance.

Our findings reinforce the growing academic consensus about the

relationship between workplace culture and real-world business

outcomes, particularly for knowledge-based sectors in which human

resources are one of companies’ most critical assets. Our findings

further suggest that crowdsourced employee reviews can be a

powerful tool for executives in measuring, monitoring, and improving

workplace culture as a driver of innovation and financial performance.

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AppendixComplete list of all unique publicly-traded Best Places to Work

winners examined in this study.

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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

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

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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



Best Buy NYSE BBY 2010 Retail

Caterpillar NYSE CAT 2010 Manufacturing


Cintas NASDAQ CTAS 2010 Business Services

Continental Airlines NYSE CAL 2010 Travel & Tourism

EMC NYSE EMC 2010 Information Technology

FactSet NYSE FDS 2010 Finance



GlaxoSmithKline NYSE GSK 2010 Biotech & Pharmaceuticals



Harris NYSE HRS 2010 Aerospace & Defense

Intel NASDAQ INTC 2010 Information Technology


Juniper Networks NYSE JNPR 2010 Information Technology



Paychex NASDAQ PAYX 2010 Information Technology


Prudential NYSE PRU 2010 Finance


Rackspace NYSE RAX 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

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? Company Name Exchange Ticker Award Year Industry

Turner Broadcasting NYSE TWX 2010 Media

Whole Foods NASDAQ WFM 2010 Retail


American Express NYSE AXP 2011 Finance

Analog Devices NASDAQ ADI 2011 Manufacturing


BB&T NYSE BBT 2011 Finance

Bristol-Myers Squibb NYSE BMY 2011 Biotech & Pharmaceuticals



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





Monsanto Company NYSE MON 2011 Biotech & Pharmaceuticals

Morgan Stanley NYSE MS 2011 Finance




Overstock NASDAQ OSTK 2011 Retail




Shutterfly NASDAQ SFLY 2011 Information Technology


Synopsys NASDAQ SNPS 2011 Information Technology



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Coach NYSE COH 2012 Retail

Costco Wholesale NASDAQ COST 2012 Retail

Disney Parks & Resorts NYSE DIS 2012 Media

Dow Chemical NYSE DOW 2012 Manufacturing

Eli Lilly NYSE LLY 2012 Biotech & Pharmaceuticals






Groupon NASDAQ GRPN 2012 Information Technology



Johnson & Johnson NYSE JNJ 2012 Biotech & Pharmaceuticals


Morningstar NASDAQ MORN 2012 Finance




Nordstrom NYSE JWN 2012 Retail

NVIDIA NASDAQ NVDA 2012 Information Technology




Reachlocal NASDAQ RLOC 2012 Business Services




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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


Biogen Idec NASDAQ BIIB 2013 Biotech & Pharmaceuticals

Boeing Commercial Airplanes NYSE BA 2013 Aerospace & Defense




Cummins NYSE CMI 2013 Manufacturing

Dow Chemical NYSE DOW 2013 Manufacturing

Eaton NYSE ETN 2013 Manufacturing

Facebook NASDAQ FB 2013 Information Technology


Gartner NYSE IT 2013 Business Services



Hyatt NYSE H 2013 Travel & Tourism


Jet Blue NASDAQ JBLU 2013 Transportation & Logistics

LinkedIn NYSE LNKD 2013 Information Technology

Mastercard NYSE MA 2013 Finance


Orbitz Worldwide NYSE OWW 2013 Information Technology



Red Hat NYSE RHT 2013 Information Technology

Riverbed Technology NASDAQ RVBD 2013 Information Technology




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Workday NYSE WDAY 2013 Information Technology


Cameron International NYSE CAM 2014 Oil, Gas, Energy & Utilities





Eastman Chemical NYSE EMN 2014 Manufacturing

eBay Inc NASDAQ EBAY 2014 Information Technology





Guidewire NYSE GWRE 2014 Information Technology



Interactive Intelligence NASDAQ ININ 2014 Information Technology






Orbitz Worldwide NYSE OWW 2014 Information Technology





Riverbed Technology NASDAQ RVBD 2014 Information Technology



Stryker NYSE SYK 2014 Manufacturing

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Texas Roadhouse NASDAQ TXRH 2014 Restaurants, Bars & Food Services

Twitter NYSE TWTR 2014 Information Technology



Bristol-Myers Squibb NYSE BMY 2015 Biotech & Pharmaceuticals





F5 Networks NASDAQ FFIV 2015 Information Technology


Ford Motor Company NYSE F 2015 Manufacturing


GE Aviation NYSE GE 2015 Aerospace & Defense

Genesys NYSE GENESYS 2015 Information Technology


Interactive Intelligence NASDAQ ININ 2015 Information Technology







Rockwell Automation NYSE ROK 2015 Manufacturing



Toyota Motor Sales NYSE TM 2015 Manufacturing

Zillow NASDAQ ZG 2015 Real Estate






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Delta Air Lines NYSE DAL 2016 Travel & Tourism


Expedia Group NASDAQ EXPE 2016 Information Technology

F5 Networks NASDAQ FFIV 2016 Information Technology



GE Aviation NYSE GE 2016 Aerospace & Defense



HubSpot NYSE HUBS 2016 Information Technology


Paycom NYSE PAYC 2016 Information Technology






Twitter NYSE TWTR 2016 Information Technology

Vivint Solar NYSE VSLR 2016 Oil, Gas, Energy & Utilities

Workday NYSE WDAY 2016 Information Technology











Forrester NASDAQ FORR 2017 Business Services




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lululemon NASDAQ LULU 2017 Retail

Microsoft NASDAQ MSFT 2017 Information Technology


Paylocity NASDAQ PCTY 2017 Information Technology





The Clorox Company NYSE CLX 2017 Manufacturing


3M NYSE MMM 2018 Manufacturing




AvalonBay Communities NYSE AVB 2018 Real Estate

Boston Scientific NYSE BSX 2018 Manufacturing


CDW NASDAQ CDW 2018 Information Technology


Darden NYSE DRI 2018 Restaurants, Bars & Food Services



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


Forrester NASDAQ FORR 2018 Business Services



Hilton NYSE HLT 2018 Travel & Tourism



Insperity NYSE NSP 2018 Business Services

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Oshkosh Corporation NYSE OSK 2018 Manufacturing








T-Mobile NASDAQ TMUS 2018 Telecommunications

Taylor Morrison NYSE TMHC 2018 Construction, Repair & Maintenance

Toyota Motor Sales NYSE TM 2018 Manufacturing


Ultimate Software NASDAQ ULTI 2018 Information Technology

United Airlines NASDAQ UAL 2018 Travel & Tourism

VMware NYSE VMW 2018 Information Technology





AvalonBay Communities NYSE AVB 2019 Real Estate

BOK Financial NASDAQ BOKF 2019 Finance

Boston Scientific NYSE BSX 2019 Manufacturing





DocuSign NASDAQ DOCU 2019 Information Technology

Equity Residential NYSE EQR 2019 Real Estate

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Expedia Group NASDAQ EXPE 2019 Information Technology





HP NYSE HPQ 2019 Information Technology


Illumina NASDAQ ILMN 2019 Biotech & Pharmaceuticals


Intuitive Surgical NASDAQ ISRG 2019 Manufacturing




Morgan Stanley NYSE MS 2019 Finance



Oshkosh Corporation NYSE OSK 2019 Manufacturing

Paycom NYSE PAYC 2019 Information Technology





T-Mobile NASDAQ TMUS 2019 Telecommunications


The Clorox Company NYSE CLX 2019 Manufacturing


VMware NYSE VMW 2019 Information Technology

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Footnotes

1. Includes only winners of the “U.S. Large” Best Places to Work list, which

consists of 100 employers per year with 1,000 or more employees.

2. Andrew Chamberlain, “Does Company Culture Pay Off? Analyzing Stock

Performance of “Best Places to Work” Companies,” Glassdoor Economic

Research, March 2015. Available at https://www.glassdoor.com/research/.

3. See, e.g., Yuan Ji, Oded Rozenbaum, and Kyle Welch (October 2017),

“Corporate Culture and Financial Reporting Risk: Looking Through the

Glassdoor,” SSRN working paper: https://ssrn.com/abstract=2945745.

4. The 2020 list of Best Places to Work companies is not included, as a

complete year of stock market performance had not yet occurred at the time

of this writing.

5. We excluded firms that we judged to be minor subsidiaries of larger

employers, as they may have employee culture that’s significantly different

from or not representative of their larger affiliated organizations.

6. The complete list of publicly-traded companies and stock tickers we

analyzed are presented in the Appendix.

7. In most cases, stock returns are calculated based on closing prices on

December 31 through closing prices on the following December 31. The

exceptions are 2011, 2012, 2016, 2017 and 2018, in which either the

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

December was used for closing prices.

8. In most years, investment periods are December 31 to the following

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

instead as the simulated buy and sell date.

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,

and we rely on these sources’ methodologies for doing so. In a handful of

rare cases where the two sources disagree about closing stock prices, we

rely on 3rd-party data stock price data from http://www.tickertech.com.

10. The S&P 500 index represents just one of many possible benchmarks

for performance of Best Places to Work companies, and some readers

may want to also consider other benchmarks with different risk profiles or

other characteristics. All stock returns data used in this study is available

upon request from the authors.

11. A full list of included companies and their stock tickers is included in

the Appendix.

12. Whole Foods was acquired by Amazon in 2017, and is no longer listed

under a dedicated stock ticker.

13. Orbitz Worldwide was acquired by Expedia in 2015, and is no longer

listed under a dedicated stock ticker.

14. See for example, “Crowdsourced employer reviews and stock returns,”

by T. Clifton Green, Ruoyan Huang, Quan Wen, and Dexin Zhou, Journal of

Financial Economics, October 2019.

https://www.glassdoor.com/research/

https://ssrn.com/abstract=2945745

http://www.tickertech.com

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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.

About Glassdoor

© Glassdoor, Inc. All rights reserved

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