Activist investor group Arjuna Capital has put 12 top banks and tech giants on notice that it wants these companies to reveal their median gender pay gap.
Activist investor group Arjuna Capital has put 12 top banks and tech giants on notice that it wants them to reveal their median gender pay gap. This move is yet another sign that some investors are more than willing to push companies to put numbers behind their public statements in support of gender pay equity.
Arjuna Capital is requesting the data from Adobe, Amazon, American Express, Bank of America, Bank of New York Mellon, Facebook, Google, Intel, JPMorgan, Mastercard and Wells Fargo.
In January, Citigroup took investors by surprise by revealing that its “median” or company-wide gender pay gap is 29 percent. Citi became the first U.S. company to respond favorably to the gender pay shareholder proposal from Arjuna Capital, which asks for a report to investors on the percentage global median pay gap between male and female employees across race and ethnicity, including base, bonus and equity compensation.
Pressure from investors to step up momentum is well founded. As data from the Institute for Women’s Policy Research shows, the gender-pay gap is decades away from closing for white women, a hundred-plus years from closing for black women and 200-plus years away from closing for Latina women.
And this is despite a slew of public commitments and initiatives on gender diversity and pay equity from companies over the past couple of decades. A report from Boston Consulting Group found that roughly three out of four women feel that such programs to do not make a difference.
Sallie Krawcheck, CEO and Co-founder of Ellevest, a digital financial advisor for women, and Chair of the Ellevate Network and the Pax Ellevate Global Women's Leadership Fund, a fund that invests in the top-rated companies for advancing women, agrees.
“If things were working, we’d be seeing the results,” Krawcheck told TriplePundit. “We’d see real movement in gender pay gaps. It gets worse by one penny, one penny down. It just looks like modest volatility. On Wall Street, my old industry, the trend is going in completely the opposite wrong direction.”
Will companies show their cards?
The jury is out on whether the dozen companies will follow Citigroup’s lead and comply with Arjuna’s request. The Washington Post reported that in response to emails, many of the targeted companies declined to comment, did not respond or pointed to past pay equity or diversity figures. Some have criticized the median figure has a blunt instrument that doesn’t lend itself to comparability and could lead to misleading figures.
As Brian Levine, who works with Citi and other financial services firms as a partner at the human resources consulting firm Mercer, told the Post that a bank could conceivably have half men and half women in the highest-paying jobs but a majority of lower-paying positions such as branch tellers might be held by women. At the median, there could still be a pay gap, he said, “but it’s not the case that the organization is treating women unfairly.”
For that reason, he said, he didn’t think all the companies targeted would report the figure. “I think they’ll put out more than what they’ve put at in the past," he said. “But that one statistic has a lot of bias.”
When governments step in
If voluntarily revealing such figures doesn’t work, governments can step in to move things along. A requirement now mandated in the U.K. requires companies with more than 250 workers who are citizens of the country to disclose data on median gender wage gaps in that country.
So far, the numbers reported by companies from a range of industries have shown double-digit pay gaps. That includes an 18 percent less average hourly pay rate for women at Deloitte in Britain; 33 percent less at Intel's U.K. operations, and nearly 56 percent at Goldman Sachs' United Kingdom arm.
Iceland’s government has vowed to completely close the nation’s gender pay gap by 2022, after women walked out of their jobs en masse in protest during October 2016. The Nordic country was the first country to require employers to submit to external audits to prove they are paying women on a par with men. Women in Iceland still earn 14 percent to 20 percent less than men, according to the government. Iceland says it wants to bridge the gap within five years.
In contrast to the U.K.’s gender disclosure mandates, the Trump administration suspended a rule that had compelled firms to report similar data to the government.
Investors are in the driver’s seat
For now, it may be up to investors to drive home the message that women are unwilling to wait decades for pay equity.
“Women are dramatically underrepresented in high-paying positions at nearly all major corporations,” Natasha Lamb, director of equity research and shareholder engagement at Arjuna Capital explained in the company’s press release. “So, when more U.S. companies begin disclosing their ‘median pay’ gaps, the numbers are going to be shocking. But that’s what we are dealing with. It’s the whole story.”
If more attention is drawn to the issue, she told the Post, "there will be more women in leadership, and more women in higher-paying positions that will ultimately bring better balance, better performance and better decision-making.”
Image credit: Tech Jobs Tour Portland/Flickr
Based in Florida, Amy has covered sustainability for over 25 years, including for TriplePundit, Reuters Sustainable Business and Ethical Corporation Magazine. She also writes sustainability reports and thought leadership for companies. She is the ghostwriter for Sustainability Leadership: A Swedish Approach to Transforming Your Company, Industry and the World. Connect with Amy on LinkedIn and her Substack newsletter focused on gray divorce, caregiving and other cultural topics.