International Women’s Day: Investor campaign over median gender pay equity scores successes

Arjuna Capital has filed proposals on median gender pay equity at 13 companies this year

Arjuna Capital has filed median gender pay equity shareholder proposals at 13 companies this year, but two – Mastercard and Starbucks – have already agreed to disclose their median gender pay gap data.

The payments firm and coffee chain follow Citigroup, which agreed to the disclosure last year, in agreeing to disclose more detailed gender/racial pay equity data following shareholder proposals that have requested the additional disclosure. They were among the more than a dozen companies targeted by sustainability investor Arjuna Capital in its latest campaign. 

A proposal at Microsoft’s annual meeting in December last year, which the board opposed, has already been voted on and received almost 30% support.

Median gender pay equity disclosure is mandated in the UK for companies of a certain size, but its disclosure is still virtually unknown in the US, where companies prefer to disclose ‘adjusted’ figures that show pay levels for equal work. The more stringent disclosure “requires companies to make public wage gaps between male and female employees across race and ethnicity, including base, bonus and equity compensation”. According to the press release announcing the campaign and its early successes, 22 leading US corporations have responded to Arjuna Capital’s shareholder resolutions by agreeing to provide gender pay gap disclosures, including three that have stepped up to the more stringent standard of disclosing median gender/racial pay equity data; most of these have published the ‘adjusted’ figures. 

“The median pay gap is often not flattering, but that’s not an excuse for secrecy” – Arjuna’s Natasha Lamb

According to the resolution, women account for 55% the US workforce, but only 26.3% of leadership. “Assessing if a company has pay gaps requires analyzing both equal pay and equal opportunity by using adjusted and unadjusted (median) pay data,” it says. “The objective of this proposal—median pay gap disclosure—addresses the structural bias affecting the jobs women and minorities hold, when white men hold most higher paying jobs.” 

Median gender/racial pay disclosures “expose a lack of female/minority representation in higher-paying jobs, and less women/minorities in leadership”. They describe: “what men make and what women make, and what minorities and non-minorities make on a median, unadjusted basis”.

In an interview with RI, Arjuna’s Managing Partner Natasha Lamb said that she felt two things had contributed to the early success of the campaign.

Firstly, the UK’s mandated disclosure of the median gender pay gap, which means that large, multinational companies already have to calculate and publish data for their UK-based workforces. 

And Arjuna’s earlier success asking companies to disclose the equal pay for equal work statistics. “The median pay gap is often not flattering, but that’s not an excuse for secrecy,” she commented. “And it exposes the root cause issue of the lack of women and minorities in senior roles.”

Arjuna is in productive dialogue, said Lamb, with many of the companies also targeted with resolutions, and another agreement is likely with at least one of them, allowing the firm to withdraw the resolution as at Starbucks and Mastercard.

The other companies in receipt of resolutions are: Adobe, Alphabet/Google, Amazon, Facebook, Intel, American Express, Bank of America, Bank of New York Mellon, JPMorgan and Wells Fargo. 

In a press conference accompanying the release, Lamb noted that JPMorgan already published ‘adjusted’ figures which showed a negligible pay gap but that the banking industry was widely known to employ large numbers of women in low-paying positions and few in well-paid management jobs, and that that was precisely what the median gender pay disclosures were designed to get at. Indeed, new research from RobecoSAM shows this imbalance, with women making up more than 50% of the workforce and less than 20% of the board.

As part of its agreement with Arjuna, Mastercard disclosed that “median pay for women globally is 92.2% of the median for men”. Starbucks stated that: “In 2019 the median pay for women globally is 98.3% of the median for men. In the US, the median pay ratio is 100% for women and 100% for people of color.” 

Citigroup is disclosing data for the second year, and its raw gap analysis showed that median pay for women is improving, at 73% of the median for men, up from 71% last year. The median pay for US minorities is also improving, at 94% of the median for non-minorities, up from 93% last year. 

Arjuna Capital has submitted other proposals at other companies on issues ranging from climate risk, human/civil rights, to workplace sexual harassment.

The workplace sexual harassment proposal at media company Comcast/NBC Universal cites “an alleged failure to protect employees from sexual harassment in the workplace, failing to hold those culpable accountable, and lacking transparency…. To avoid legal and reputational risk, as the employer of 184,000 workers, Comcast must create a culture of accountability and transparency, and protect employees from harassment and discrimination.” 

Comcast has challenged the proposal, asking the SEC if it can omit it, while Arjuna has filed additional materials based on arguments that sexual harassment is not “ordinary business”. 

In 2019 and 2018, Arjuna engaged with Starbucks, Citibank, JP Morgan, Wells Fargo, Bank of America, Bank of New York Mellon, American Express, Mastercard, Reinsurance Group and Progressive Insurance and successfully persuaded them to publish their gender and racial equal pay for equal work pay gaps. Earlier agreements – the campaign has been active since 2016 – include Apple, Amazon, Intel, Microsoft, Google, Facebook, eBay, Adobe, Expedia, and Nike.  

State Street Global Advisors (SSGA) announces ‘Fearless Girl’ campaign successes

In another announcement on gender parity, State Street’s investment division SSGA released statistics showing that by February 2020, 681 companies out of the 1,384 identified in its ‘Fearless Girl’ campaign have added a female director. In the US, 495 boards added a female director, while 33 and 13 made this change in Canada and the UK, respectively. In Japan, 101 boards added a female director and 30 added a female director in Australia. Last year also marked the first time every S&P 500 company had a woman on the board.

SSGA also announced that it would be expanding its gender diversity voting guidelines to Hong Kong and Singapore; the guidelines indicate that the fund will vote against the entire nominating and governance committee, not just the chair, “if concerns exist about the lack of gender diversity for four consecutive years and the companies are unable to engage in productive dialogue”.