US SRI investors seeking disclosure about ‘gender pay gap’ score victory at Citigroup

SEC rejects bank’s contention that Trillium-backed motion was too vague.

US-based socially responsible investors that want companies to look into whether there is evidence of discrimination in the pay of male and female employees (so-called ‘gender pay gap’) have scored a victory at US bank giant Citigroup.
Ruling on a no-action request from Citigroup, the Securities and Exchange Commission (SEC) said the bank must include in its proxy materials a shareholder proposal requiring a report by September on whether a gender pay gap exists at Citigroup.
The proposal was filed on behalf of a Citigroup shareholder by Trillium Asset Management, the Boston-based SRI firm with $2bn (€1.8bn) under management. In it, Trillium says the question of a gender pay gap “is a significant public policy issue confronting Citigroup.” To support the claim, the SRI investor points to a slew of media reports about the issue and several recent regulatory moves, including a California state law that seeks to address the gap. Citigroup asked the SEC for permission to exclude the proposal because it was too vague. In its no-action request, the bank wrote: “Under the proposal, neither the company nor the stockholders can determine whether the proponent is asking the company to tout publicly its current compensation practices or to explore changes to those practices to remedy a perceived gap in compensation of men versus women.”Yet Trillium replied that because the proposal simply asks the bank to investigate and report whether a gender pay gap exists, there was no confusion at all. “We would contend that Citigroup would not be satisfied by any other wording and is trying to trying to generate ambiguity where there is none,” said Trillium in its appeal of the exclusion attempt. The SEC sided with Trillium, meaning that Citigroup shareholders will vote on the proposal at the bank’s annual general meeting (AGM) in April.
The SEC’s approval comes about a month after a similar motion from Trillium peer Arjuna Capital failed at US software firm Adobe. However, the reason for the failure was only due to Arjuna’s proposal allegedly not arriving at in time for it to be considered for inclusion in Adobe’s proxy materials.
Beyond Adobe, Arjuna has filed motions seeking disclosure about a possible gender pay gap at Google, Amazon, eBay, Expedia, Facebook, Intel, Microsoft and Apple. In them, it argues for the disclosure along the same lines as Trillium. Link to earlier RI report