Taking On Banks Over Gender Pay

Figured the day before Equal Pay Day (that’s right, that’s tomorrow!) would be a perfect time to tell you about a pretty interesting teleconference I sat in on recently.

The topic, you guessed it, was gender-pay equity. Two women — Natasha Lamb, managing director and lead filer of gender-pay resolutions for Arjuna Capital, and Former Lt. Gov. of Massachusetts Evelyn Murphy, founder and president of The WAGE Project Inc. (an activist group dedicated to gender-pay equity) — were filling listeners in on Arjuna’s next bold move: making the banks come clean on what it sees as their backward pay practices when it comes to women.

See, Arjuna was the activist investment firm (with U.S. headquarters in Boston) that took the lead last year in getting seven of nine targeted tech companies (eBay, Intel, Apple, Amazon, Expedia, Microsoft and Adobe) to include data on their pay practices in their proxy statements.

Now, said Lamb in the teleconference, her firm is going after six top banks and credit-card companies that it has financial stakes in — Wells Fargo, Citigroup, Bank of America, JP Morgan, MasterCard and American Express — to pressure them to do the same by officially considering its proposal in this year’s annual proxy statement.

Unfortunately, she pointed out, all but MasterCard are opposing Arjuna’s proposal requesting reports from the banks on the percentage pay gap between male and female employees across race and ethnicity (including base, bonus and equity compensation; policies to address that gap; the methodology used; and quantitative reduction targets).

Citigroup specifically came out and said in its proxy statement that such gender-pay-gap reporting would be “costly and time-consuming.” In fact, here is Citigroup’s entire board recommendation from that statement:

“We remain committed to our ongoing efforts to promote diversity in the workplace and believe we are making demonstrable progress in building a diverse company and compensating our employees based on performance. [Arjuna’s proposal] calls for a report on the company’s policies and goals to reduce the gender-pay gap, which would be costly and time-consuming, and in light of our many efforts in this area, would not offer stockholders meaningful additional information. As such, the proposal would not enhance the company’s existing commitment to an inclusive culture or meaningfully further its goal and efforts in support of workplace diversity; therefore, the board recommends that you vote AGAINST this proposal.”

That said, however, Citigroup spokesman Mark Costiglio did tell me his company has “had productive discussions with Arjuna Capital on its proposal and looks forward to continued engagement on this issue.” So we’ll see.

During the teleconference, Lamb lit into the entire banking industry, with direct reference to Citigroup:

“You just can’t get around the fact that big banks are in the stone ages when it comes to gender-pay equity.  Big tech stepped up in 2016 and took real action to address the legitimate concerns of long-term shareholders and women.  Yet the banks are sticking their heads in the sand, which makes you wonder: What do they have to hide?

“It’s a continuation of the status quo where bank leadership paternalistically pats investors on the head and tells them to trust them.  Unfortunately, we already know that banks are among the worst offenders when it comes to how women are treated in the workplace.  How can we hold Amazon to one standard on gender equity while Citigroup pretends it’s 1957, not 2017?”

Last year, eBay, Google and Facebook were all opposed to the pay transparency and improvement campaign. But, “when peer group after peer group agreed to it,” Lamb said, “eBay actually switched to 51-percent approval.” Though Google and Facebook remain opposed, requests to them have been resubmitted, she added.

The business case for pay equity can’t be denied, Murphy chimed in. “In the last seven years, [it’s] been very strong,” she said.

One caller asked if the tech companies have actually done more than simply become more transparent. “Have they taken more steps to close the gender gap?” she asked. Lamb’s response:

“Yes, they have.”

But the banks are going to be a tougher nut to crack, since finance is a heavily male-dominated field with one of the highest disparities of all industries examined by Glassdoor, the release points out.

Apparently, Arjuna is up for the challenge.

Meanwhile, if you’re interested in a silghtly different take on this issue, you might want to tune into this roundtable discussion tomorrow at 11 a.m. PDT hosted by PayScale and moderated by its vice president, Lydia Franks.

The gist of that discussion, Gap Analysis: What Equal Pay Day Gets Wrong, will center on the premise that the oft-quoted “women earn 80 cents for every $1 earned by men” is actually an unfair representation of the gender-pay problem because it doesn’t reflect men’s and women’s pay for the same job (which PayScale claims is actually 98 cents on the dollar).

PayScale believes that the pay gap is, instead, an opportunity gap since women tend to find themselves in lower-paying jobs than men and are also left behind men when it comes to leadership roles or promotions in the workplace.

Wherever the truth lies in all of this, I say it certainly doesn’t hurt to get more employers, whatever their industry, to open their books and start tackling discrepancies.