Issue link: https://digital.shearman.com/i/1162884
The Top 100 Companies that disclose in their proxy their "equal pay" gap Shearman & Sterling LLP Closing the Gender Pay Gap | 23 The "Equal Pay" Gap Since 2015, more than 60 companies have received shareholder proposals on their gender pay gap. Although initially focused on the tech sector, more recent proxy seasons have seen a proliferation of these proposals in the financial services and retail sectors and, in 2019, in the healthcare sector. The companies targeted by these proposals were some of the largest public companies in the world, which has significantly elevated the prominence of the issue. Prior to the 2019 proxy season, these proposals demanded disclosure of the "equal pay" gap, i.e., the disparity in pay between men and women with comparable jobs and qualifications, as adjusted for factors such as geography and seniority. In 2018, of the 33 proposals that were filed, 24 were withdrawn as companies agreed to make disclosures and work to close their pay gaps. 4 2019: The "Median Pay" Gap While the recent disclosures on the equal pay gap is a welcomed development, these disclosures do not provide information as to the opportunity gap or the representation of women in the most high-paying positions. As a result, in 2019, Arjuna Capital, which has led the fight for gender pay gap disclosures, targeted 12 companies across the banking, tech and retail sectors with a "median pay gap" proposal. The proposal would require the issuer to disclose the median pay of women working full time to that of men working full time. The disclosure of a "median pay" gap is not new to companies that operate in the United Kingdom. Under regulations that became effective in 2017, organizations with over 250 employees doing business in the United Kingdom are required to publish annually their median gender pay gap on a government website. Of the 12 companies targeted by Arjuna Capital, only Citigroup disclosed its median pay number, which resulted in Arjuna withdrawing its shareholder proposal and Citigroup being the only company to earn an "A" on a Gender Pay Scorecard issued by Arjuna Capital and Proxy Impact. Along with its voluntary disclosure, Citigroup discussed its efforts to reduce the disparity in pay, including increasing representation at the Assistant Vice President through Managing Director levels to at least 40% for women by the end of 2021. (Citigroup also disclosed the median pay for U.S.-based non-majority employees and discussed its efforts to increase representation at the Assistant Vice President through Managing Director levels to at least 8% for black employees in the U.S. by the end of 2021.) Arjuna Capital's shareholder proposal failed at the other 11 companies it targeted, but the pressure on issuers to close the gender pay gap is not going to fade. 4 See Arjuna Capital and Proxy Impact, Gender Pay Scorecard, Second Edition. 11 The Top 100 Companies that disclose in their proxy their "equal pay" gap 14 OF THE TOP 100 COMPANIES RECEIVED SHAREHOLDER PROPOSALS RELATED TO THE GENDER PAY GAP. ON AVERAGE, THESE PROPOSALS RECEIVED 25.6% SUPPORT. THE SEVEN "MEDIAN PAY GAP" PROPOSALS THAT WERE PUT TO SHAREHOLDER VOTE RECEIVED AN AVERAGE OF 21.5% SUPPORT. On average, these disclosures show that women earn 99% of what their male counterparts earn.