Gender pay equity emerged as a hot topic in shareholder engagement this year and pressure directed at companies to close their gender pay gaps, which is getting results, continues to build.
Investors filed shareholder proposals with nine leading technology companies for the 2016 proxy season, up from one in 2015, asking them to prepare reports about their policies and goals for closing their gender pay gaps. Seven of the companies—Intel, Apple, Amazon, Expedia, Microsoft, Adobe and eBay—have since released reports, which say their gender pay gap is closed, nearly closed, or will close shortly.
Arjuna Capital, lead filer on all the proposals, plans to also engage with the big banks and some retailers next year. Pax World Management, lead filer on Apple and co-filer with Amazon and eBay, is considering expanding engagement to financial companies.
“We chose to engage on pay because it’s a game of numbers—you can look at it and fix it,” says Natasha Lamb, a managing partner and director of equity research and shareholder engagement at Arjuna Capital. “That’s far simpler than trying to change the unconscious bias of a hiring manager.”
Like others, she views lack of equal pay in the tech sector as a structural barrier that prevents women from advancing in their careers and companies from attracting and retaining top talent. “Silicon Valley is a bit of a boys’ club,” she says.
Of the companies receiving gender pay shareholder proposals, “Google [Alphabet] and Facebook are the only real holdouts although they’ve paid a lot of lip service to this,” says Lamb. “They just haven’t come out with any quantitative numbers.”
This month, eBay, which in April received a 51% shareholder vote for pay parity, released a gender pay equity study. It reports nearly 100% pay parity globally between women and men “in the same job, at the same grade level and in the same country.” Lamb is pleased by the response, after two years of silence from eBay, but wants to see greater transparency on bonuses, stock and pay by employee level.
So does Michael Passoff, CEO of Proxy Impact, a San Francisco-based proxy voting service, and co-author of the annual report Proxy Preview. Despite what technology companies are saying, “I’m still not convinced there is no pay gap there,” he says.
Pax World Management has written to 31 technology companies asking about gender pay equity. Pax Ellevate Management, a joint venture of Pax World and Ellevate Asset Management, petitioned the SEC to require public companies to disclose gender pay ratios on an annual basis. Pax World has also encouraged others to write to the SEC.
“Hearing from a chorus of voices can resonate with companies and make a bigger impact,” says Heather Smith, lead sustainability research analyst at Pax World.
Gender pay equity “is something companies are certainly paying attention to internally,” she says. More than 50 companies have joined the White House Equal Pay Pledge, she adds, and some states are toughening pay equity laws. Included are California, New York, Maryland and Massachusetts.
Smith anticipates Pax World will file more proposals on gender pay equity for 2017 than 2016. It has already filed with Qualcomm, a leader in wireless technologies. “Managing pay equity is really a driver of diversity,” she says.