'Be honest' about U.S. gender pay gap, investors tell firms

by Ellen Wulfhorst | @EJWulfhorst | Thomson Reuters Foundation
Wednesday, 6 March 2019 16:04 GMT

ARCHIVE PHOTO: People walk past the New York Stock Exchange in the Manhattan borough of New York, September 21, 2015. REUTERS/Carlo Allegri

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In the United States women working full-time earn 20 percent less than men on average

By Ellen Wulfhorst

NEW YORK, March 6 (Thomson Reuters Foundation) - A fresh round in the battle for equal pay will be fought at upcoming U.S. corporate annual meetings, where investors will demand that firms reveal how much less women earn than men.

The latest tactic is to use shareholder resolutions - where stock owners propose issues to be voted upon - to request companies' average salaries, said Natasha Lamb, a managing partner at the investment firm Arjuna Capital.

Arjuna, which specialises in sustainable and ethical investing, is asking nearly a dozen tech, retail and banking companies to disclose median pay at their annual meetings with shareholders, she said.

"They all have big gender pay gaps, and until they open up and be honest about what those gaps are, we won't have a baseline for which to measure progress going forward," Lamb said ahead of Friday's International Women's Day.

"Women are often holding these lower-paying positions and not as many of these high-paying leadership positions."

Under British law, businesses with more than 250 staff have to submit their gender pay gap figures annually - but this is not the case in the United States, where women working full-time earn 20 percent less than men on average.

Pressing companies to reveal their average pay can help fix gender-based problems in hiring and promoting, campaigners say.

Just one company, the giant bank Citigroup Inc, disclosed its global gender pay gap - of 29 percent - in response to an Arjuna request earlier this year.

Opponents argue that providing such data is costly, that pay data without context is meaningless and posting the information publicly could invite a deluge of lawsuits.

Shareholder resolutions for social action are becoming popular among gender activists, catching up with those focused on electoral contributions and climate change, said Michael Passoff, head of Proxy Impact, which supports investor advocacy.

The tactic first caught on in the 1970s when investors demanded companies divest from South Africa during apartheid rule. The resolutions are non-binding and often put forward by large pension funds or faith-based investors.

"Median pay shows the gap ... in hiring and positions," Passoff told the Thomson Reuters Foundation.

"That's the thing that the gender pay shareholder campaign is starting to focus on this year."

Gender is the focus of nearly a third of some 400 shareholder resolutions dealing with social, environmental and governance issues proposed for the upcoming slate of annual meetings, said Passoff.

"There's a whole emerging world of gender equality and shareholder advocacy that I think is going to be very powerful," said Andrew Behar, chief executive of As You Sow, a group that promotes corporate responsibility.

A study in the Harvard Business Review this year found mandatory disclosure of pay data in Denmark led to more women being hired and promoted and better pay for low and mid-level workers.

"There's power is having the data out in the open because companies know that they can do better," Lamb said.

(Reporting by Ellen Wulfhorst, Editing by Katy Migiro (Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking, property rights and climate change. Visit http://news.trust.org))

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