Jobs in finance are among those with the largest gender wage gaps. A woman who works as a securities or commodities broker, for example, makes less than 55 percent of what her male coworkers make, on average. A female financial specialist makes 60 percent of what a male one does. Even though nearly a third of financial advisers are women, they make just 62 percent of what men in those jobs make.
But women who work for large banks may not know how their pay stacks up against their male colleagues’ — a lack of transparency that makes it tough to tackle the problem. A new campaign wants to change that by pushing six major financial institutions to publish data on their gender pay gaps.
Natasha Lamb, a managing director at investor Arjuna Capital, is using her firm’s position as a shareholder at American Express, Bank of America, Citigroup, JP Morgan, MasterCard, and Wells Fargo to pressure the firms to disclose how female employees’ pay stacks up against the men’s.
“We see gender pay equity as one of the structural barriers that’s keeping women from moving up the corporate ladder into positions of leadership,” she said. “If we don’t have that level of transparency, this compensation issue that has been in a black box for decades is going to continue to stay in one.”
“If we don’t have that level of transparency, this compensation issue that has been in a black box for decades is going to continue to stay in one.”
This isn’t the first time Lamb has deployed this strategy. Last year, she and Arjuna filed shareholder resolutions at nine technology companies — Adobe, Amazon, Apple, eBay, Expedia, Facebook, Google, Intel, and Microsoft — calling for the same thing. “We started engaging with technology because it’s such a male-dominated field,” Lamb said.
Seven of the tech firms eventually disclosed data on their pay practices; Facebook and Google “simply paid lip service,” she said.
But she was encouraged by what happened at one company. As a pilot for the larger project, she first filed a resolution with eBay. The proposal went to a vote. The first time around, it got just 8 percent support — but the following year, after other technology firms had committed to releasing their data, her proposal got 51 percent support. “It’s really impressive, and it shows a lot of momentum on this issue,” she said.
Now, she’s hoping to take the momentum to Wall Street. So far she hasn’t gotten a very warm reception. Five of the six banks have printed opposition statements alongside the proxy statement shareholders will read about her proposal and the last has expressed its opposition.
None of the banks responded to a request for further comment. American Express pointed to its statement of opposition, in which it urges shareholders to vote against Lamb’s proposal because “we feel that our employees are compensated fairly regardless of gender.” Bank of America did the same; its statement reads, “Our company is committed to fairly and equitably compensating all of our employees and maintains robust policies and practices to reinforce our commitment.” Wells Fargo says it is “committed to ensuring that we do not discriminate pay on the basis of gender.” Citi urges shareholders to vote no because it “would be costly and time-consuming, and in light of our many efforts in this area, would not offer stockholders meaningful additional information.”
None of this has surprised Lamb. “Any outside proposals for the most part are always opposed by management,” she said.
The next test will be when shareholder voting begins in late April at Bank of America, Citigroup, and Wells Fargo. Lamb’s proposals aren’t likely to get overwhelming support at first. But she hopes that if pressure keeps up, what happened at eBay may happen at these firms, too.
She sees her campaign as an important part of addressing gender inequities. As shareholders, she said, “We have the right to voice issues that we think are material risks or or opportunities at companies and to place proposals on the ballots of those companies for other shareholders to weigh in on. This is an important leverage point.” Having this data on what companies are doing to address gaps is important for shareholders, she said, so investors can judge them “on an apples to apples basis.”
“As investors, we expect that companies will be adopting any pay practices that are going to benefit their brands, their ability to attract talent, and their performance,” she said. And she thinks pay transparency can accomplish all three. “Even if you have a quarter or a third of investors saying, ‘We care about this and think you should do this,’ that’s a strong signal that management should act on the issue,” she said.
Meanwhile, she thinks her prodding can get these banks out ahead of the curve. “What we’re trying to encourage is to institutionalize this process, not wait around for policymakers to tell them they need to report out on the gender pay gap,” she said.
She sees no reason why big banks shouldn’t have to be brought into the debate over the gender wage gap. “It’s certainly not an issue where [banks] should be held to a lower standard than the tech companies who came forth with their data last year,” she said.