High-profile killings of Black men and women in 2020 highlighted the grave consequences of systemic racism in our society, sparked nationwide protests for racial justice, and prompted many companies, including at least 67 S&P 100 companies, to publicize their commitments to racial equity and diversity. We believe demonstrable commitments to hire, equitably compensate, retain, and promote Black employees, other employees of color, and women can contribute not only to a more just society, but also to improved company performance.
In a July 2020 letter, New York City Comptroller Scott M. Stringer, on behalf of the New York City Employees’ Retirement System, Teachers Retirement System of the City of New York, and New York City Board of Education Retirement System (the “Systems”) called on the 67 companies to match their public statements in support of racial equality, diversity, and inclusion with concrete action by disclosing the Consolidated EEO-1 Report they are required to submit annually to the U.S. Equal Employment Opportunity Commission (EEOC).
Comptroller Stringer and the Systems subsequently submitted shareholder proposals for the 2021 proxy season to 24 of the companies that did not initially commit to disclosure. The proposals requested the Consolidated EEO-1 Report itself, which provides the raw numbers for each employment category. This disclosure gives investors and the public a comprehensive breakdown of a company’s U.S. workforce by race, ethnicity, and gender according to 10 employment categories, including, importantly, senior management, defined to incorporate individuals within two reporting levels of the CEO.
The Consolidated EEO-1 Report is the “gold standard” for diversity disclosure and will enable investors to evaluate companies’ performance in terms of their ability to hire, retain, and promote employees of color and women. Disclosure of this report will provide investors with critical information, including:
Standardized, quantitative, and reliable data that are comparable across companies, enabling investors to assess the representation of Black employees, other employees of color, and women in various job categories;
Specific data on senior management diversity;
Particularized data that allow investors to assess the representation of specific racial and ethnic groups by gender, such as Black female employees in a job category, and to make meaningful, year‐over‐year comparisons.
Response to the letters and shareholder proposals has been overwhelmingly positive and is on track to establish a new market standard. Prior to the July launch of the Comptroller’s campaign, there were approximately 31 public companies that disclosed their Consolidated EEO-1 Report, of which 14 were in the S&P 100. As a result of the campaign, 52 additional S&P 100 companies will disclose their Consolidated EEO-1 Report, representing a substantial majority (66) of S&P 100 companies. These include Home Depot, among others, which has received a shareholder proposal requesting EEO-1 Report disclosure every year since 1998.
As of early February 2021, 15 proposals appear likely to go a vote – including at Lowe's, McDonald's, and Disney, among others – although engagements remain ongoing.
Michael Garland
Assistant Comptroller, Corporate Governance and Responsible Investment Office of New York City Comptroller