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Women and people of color continue to be paid less than their white male counterparts and investor proponents began new efforts to put companies on the spot about their pay policies and practices in 2014, intensified the campaign last year, and continue to seek change in 2018. (Workplace diversity is covered separately in this report) So far, proponents have filed about three dozen resolutions (eight are not yet public), most of them about pay disparity experienced by women and some also asking about minorities, as well. Three take up the new issue of family leave policies. (See above.)

Gender and Minority Pay Equity

Arjuna Capital remains the most prolific of the proponents in this area. It is asking 11 companies to report on gender pay disparity. At each, it requests a report “above and beyond litigation strategy or legal compliance…on the Company’s policies and goals to reduce the gender pay gap.” The gap “is defined as the difference between male and female median earnings expressed as a percentage of male earnings (Organization for Economic Cooperation and Development).” The resolution is a resubmission at American Express (11.6 percent in 2017), Bank of America (14.7 percent), Bank of New York Mellon (withdrawn), Citigroup(15.1 percent), Facebook (7.4 percent), JPMorgan Chase (15.5 percent), Mastercard (7.8 percent) and Wells Fargo (15.9 percent). It is new to Costco WholesaleProgressiveReinsurance Corp. of America and Texas Instruments. Clean Yield has refiled this at Mastercard, where it got 7.8 percent last year.

Arjuna also has a resolution at Walmart and another, co-filed with Proxy Impact, at Alphabet that is slightly different, asking for “a report on the risks to the company associated with emerging public policies on the gender pay gap, including associated reputational, competitive, and operational risks, and risks related to recruiting and retaining female talent.” A similar proposal in 2017 earned 12.6 percent at Alphabet and after a company challenge Arjuna withdrew that proposal at Wal-Mart, seeking dialogue, but refiled this year.

Pax World Funds filed at four companies—Discover Financial ServicesHPKeyCorp and Metlife—seeking a report by November “identifying whether a gender pay gap exists among its employees, and if so, outline the steps being taken to reduce the gap.”

Advocacy Position: Gender Pay at a Tipping Point on Wall Street

While most of the pay equity proposals concern themselves only with women, some proponents are more expansive. At Marriott International and TJX, Pax World and Zevin Asset Management ask for a report “on the Company’s policies and goals to identify and reduce inequities in compensation due to gender, race, or ethnicity within its workforce. Gender-, race-, or ethnicity-based inequities are defined as the difference, expressed as a percentage, between the earnings of each demographic group in comparable roles.”

Race and ethnicity, as well as gender, come up elsewhere, as well. Eve Sprunt proposes that ExxonMobil

add information to an annual report on global diversity information on the percentage pay gap of employees in the Unites States across race and ethnicity, including base, bonus and equity compensation policies to address the gaps, methodology used, and quantitative reduction targets. Since under-represented minorities vary from country to country, the annual diversity report should also include appropriate metrics used in monitoring progress in countries in which ExxonMobil operates around the world and quantitative targets to reduce gaps.

Another individual investor, Jennifer H. McDowell, wants McDonald’s to report

on the Company’s policies and goals to identify and reduce inequities in compensation due to gender, race, or ethnicity within its workforce, including franchised restaurants. Gender-, race-, or ethnicity-based inequities are defined as the difference, expressed as a percentage. between the earnings of each demographic group.

The New York City pension funds seek a report from Progressive that annually would identify “whether there exists a gender pay gap among the company’s employees, and if so, the measures being taken (policies, programs, goals etc.) to eliminate any such pay disparities and to facilitate an environment that promotes opportunities for equal advancement for women,” also using the OECD pay gap definition. The funds add, “We encourage the company to also address pay equity across race/ethnicity.” (More filings from the city funds are not yet public.)

Finally, at Walmart, a second resolution from a group of employees called Organization United for Respect asks for a report

demonstrating the company does not have any racial or ethnic pay gaps. For purposes of this Proposal, a racial or ethnic pay gap exists when (i) one or more particular jobs or statuses (e.g., management, part-time work) are disproportionately occupied by persons of a particular racial or ethnic group, compared to the composition of the workforce as a whole; or (ii) persons of one racial or ethnic group are compensated differently from persons of another racial or ethnic group performing the same job under the same job description, with the same experience and level of performance.

CEO compensation and pay disparity:
NYSCRF has a resolution at TJX that asks it to

take into consideration the pay grades and/or salary ranges of all classifications of Company employees when setting target amounts for CEO compensation. The Compensation Committee should describe in the Company’s proxy statements for annual shareholder meetings how it complies with this requested policy….

Arjuna withdrew at Costco and at Bank of AmericaBank of New York MellonCitigroup, and Wells Fargo—four of the five largest U.S. banks—after they agreed to work on closing the pay gap between their male and female employees.

SEC action:
Not many companies are challenging the pay disparity resolutions. Challenges so far include the following:

  • ExxonMobil successfully argued that Sprunt failed to provide sufficient proof of stock ownership.
  • McDonald’s also says McDowell did not prove her stock ownership.
  • Arjuna withdrew after Progressive argued the proposal was similar to one it received first from the NYC pension funds that it will include in the proxy statement.
  • In the only other challenge on substantive grounds, Texas Instruments failed to convince SEC staff that its resolution was moot given a report it had posted on its website about gender pay equity, along with information in its sustainability report.


Zevin Asset Management wants three companies to report on their paid family leave policies—CVS HealthStarbucks and Yum! Brands. The resolution is new in 2018 and asserts the companies’ family leave policy discriminates against fathers, adoptive and LGBTQ parents. At Yum, it points out a disparity in benefits since corporate headquarters parents receive 18 weeks of paid leave and workers in company restaurants get none.

The proposal goes to an early vote at Starbucks on March 21, but Yum is contending at the SEC that it concerns ordinary business and is too vague—invoking Staff Legal Bulletin 14I. It reasons that the proposal deals with compensation and workforce management, which are fundamental to day-to- day business operations, and that “There is no SEC Staff recognized significant policy issue implicated [since the SEC has not recognized paid family leave as significant] and no recognized theory of discrimination asserted.” Further, the company says its differential benefits “account for different labor markets and applies such benefits equally within each set of roles,” which is not discriminatory. Further, Yum says the proposal seeks to micromanage it. As to vagueness, the company contends the proposal fails to sufficiently define what it means by “paid family leave.” The SEC has yet to respond.