The Advisors' Blog

– Liz Dunshee

I’ve blogged about the recent groundswell of interest in the gender pay gap. This Bloomberg article contrasts that with the “ho-hum” reaction to pay ratio disclosures. Here’s an excerpt:

The wave of pay ratio disclosures coincided with a different discussion of inequities in the workplace, one that all but drowned out talk of CEO pay: the #MeToo movement. Although it began as a movement about sexual harassment, #MeToo gave renewed prominence to decades-old discussions about pay ­inequity between women and men. Among the companies whose images have been tarnished by allegations of gender pay disparities is Google, which last year was sued for pay discrimination, and both Microsoft and Twitter have been sued for favoring male engineers for advancement.

Obviously, gender-based discrimination is a legal and business risk – and shareholders increasingly want information and commitments from companies. But gender pay & pay ratio issues aren’t mutually exclusive. One of the big takeaways from our “Proxy Disclosure Conference” was that, in reality, pay ratio is probably contributing to the trend of gender pay & other human capital disclosure, since companies now have the data to calculate and disclose more information about their workforce.

Some people even speculate that pay ratio will garner more attention over time because the public will track changes to the number. And if shareholders remain focused on human capital issues, a company’s broader pay ratio narrative – who’s in its workforce, how talent is developed & motivated, the impact of income inequality – could become pretty important.