The Advisors' Blog

– Lynn Jokela

Over the last year, we’ve blogged about shareholder proposals dealing with racial & gender pay equity – here’s an entry about Arjuna Capital’s continued push for companies to provide unadjusted pay gap disclosure. Recently, Arjuna and Proxy Impact issued their 2021 “Racial and Gender Pay Scorecard” and this year, two more companies made it to the top of the list with an “A” grade.  The scorecard ranks 51 large companies on their pay equity disclosures and it’s notable for companies to receive an “A” because there are only 5 companies with that score, up from 3 last year.

The report also recaps the seven-year history of pay equity proposals and although the proposals continue, so far this year the pace of proposals appears to have slowed down significantly with 7 proposals submitted as compared to 19 last year. In a sign of progress, the report attributes the reduction in number of proposals to companies being more willing to engage on the topic. To help companies improve racial and gender pay equity disclosures, Arjuna and Proxy Impact list these expectations:

Full disclosure of:

1. Quantitative adjusted racial equal pay gap %
2. U.S. unadjusted median racial pay gap %
3. Quantitative adjusted gender pay gap %
4. Global unadjusted median gender pay gap %, not only for U.K. operations
5. Pay components used to determine gap: base salary, bonus, and equity
6. % of employee base covered by analysis and disclosure
7. Methodology used in pay gap analysis
8. Policies and actions to address gap

Public commitment to:

9. 100% pay equity
10. 100% global coverage of employee base
11. Annual disclosure

For an overview about Arjuna’s and Proxy Impact’s racial & gender pay scorecard grading methodology, see the report’s appendix on page 20.