August 1, 2023
Shareholder Proposals: This Year’s “Pay Equity” Results
Here’s an update from Gibson Dunn on how “pay equity” shareholder proposals fared this season:
The number of shareholder proposals calling for a report on the size of a company’s gender and racial pay gap and policies and goals to reduce that gap increased during the 2023 proxy season. In 2023, shareholders submitted 16 proposals (up from nine proposals submitted in 2022), including two resubmissions to companies that received pay gap proposals last year. Six gender/racial pay gap proposals were submitted by Arjuna Capital and 10 were submitted by James McRitchie and/or Myra Young. Average support for these proposals decreased in 2023 as compared to 2022: the nine proposals voted on in 2023 received average support of 31.7% (with none receiving majority support), a significant decrease from average support of 42.6% for the five proposals voted on in 2022 (with two receiving majority support).
Six proposals were not included in the company’s proxy statement, with one proposal withdrawn after the company agreed to disclose quantitative median and statistically adjusted pay gaps. Each of these proposals targeted unadjusted pay gaps. In addition, where the company did not already provide adjusted wage gap information for comparable jobs (i.e., what women and ethnic minorities are paid compared to their most directly comparable male and nonminority peers, adjusted for seniority, geography, and other factors), the proposals requested that the company also provide adjusted pay gap disclosure.
Even though these proposals aren’t garnering significant shareholder support, other trends & developments mean that corporate leaders and advisors must continue to pay attention to “pay equity” – while also approaching any policies and disclosures carefully so they aren’t perceived as being discriminatory. Meredith blogged a few weeks ago about data collection tips to ensure that any information that you disclose is accurate & consistently calculated. When it comes to disclosure examples, Arjuna is still publishing its annual “Racial & Gender Pay Scorecard” – and for the first time in 6 years, Arjuna awarded a perfect score to a company for its disclosure.
– Liz Dunshee