Getting companies to disclose data on gender and ethnic pay gaps within their organizations can be a difficult task, especially when it comes to the banking industry. Driven in part by Boston investment firm Arjuna Capital, four of the top 10 banks in the U.S. recently have made public that information or announced corporate commitments to equal pay for all, regardless of gender or ethnicity.
In 2015, Arjuna filed a shareholder proposal asking eBay to close its gender pay gap, which was supported by 51 percent of the online tech company’s shareholders. In October 2016, eBay released its own study finding that 99.8 percent of its female employees received compensation equal to what men made in the same job and at the same grade level.Led by Arjuna Capital’s managing partner Natasha Lamb, the company eventually got six more tech companies — Intel, Apple, Amazon, Expedia, Microsoft, and Adobe — to upgrade their standards and transparency on gender pay disparity. Google, following a wave of bad publicity, eventually followed suit.
While Silicon Valley has acquired a reputation as a boys’ club, so too has Wall Street, despite public protestations to the contrary. Last March, Lamb announced her next target would be the financial sector. Proposals were filed with Citigroup, Wells Fargo, American Express, MasterCard, Bank of America and JPMorgan Chase, urging them to prepare their own reports to address how they would reduce the gender pay gap and include the percentage gap between the pay of men and women.
“It makes no sense to hold America’s tech companies to a high standard on gender pay equity and then pretend that banks should be allowed to discount the issue and operate with no transparency,” Lamb said in announcing that move.
In the proposal, Lamb cited Bureau of Labor Statistics data from 2014 that show female financial advisers faced a 61.3 percent pay gap. And a 2016 study by management consultancy Oliver Wyman found that, while female representation was growing on financial services boards, at 20 percent, and executive committees, at16 percent, the financial services industry globally would reach 30 percent female representation on executive committees by 2048 at current rates of growth.
All six of the targeted financial institutions initially rejected Arjuna’s proposal, but now Lamb’s efforts are bearing fruit. Citigroup was the first to take action, announcing on Jan. 15 that it was taking steps to provide gender and ethnicity wage data and to close those gaps.
“Our continuing focus on pay equity furthers our goal of being the employer of choice for employees of diverse backgrounds,” Citigroup said in a statement, “and it supports our efforts to attract and retain the best talent and reward performance consistent with our leadership standards. These are clear business imperatives for Citi, and we remain firmly committed to them.”
Bank of America made a similar promise on Jan. 25, followed by Wells Fargo on Feb. 1.
“Releasing the results of our most recent study highlights Wells Fargo’s ongoing commitment to equitable pay for our team members and our commitment to attracting, developing and retaining top talent,” said Mike Branca, Wells Fargo head of compensation. “We will continue to evaluate team member compensation and make changes when warranted to pay our team members fairly and equitably and remain competitive in the marketplace.”
Arjuna Capital has since widened its Wall Street scope to include Bank of New York Mellon, Reinsurance Group and Progressive Insurance.
Mellon responded on Feb. 6: “We are committed to providing equal pay for equal work. We plan to continue our review of pay practices to further this goal and, if necessary, to make adjustments as appropriate.”
With the responses, Arjuna has withdrawn its gender pay shareholder proposals at Mellon, Citi, Bank of America and Wells Fargo.
In Fairfield and Westchester counties, it remains unclear what, if anything, is being done at community banks in the face of such mounting pressure. Several banks declined comment when approached by the Business Journal, while others did not respond to inquiries.
Regarding the recent moves by major banks, “The public companies in question were targeted by shareholder engagements, which pressured them to take actions,” Arjuna spokesman Patrick Mitchell told the Business Journal. “While the decisions by BofA, Citigroup, Wells Fargo and Bank of New York Mellon may influence smaller, privately held companies to take action, it remains to be seen how that will play out.”