The world’s largest corporations have come under intense pressure to close their gender and racial pay gaps in response to investor pressure, the #MeToo movement, and increasing public policy and regulation. Glassdoor finds that society could reach pay parity as soon as 2035 if we keep up the current momentum. This Equal Pay Day, we have compiled our third quantitative accounting of current pay disclosures, performance, and commitments among
corporate leaders and laggards in four industries: finance, technology/communications, consumer, and healthcare. The Gender Pay Scorecard (GPS) offers a template through which to view corporate best practice, ranking companies on quantitative disclosures (not qualitative assurances), commitments to report numbers annually, global coverage, and goals to close the gender pay gap. The companies in the ranking have all been engaged by investors through the shareholder proposal process and asked to improve their public pay equity disclosures.
The GPS looks at 50 major U.S. companies, only three of which–Starbucks, Mastercard, and Citigroup–receive an “A” grade. A failing grade of “F” is awarded to half—25—of the total group of companies, including Goldman Sachs, Oracle, McDonalds, and Walmart. Ten companies (in order of rank) —Nike, Bank of New York Mellon, Progressive Insurance, Apple, Pfizer, JP Morgan, Wells Fargo, American Express, Intel, and Bank of America, Reinsurance Group—garnered a “B” grade for their efforts to disclose and act on their gender and racial pay gaps.
The GPS is divided into three main sections.
Background: The GPS provides background on shareholder engagement, regulatory pressure, and the business case for pay equity, all of which have helped to fundamentally change the landscape for women and minorities over the last few years. It also describes the difference between company-reported adjusted pay gaps and the unadjusted median pay gap disclosures mandated by the United Kingdom, and now requested by investors. The report seeks to educate companies, investors, and the public to improve understanding of the gender and racial pay equity landscape.
Findings: The GPS has compiled quantitative data on 50 companies regarding their pay equity disclosures. It breaks down this data in a simple and transparent rubric so readers can more fully understand company performance and commitments. The GPS grades companies across five categories:
- Adjusted, “Equal Pay” Gap
- Unadjusted, “Median Pay” Gap
- Racial Pay Gap
- Coverage
- Commitment
The GPS also looks at company performance within industry sectors. We see leadership from companies like Citigroup, Starbucks, and Mastercard.
Recommendations: The GPS identifies key criteria and commitments critical for gender and racial pay disclosure. Companies must first analyze their current pay structures and determine if there is a gender and/or racial pay gap. The GPS provides recommendations for best practice disclosure and goals. Transparent pay disclosures are essential to address gender and racial pay inequity in corporate America. Investors have effectively used shareholder dialogues and proposals to move this process forward. The continued growth of the gender and racial pay gap shareholder campaign, combined with an annual scorecard identifying industry leaders and laggards, will help improve corporate disclosure and practices, advancing the goal of pay equity.