Racial and Gender Pay Scorecard (2021)

The world’s largest corporations are under intense pressure to close their racial and gender pay gaps in response to investor pressure, the Black Lives Matter and #MeToo movements, and increasing public policy and regulation. The global Coronavirus pandemic has only exacerbated racial and gender pay gaps and underlined the need for action.

 

This Equal Pay Day, we have compiled our fourth quantitative accounting of current pay disclosures, performance, and commitments among corporate leaders and laggards in four industries: finance, technology/communications, consumer, and healthcare. The Racial & Gender Pay Scorecard 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 racial and gender pay gaps. 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 Scorecard looks at 51 major U.S. companies, only five of which–Mastercard, Starbucks, Pfizer, Citigroup, and Bank of New York Mellon–receive an “A” grade. A failing grade of “F” is awarded to over half—26—of the total group of companies, including Goldman Sachs, Colgate, AT&T, McDonalds, Walmart, and Biogen. Eleven companies (in order of rank) — Adobe, Nike, Progressive Insurance, American Express, Reinsurance Group, JPMorgan Chase, Apple, Cincinnati Financial, Bank of America, Wells Fargo, and Intel—garnered a “B” grade for their efforts to disclose and act on their racial and gender pay gaps. 

 

The Scorecard is divided into three main sections.

 

Background: The Scorecard 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 U.S. investors. The report seeks to educate companies, investors, and the public to improve understanding of the racial and gender pay equity landscape.

 

Findings: The Scorecard has compiled quantitative data on 51 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 Scorecard grades companies across five categories:

The Scorecard also looks at company performance within industry sectors. We see leadership from companies like Mastercard, Starbucks, Pfizer, Citigroup, and Bank of New York Mellon. While others like Goldman Sachs, Verizon, McDonald’s, and Walmart remain guarded in their disclosures and lag peers.

 

Recommendations: The Scorecard identifies key criteria and commitments critical for racial and gender pay disclosure. Companies must first analyze their current pay structures and determine if there is a racial and/or gender pay gap. The Scorecard provides recommendations for best practice disclosure and goals. Transparent pay disclosures are essential to address racial and gender pay inequity across corporate America. Investors have effectively used shareholder dialogues and proposals to move this process forward. 

 

The continued growth of the racial and gender 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.