Racial and Gender Pay Scorecard (2023)

The world’s largest corporations are working to close their racial and gender pay gaps in response to investor pressure, increasing regulation domestically and abroad, and our global reckoning with systemic racism and sexism amplified by movements like Black Lives Matter and #MeToo. The global coronavirus pandemic only exacerbated racial and gender pay gaps and underlined the need for action, as women and minorities were most impacted. This Equal Pay Day, we have compiled our sixth quantitative accounting of current pay disclosures, performance, and commitments among corporate leaders and laggards in four sectors of the economy: finance, technology/communications, consumer, and healthcare. The Racial & Gender Pay Scorecard (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 2023 Scorecard looks at 68 major U.S. companies, 13 of which (in order of rank)–Target, Starbucks, Mastercard, Microsoft, Pfizer, Bank of New York Mellon, Citigroup, Adobe, American Express, Visa, Lowe’s, Best Buy, and Home Depot–receive an “A” grade. For the Scorecard’s first time ever, a company—Target—received a perfect score, A+, due to disclosure of 100% equal unadjusted and adjusted racial and gender pay gaps and full disclosure of its methodology. Another 13 companies (in order of rank) — Thermo Fisher, Chipotle, Apple, Nike, Progressive Insurance, Key Corp, McDonald’s, Wells Fargo, Amalgamated Bank, Marsh & McLennan, Bank of America, Verizon, and Disney—garnered a “B” grade for their efforts to disclose and act on their racial and gender pay gaps. A failing grade of “F” was awarded to 25 companies, including Goldman Sachs, Alphabet, Walmart, and Quest Diagnostics.

 

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 Ireland, which more than 40 U.S. companies have now voluntarily committed to publish. 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 68 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 Target, Starbucks, Mastercard, and Pfizer. While others like Goldman Sachs, Meta Platforms, Marriott, and AT&T remain guarded in their disclosures and lag peers. And some companies who previously reported their quantitative pay gaps have not done so for the last 2+ years, causing their scores to fall from previous scorecards, including Intel, and HP Inc. 

 

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 quantitative 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.