Of 51 companies examined in Arjuna Capital’s latest “
Racial and Gender Pay Scorecard,” 44% now report racial pay data, according to the investor’s
press release. The 2021 scorecard, the fourth of its kind, focused on the finance, technology, consumer and healthcare sectors and included only companies that have received a shareholder proposal on the topic of pay equity and diversity. This year, the report graded companies across five categories: racial pay gap, gender pay gap, UK pay gap (raw unadjusted median pay gap), coverage (both in terms of % of employees covered as well as the components of pay covered in the disclosure) and commitment to annual and global goals.
Arjuna has long maintained that best practice pay equity reporting must include both adjusted gaps (equal pay for equal work) AND unadjusted raw gaps (median pay without regard to differences in tenure, qualifications etc). Noting that “statistically adjusted equal pay reporting is an important first step, but it’s not the end of the story,” the report lauds Citigroup, Starbucks, Mastercard and Pfizer for being the only companies to report both numbers (BNY Mellon has committed to doing so for 2021).
Arjuna has only filed 7 shareholder proposals this year, compared to 33 proposals in 2018; this may reflect past successes in its target industries as well as increased willingness of companies to respond to campaigns that don’t utilize formal proposals. For 2021, Arjuna gave over half its target list an “F” grade, mostly due to lack of public disclosure of either adjusted or median pay gaps. While this ranking in and of itself is unlikely to cause substantial changes in mainstream investor support, Arjuna has made a name for itself in this area and companies should at least review the scorecard annually.
