Yesterday, we “celebrated” Equal Pay Day — which represents how far into the current year US women who are working full-time and year-round must work to catch up to what their corresponding male colleagues earned the previous year. There are separate “Equal Pay Days” for different groups of underpaid workers. A recent NPR article says the gender pay gap of 82 cents hasn’t diminished much over the past 20 years even though women have been making inroads in education and entry-level professional positions. I guess that’s why Margo Price is so frustrated.
Shareholders appear to be less interested in this topic lately — but there may be more than meets the eye. Last week, Apple reported that it had secured shareholder support for every management proposal and recommendation at its annual meeting. Falling well short of a majority, 33.8% of voting shareholders supported a proposal from Arjuna Capital that requested the company shift from disclosing median racial and gender pay gaps to statistically adjusted pay gaps. So far, this appears to be the only “pay equity” proposal going to a vote this season.
You might think that this means that “private ordering” for pay transparency and pay equity is receding, but that’s likely not the case. Two trends show that companies still can’t ignore this topic:
1. Investors have merely shifted their focus to the broader concept of racial equity & civil rights audits. I’ve blogged about these proposals on The Proxy Season Blog over on TheCorporateCounsel.net and we’ve also covered what companies should do on PracticalESG.com. These audits tend to also capture the concept of pay equity.
2. In addition to the ongoing push for civil rights audits, new state laws are coming into effect that require companies to publish salary ranges for job postings. That means that employees are getting more info than they’ve ever had before – and boards should keep the resulting “human capital” risk on the radar. Just check out this stunning Twitter thread from a UX writer who aired lots of “dirty laundry” for all to see.
We discussed the Compensation Committee’s role in human capital management — and how pay equity audits come into that — during our “Top Compensation Consultants Speak” webcast yesterday. You can check out the on-demand replay at your convenience — the edited transcript will be available in a few weeks. Also check out our “Gender & Racial Pay Equity” Practice Area for other practical resources on this topic, including a checklist.
– Liz Dunshee, CompensationStandards.com, March 15, 2023