Citigroup has become the first major U.S. bank to respond to shareholder pressure and agree to disclose wage data and adjust employee salaries in a company-wide effort to achieve gender and ethnicity pay equity.
The move comes in response to efforts by Arjuna Capital, an investment firm focused on sustainable and impact investing, which put forth a gender pay shareholder resolution in November 2017. Citi would have been required to include the resolution in its 2018 proxy statement.
Arjuna Capital is known for using shareholder resolutions to promote gender pay equity in the tech, banking, and retail sectors. In 2016, the firm was successful in getting seven tech companies to disclose their gender pay gaps.
The one-page resolution makes a compelling case for change, and includes the following statistics:
- The median income for women working full time in the United States is 80 percent of that of their male counterparts. This $10,470 disparity can equal nearly half a million dollars over a career.
- The gap for African American and Latina women is 60 percent and 55 percent, respectively.
- Payscale reports a 10 percent mean pay gap at Citigroup, and a 14.8 percent gap for top earners.
- Glassdoor finds an unexplained 6.5 percent gender pay gap in the financial industry after statistical controls, among the highest of industries examined.
- RobecoSAM finds a 12 percent pay gap for financial company managers.
- The U.S. Bureau of Labor Statistics reports female financial advisors faced a 61.3 percent pay gap in 2014, the widest of occupations reviewed.
- Women make up more than half of entry level positions in finance, yet Oliver Wyman finds it will take until 2048 to reach 30 percent executive committee representation.
- Mercer finds female executives are 20 to 30 percent more likely to leave financial services careers than other careers.
With regard to the banking giant specifically, the resolution indicates that at Citigroup, 51 percent of employees are women, yet women account for only 24 percent of executives.
On January 15, Arjuna Capital sent a letter to Citigroup counsel, formally withdrawing the shareholder resolution, stating that “Citigroup has committed to analyze, and disclose on the Diversity section of its website, the Company’s pay gap in the US, UK and Germany, related to women compared to men and US minorities compared to non-minorities and its goal of closing gaps related to women and US minorities inclusive of both salary and incentive compensation.”
The firm also issued a statement. Natasha Lamb, managing partner of Arjuna Capital said: “Citigroup is stepping into a leadership role on the gender pay gap that we have not seen from any of its US financial peers. This is a tipping point for the Wall Street Banks. We expect women will not only receive the pay they deserve at Citi, the company will reap the benefits of talent acquisition and retention so that more women can move into leadership. Other leading banks can either follow Citi’s example on gender pay or risk further laggard status on issues of concern to women.”
Citigroup’s website, which includes a Global Diversity and Inclusion section, now has a subsection called Pay Equity. Here, the company speaks about its commitment and the steps it is taking: “As part of this year’s compensation cycle, we are making appropriate increases to help close the gaps for both women and U.S. minorities. We will also adjust compensation for other individuals where the analysis determined increases were warranted.”
|Paula Santonocito, Contributing Editor for Recruiting Daily Advisor, is a business journalist specializing in employment issues. She is the author of more than 1,000 articles on a wide range of human resource and career topics, with an emphasis on recruiting and hiring. Her articles have been featured in many global and domestic publications and information outlets, referenced in academic and legal publications as well as books, and translated into several languages.|