On Tuesday, a week or so after Equal Pay Day, shareholders at Citigroup (NYSE:C) voted on whether they think the company should disclose the disparity in pay levels between its male and female employees. Fewer than 5% voted to support the disclosure.
In stark contrast, two weeks ago, Microsoft (NASDAQ:MSFT) joined the ranks of Amazon (NASDAQ:AMZN) (grudgingly), Apple (NASDAQ:AAPL), Expedia (NASDAQ:EXPE) and Intel (NASDAQ:INTC) in publishing its virtually non-existent gender pay gaps. These companies are clearly on the side of Bernie Sanders and Hillary Clinton, who both voted for the Paycheck Fairness Act and have made the issue of gender pay parity part of their policy promises.
Not that these companies made the decision to publish these figures on their own, as they were encouraged to do so by activist investors such as Arjuna Capital and Pax World Funds, which filed shareholder resolutions requesting the information at nine technology companies this year. Five of them - those listed above - have agreed to publish or have already published their gender pay gap figures, and Arjuna withdrew the resolutions. Now, the pressure is on at Facebook (NASDAQ:FB), Adobe (NASDAQ:ADBE), Google (GOOG, GOOGL) and eBay (NASDAQ:EBAY) , the remaining companies facing resolutions.
Said Arjuna Capital in a press release following the Microsoft announcement:
The Microsoft action is particularly noteworthy in the context of the October 2014 comments made by CEO Satya Nadella. He said: 'It's not really about asking for the raise but knowing and having faith that the system will actually give you the right raises as you go along … And that I think might be one of the additional super powers that, quite frankly, women who don't ask for a raise have. Because that's good karma. It'll come back, because somebody is going to know that is the kind of person that I want to trust.' He later apologized for those comments.
Natasha Lamb, director of equity research and shareholder engagement at Arjuna Capital, added:
With Microsoft, we have now seen more than half of the companies we have engaged in our gender pay equity campaign respond proactively. Microsoft deserves credit for taking this important step and further distancing itself from the 2014 comments of its CEO, when he suggested it's bad karma for women to ask for a raise and that they should have faith in the "system." We are now down to only a handful of tech giants, including Facebook, that have been slow to be transparent in their commitment to equal pay.
The story at Citigroup is as far from Silicon Valley as its headquarters is geographically. First, the company unsuccessfully challenged a similar shareholder resolution filed by Trillium Investments calling for it to disclose its gender pay gap figures, asking the SEC to have the proposal removed from its proxy statements so its shareholders couldn't vote on it. But the best way to get the resolution off your proxy, as has been clearly demonstrated by Apple and Intel, for example, is to publish the figures... unless, of course, you have something to hide. While for the tech companies image counts for a great deal, and since their consumer base must be at least 50% women, that image can have significant effects on consumer attitudes. But surely, Citi's customer base must include a significant proportion of women, so its refusal to issue figures on this data is difficult to understand. Perhaps Citi's real cares and concerns lie with shareholders - who clearly are unconcerned - rather than with customers.
But why should shareholders, apart from activist shareholders, be concerned about equal pay for equal work? Because a fairly paid workforce is a motivated and committed workforce. And a motivated and committed workforce is one that has high levels of productivity and, though not a straight line consequence, higher levels of profitability and, potentially, long-term value growth. Sounds easy to understand.
So, Bernie and Hillary support equal pay for equal work, but what about the Republican candidates? Ted Cruz was one of the Republican senators who blocked the Paycheck Fairness Act, calling it a trial lawyers' bonanza and accusing Democrats of going for political show votes. There is nothing on his website about the issue, implying that either he doesn't think it's a problem (it is) or that he doesn't care, or both.
There is also nothing on Trump's website about the issue, but he has been quoted as saying variously: "If they do the same job, they should get the same pay," and "You're gonna make the same if you do as good a job." And then: "It's very hard to say what is the same job."
So with Trump, as with many other policy issues, you never know.
In the UK, on the other hand, the Brits have just passed a gender pay gap disclosure law on the assumption that if you get it out in the open, the problem will go away. Company by company, that is what is currently happening in the US, thanks to shareholders like Arjuna Capital.
Let's face it, legislating against gender pay disparity hasn't worked so far. The Equal Pay Act was signed into law in 1963. It's time to shine a light.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.