Gender Pay Equity: The Showdown Begins

TL;DR: Amazon’s resistance to address gender pay gap further hurts the company’s reputation as peers start to comply with pay parity disclosure rules.

 

Amazon founder Jeff Bezos (Photo: Fortune)

 

On 17 March, the SEC ruled that (NASDAQ: AMZN) in the online retailer’s appeal to keep a shareholder resolution to close the gender pay gap off the ballot in the coming proxy season. The shareholder resolution, co-filed by Arjuna Capital and Baldwin Brothers, called on seven tech companies to disclose policies and goals to reduce the gender pay gap. You will recall that President Obama signed on 29 January new rules for companies with more than 100 employees to disclose salaries broken down by gender, race and ethnicity.

Amazon’s First Round Loss 

The SEC decision implies that Amazon will have to allow for a vote to pass on the resolution on its AGM, further raising the profile of gender pay gap. I would be curious to see how much effort Amazon would spend to generate no votes, and how much yes votes it would end up getting especially that some of its peers in the tech industry, such as Intel and Apple, have reported considerable investment in achieving gender equity in salaries.

In any case, Amazon’s resistance to this shareholder proposal makes the online retailer look bad. Amazon is already facing serious allegations of poor working conditions in its warehouses as well as in its corporate offices, allegations that CEO Jeff Besos denies. Whether he likes it or not, Amazon is increasingly looking like the Wal-mart of the tech industry on labor issues. By resisting the shareholder proposal, Amazon only reinforces an unflattering image of a hard-nosed employer and makes one suspect that it may, indeed, have something to hide.

Intel, Apple Escapes Vote, but GoDaddy Wins Big 

Arjuna Capital withdrew shareholder resolutions filed  with Intel and Apple, after both companies confirmed disclosure of gender pay gap policies and achievement.

Intel reported in its 2015 Diversity and Inclusion report that it achieved a net result of 100% pay equity. The company committed to comply with new regulations and include US ethnicities in its enhanced audits. The disclosure is commendable but not supported by details. Let’s see if Intel pushes the bar higher by disclosing salary ranges per gender and ethnicity in 2016.

Meanwhile, Apple told Arjuna Capital and its co-filers that it had achieved 99.6% gender pay equity (excluding bonuses and stock). Apple had initially sought for exclusion of the resolution but eventually engaged with Arjuna, leading to the withdrawal of the shareholder action. Had Apple continued to resist, it might have faced the same fate as Amazon.

GoDaddy.com, a web-hosting company, has gone two steps further by disclosing the results of its annual gender pay survey and reported that pay equity is near parity. The company has five commitments including transparency over its gender pay audits and regularly reviewing hiring and promotion practices.

Salesforce similarly conducted a review of the salaries of its workforce in 2015, and committed to spending $3 billion to close the gender pay gap. More on Salesforce’s commitments here.

Behind Every Man is a Fairly Paid Woman

Gender pay parity is important to boost a company’s intangibles: productivity, employee loyalty and motivation, and retention. Competition for talent is tough in the tech world and obviously, ping-pong tables and free snacks are no longer enough to hire and retain talent. Companies need to focus on the substantive benefits, and fair wages regardless of gender and race is as substantive as benefits can get.

So if smaller companies such as GoDaddy.com can do it, why not a tech behemoth like Amazon?

 

 

 

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