Gender Pay Gap Proposals Shaping Up to Be 2017’s Shareholder Proposal Initiative
April 8, 2017
After multiple years featuring proxy access proposals, the New York City Comptroller’s Office is shifting gears for the 2017 proxy season, announcing this week that it will launch a campaign targeting U.S. financial companies with gender pay gap shareholder proposals. In explaining the settlements, New York City Comptroller Scott Stringer, who oversees the $170 billion-dollar public pension fund, told the Financial Times, "if companies refuse to be open and honest – if they ignore investors’ concerns – we have to take a stand.” Further, Mr. Stringer noted that the issue “is not just about fairness. It’s about good management. There is no excuse for companies to hide this information.” As part of the initiative, Mr. Stringer plans to file proposals at major U.S. financial institutions, including Citigroup, Wells Fargo, and Bank of America. More interestingly, however, is that fact that the Comptroller already announced it has negotiated an agreement with six companies which will require them to make varying levels of gender pay equity proposals including AIG and Aflac. Pursuant to these settlements, companies have agreed to release information on how employee salaries are reviewed to ensure women and men are paid equally. Insurance company Aflac has even agreed to disclose its female to male salary ratio. In two of the settlements, the information will be included alongside the organizations Corporate Social Responsibility report - linking it to other ESG initiatives.
The Comptroller noted that several companies refused to negotiate and that shareholders at these companies will be voting on the proposals. In 2016, five S&P 500 companies voted on gender pay gap proposals. A proposal at eBay garnered nearly 45% support, however, the other four proposals averaged less than 8.5% support. The proposal at Citigroup will be one to watch this year. The company held a vote last year on a similar proposal, albeit by a different proponent, but it received less than 6% shareholder support.