Reflecting a share classification system designed to heavily favor management, Alphabet shareholders voted last Wednesday (June 8) to turn down a resolution to close the gender pay gap, despite recommendations in favor of the proposal from top proxy advisory firms Institutional Shareholder Services and Glass Lewis. The vote was followed almost immediately by a sexist comment from a shareholder who posed a question to Ruth Porat as “the lady CFO.” As the vote (dominated by 60 percent management ownership) and tone of the meeting indicated, Alphabet has far to go before it can be said to be serious about gender parity.
Alphabet, the parent of search engine giant Google, is the seventh of nine tech giants at the focus of a gender pay equity shareholder movement that has gained considerable steam over the past few months. All nine resolutions have been advanced by Arjuna Capital, a division of Baldwin Brothers Inc., a registered investment advisor. Proxy Impact and The Sustainability Group co-filed the Alphabet proposal, which is available online at http://bit.ly/1Pj6Tnv.
Big pay gap
Natasha Lamb, director of equity research and shareholder engagement, at Arjuna Capital said:”Shareholders were told Wednesday by Alphabet to trust management on the issue of gender parity. That glib ‘trust us’ mentality is simply not good enough when management controls the vote and then uses that control to reject transparent reporting on gender pay equity. Substituting real action with mere lip service shows a lack of accountability to investor owners at Alphabet.
“Among its peers, Alphabet has the largest reported pay gap ($25,104) in senior level engineering positions, according to a 2014 Glassdoor analysis. Failing to address pay inequity at the same level as other U.S. tech giants puts Alphabet at a competitive disadvantage attracting, retaining, moving top female talent into positions of leadership, and tapping into greater innovation. It’s bad for women, bad for the company, and bad for shareholders.”
On April 27, eBay became the sixth major U.S. tech company this year to respond to shareholder calls for pay equity, following a 51% shareholder vote. Already this year, Arjuna Capital has announced success in its shareholder engagements at six of nine companies it has engaged: Intel (February 3rd), Apple (March 2nd), Amazon (March 23rd), Expedia (March 24th), Microsoft (April 11th) and eBay (April 27th), all of which reported the gender pay gap is closed, near closed, or will be closed shortly.
Shareholders will vote on a gender pay proposal at Facebook on June 20.
On a national level, women, who are paid an average of 78 cents for every dollar men earn, will not reach pay parity until 2058. In the technology industry, which struggles to recruit and retain a diverse workforce, recruiting firm Dice reports men earned nearly $10,000 dollars more than women on average in 2014. – PRNewswire