In Arjuna Capital and Proxy Impact’s 6th annual “Racial and Gender Pay Scorecard” to mark Equal Pay Day. Apple received a “B” grade on the report.
Of the 68 companies examined, 13 — Target, Starbucks, Mastercard, Microsoft, Pfizer, Bank of New York Mellon, Citigroup, Adobe, American Express, Visa, Lowe’s, Best Buy, and Home Depot — receive an “A,” while 25 companies receive an “F.” Target is the first company in the history of the scorecard to earn a perfect score — A+.
The grades are based on quantitative disclosures (versus qualitative assurances). The 68 companies in the ranking have all been engaged by investors through shareholder proposals and asked to improve their pay equity disclosures.
In addition to Apple, other companies receiving a “B” score are: thermo Fisher, Chipotle, Nike, Progressive Insurance, Key Corp., McDonald’s, Wells Fargo, Amalgamated Bank, Marsh & McLennan, Bank of American, Verizon Communication, and the Walt Disney Company.
Target receives the 1st perfect score of A+ on the “Racial and Gender Pay Scorecard,” with Starbucks close behind. Both companies report 100% racial and gender pay equity on both an adjusted and unadjusted median basis for 100% of their employee population, assessed on all components of compensation — base, bonus, and equity.
- Top of the class: 50% more companies earn a grade of “A” this year, with 13 companies receiving this score due to comprehensive racial and gender pay gap disclosures.
- Rising stars: 15 companies improve their scores year-over-year. Lowe’s and Best Buy saw the largest score increase from an F to a B, as they began disclosing comprehensive adjusted and unadjusted median racial and gender pay gaps.
- Falling behind: Intel’s (D) and Alphabet’s (F) scores fall for failing to disclose quantitative pay gaps or methodology within the last two years, despite commitments to investors. Four companies — Cigna, eBay, Intel, and Google — lose ground from last year.
- Failing to disclose: 25 companies earn a failing grade of “F” due to their lack of transparency, including Alphabet, Goldman Sachs, Marriott, Charles Schwab, and Walmart. Eighteen of these companies — remain on the failing list from last year.
- Leading Sector: Consumer companies lead the way on pay gap disclosures, with the sector comprising 38% of companies awarded an “A” score. Five consumer companies — Target, Starbucks, Lowe’s, Best Buy, and Home Depot — report median pay gaps. According to PayScale, 58% of retail and customer service companies plan to conduct a race or gender pay equity analysis in 2023.
- Lagging Sector: The healthcare sector lags behind, with only Pfizer disclosing median pay gaps and Thermo Fisher committing to disclose median gaps this year. The healthcare industry is reported to have the third widest pay gap across 15 industries.
- Median Pay Disclosure Gaining Momentum: While many companies only disclosed statistically adjusted pay gaps in the past, more and more companies are disclosing unadjusted median racial and gender pay gaps beyond their U.K. data, which is mandated. Of the 68 companies covered by the scorecard, 18 companies currently disclose or have committed to disclose in the next year. This includes: Target, Starbucks, Lowe’s, Best Buy, Home Depot, Chipotle, Mastercard, Bank of New York Mellon, Citigroup, American Express, Pfizer, Microsoft, Adobe, Visa, Disney, Amalgamated, BlackRock, and Thermo Fisher.
- 158 Investor Proposals: Over the last nine years, 158 shareholder proposals requesting pay gap disclosures have been filed at more than 90 companies (including the 68 in the scorecard).
The “Racial and Gender Pay Scorecard” assesses companies’ pay equity data against best-practice pay equity reporting standards, which consist of two important elements: (1) unadjusted median pay gaps, assessing how jobs are distributed by race and gender and which groups hold the high-paying jobs, and (2) statistically adjusted gaps, assessing pay between minorities and non-minorities, men and women, performing similar roles.
Arjuna Capital is an investment service. a private firm that consults with left-leaning organizations on how to conduct shareholder proxy vote campaigns.
