Big banks are vocal supporters of women in leadership, but are they paying women in top jobs as much as they are paying men who hold similar positions?
It is hard to know because, so far, big banks have been reluctant to disclose data on gender pay within their organizations. Earlier this year, the Boston investment firm Arjuna Capital filed shareholder resolutions with the nation’s four largest banks — JPMorgan Chase, Bank of America, Citigroup and Wells Fargo — asking them to disclose data on the difference in pay between male and female employees, but all four opposed the measures and shareholders handily defeated them.
Nonetheless, the push for more disclosure on gender pay is likely to gain momentum in the coming year.
Under a new rule in the U.K., companies with operations in the country — including big U.S. banks —will be required in 2018 to disclose data on the gaps in pay between men and women. Prime Minister Theresa May has been a champion for equal pay and has argued that such disclosures are needed to hold companies accountable.
“The gender pay gap isn’t going to close on its own,” May told Bloomberg News in October. “We need to see a real step-change in the number of companies publishing their gender pay data and offering progression and flexibility for all employees.”
Additionally, the rise of the #MeToo movement has put a spotlight on women’s issues in the workplace, following widespread revelations of sexual harassment. That could put more pressure on banks to address concerns about equal compensation, according to Natasha Lamb, managing director at Arjuna.
“I think there’s more of a call to action, given what’s happening in the U.K., and given what’s happening with women in this country,” Lamb said in a recent interview. “I think women in this country are saying, ‘We have had enough.’ Women are voicing their concerns, and they are being heard.”
JPMorgan, Citi, B of A and Wells declined to comment for the story.
But in their 2017 proxy statements, the companies took issue with the premise that a simple percentage comparison reflects the scope of their efforts to create an equitable workplace.
Several noted that they have controls in place to ensure that employees of equal rank and experience receive equal pay. Others pointed to various internal programs that encourage gender diversity and the promotion of women across job functions.
Plus, for big companies, preparing extensive reports on compensation by gender would be expensive and time-consuming, banks said. Arjuna, for example, asked banks to release the percentage pay gap between men and women, broken down by race and ethnicity, and by base, bonus and equity compensation.
Describing Arjuna’s request as “overly prescriptive,” JPMorgan Chase wrote in its proxy that a report on gender pay would “not reflect the extent of our efforts” to create a diverse workplace.
Arjuna has refiled its resolution at all four megabanks and has put forth a similar proposal at Bank of New York Mellon. Glass Lewis, the proxy advisory firm, has recommended that investors vote in favor of Arjuna’s resolutions.
Arjuna has notched some victories outside of banking, most notably at eBay, which backed Arjuna’s gender-pay proposal last year.
But wining a majority vote isn’t the only way for Arjuna to score a win. The firm has recently withdrawn its resolutions filed with Costco, Amazon and Microsoft after the companies agreed during behind-the-scenes negotiations to publish reports on pay equity, and status of women in the workplace. According to data provided by the firm, it has also withdrawn its resolutions at a number of other marquee names — including Nike, Apple and Expedia — after securing commitments from the companies to publish reports.
Given that some of the biggest names in industry have agreed to publish their data or are outlining steps they are taking to close the gender pay gap, Lamb said it is surprising that banks have not been more forthcoming.
“I think there is fear that the numbers aren’t going to look good,” Lamb said.
According to the Bureau of Labor Statistics, women with full-time jobs across the country, in all sectors, earned 82% of what men earned in 2016, slightly lower than a year earlier.
The bureau does not break down the data for the banking industry as a whole. Still, the list of occupations with the widest wage gaps includes several key positions in the banking industry. Among them: personal financial advisers, where women earn 59% of what men earn; and securities, commodities and financial services sales agents, who are paid 65% of what their male counterparts earn.
Still, experts say there there other ways to assess gender parity apart from publishing wage data, such as looking at opportunities that a company offers for career promotion, or counting how many women a company has on its board and executive committee.
“I suspect it isn’t a question of data availability,” said Darci Darnell, a partner at Bain who studies gender parity in financial services, discussing banks’ reluctance to publish data on compensation. “The biggest evidence of [a company’s commitment to diversity] is that you have more women in senior roles.”
In the months ahead, Arjuna expects to have “productive dialogues” with the big banks on its gender-pay resolutions, according to Lamb.
Lamb also said she looks forward to seeing the gender-pay reports filed by financial institutions with operations in the U.K. Those reports are due in April.