BankThink

Gender pay gap is 'a challenge we need to tackle together'

Register now

You are what you measure.

Problem solving can’t start without an honest assessment of where you are.

Transparency breeds accountability.

Those were just a few of the motivations behind Citi’s decision earlier this year to be transparent about a statistic I’ve described as “disappointing” and “ugly”: Citi’s unadjusted or “raw” pay gap for women and U.S. minorities.

Our analysis showed that at Citi, the median pay for women globally is 71% of the median for men; and that the median pay for U.S. minorities is 93% of the median for nonminorities.

For us, the data reaffirmed the importance of the goals we announced last year to increase our representation of women and U.S. minorities in senior and higher-paying roles at Citi. We know that is the only effective way for us to meaningfully reduce our raw pay gap over time.

That disclosure prompted some expected — and justified — measure of criticism. Despite our clear motivations, our commitment to progress and a willingness to be transparent and held accountable, we did have concerns about taking this step. I’m sure those concerns exist at other companies. Let me offer my perspective on a few.

People will confuse the raw gap — really a measure of a representation problem — with our pay equity review.

We conducted a pay equity review of our male and female colleagues globally, accounting for a number of factors to make the comparisons meaningful, including job function, level and geography. On an adjusted basis, we found that women globally are paid on average 99% of what men are paid, and we took steps to close that gap.

We then went one step further and released our unadjusted or “raw” pay gap for women and U.S. minorities — which measures the difference in median total compensation when we don’t adjust for any factors.

Yes, confusion occurred, but not nearly to the extent feared. The conversations around pay equity, internally and externally, are more robust and informed, and most people get the distinction. For those who don’t, we get an opportunity to explain the difference. And explain again, if necessary. The fact is that both numbers are important, but for different reasons, because they tell us different things.

See the latest Most Powerful Women rankings:

We will be criticized for not making progress fast enough.

Probably. That said, I think most understand that change of this nature takes time.

We’re tackling this challenge from many angles, but we know we don’t have all the answers and that change won’t come overnight. We’ll report on our progress, and I fully anticipate my colleagues and those outside the company will keep the heat on us. We welcome that.

Female colleagues will be disillusioned.

Well, to say they don’t like the numbers any more than I do would be an understatement.

But let’s be honest — they’ve been coming to work every day knowing full well that this representation gap exists not just at Citi but across our industry and our society, in the U.S. and globally.

What I’ve heard from women at Citi is that they appreciate the commitment our disclosure signals, they are proud of Citi’s role in driving this conversation, and they are committed to supporting our progress. This disclosure also comes up regularly with recruits, who are well versed in the challenges our industry faces with respect to gender equality.

I firmly believe this decision was the right step at the right time, because it has spurred a broader and deeper conversation around pay equity and representation. Our willingness to be transparent and hold ourselves accountable for making progress built credibility for Citi. It affirmed our commitment to be a bold champion of gender equality inside the firm and out.

I know that an intensified emphasis on building a culture of diversity and inclusion in the workplace certainly isn’t unique to Citi, nor is it new across the private sector. We aren’t the only ones trying to create change. We will share our ideas and experiences on what’s working and what’s not, and hope others will too. This is a challenge we need to tackle together as an industry. It’s about time.

Michael Corbat's BankThink post is part of our annual Women in Banking series, which also features Howard Bank Chairman and CEO Maryann Scully and the OCC's Maryann Kennedy.

In recognition of the steps it has taken to address the unadjusted gender pay gap and its leadership as the only large bank choosing to be transparent about the issue, Citi won a Top Team award as part of the 2019 Most Powerful Women program.

For reprint and licensing requests for this article, click here.
Diversity and equality Corporate governance Equal pay Compensation Michael Corbat Citigroup Women in Banking
MORE FROM AMERICAN BANKER