In response to pressure from activist investors, Citigroup recently conducted a pay survey of its workforce in the US, UK, and Germany, which found very small (1%) pay gaps based on gender and race. In response to these findings, the company announced on Monday that it would adjust salaries to close these gaps, becoming the first major US financial institution to do so, Reuters reports:
On average, Citi found, women and minorities are paid 99 percent of what men and non-minorities are paid, respectively. Compensation would be raised based on the pay gaps identified in the survey, Citi spokeswoman Jennifer Lowney said. …
[Activist investor Arjuna Capital] asked Citi’s shareholders last year to vote in favor of a proposal requiring the bank to address the gender pay gap. But on Monday, Arjuna withdrew that proposal, saying that Citi’s announcement represented a major shift for U.S. banks and credit card companies.
Arjuna Capital, the activist arm of investment firm Baldwin Brothers Inc, has been using shareholder resolutions to push for action to address gender pay gaps at a number of large US companies, including other big names in finance and tech. Last year, Arjuna succeeded at pressuring Amazon into conducting a pay gap study, which found that women earned 99.9 cents for every dollar that men earned in the same jobs.
As some observers noted at the time, however, Amazon’s role-to-role pay equity doesn’t change the fact that women make up a minority of its workforce and only a quarter of its management team, meaning that in the aggregate, men are earning much more money than women at Amazon. Unfortunately, these group-to-group gaps based on factors like role, seniority, and experience are much harder to close than role-to-role gaps, as they can’t be addressed with pay adjustments alone.
As for Citigroup, the Financial Times found last year that women make up 51 percent of the bank’s global workforce, 42 percent of mid-level executives, and 43 percent of senior executives. Those figures for women in leadership were high among the 35 financial institutions the newspaper looked at, where women held just 25.5 percent of senior roles overall. Citi will soon publish more detailed information about its gender pay gap in the UK, in accordance with the law enacted last year requiring all large employers to do so.