Shareholder Engagement Update: Silicon Valley vs. Wall Street

Unlike Silicon Valley, Wall Street is not charging forward on gender equity. 2017 marks the first year Wall Street faces a fearless girl.  But it won’t be the last.


On International Women’s Day a “Fearless Girl” statue was placed in front of Wall Street’s iconic “Charging Bull.”  And for good reason.  Wall Street, like Silicon Valley, is a tough place for women—a fact that is slow to change and carries material repercussions.


For one, women leave the field in record numbers, placing companies at a distinct disadvantage. In fact, women are 20% to 30% more likely to leave finance careers than careers in any other industry.  This inability to retain top talent has created a gaping female leadership gap.  And that gap hurts returns.  Gender diverse leadership teams are key to improved profit and stock price performance. Despite this, Wall Street boasts the deepest gender pay gap in the country—paying female financial advisors a mere 61 cents for every dollar a male advisor earns.


But given our success promoting gender pay equity in the “boys club” that is Silicon Valley, we thought we should turn our attention east. Regrettably, the response has not been encouraging.  Unlike Silicon Valley, Wall Street is not charging forward on gender equity.


As a point of contrast, 2016 marked the year Arjuna successfully pressed seven out of nine of the world’s largest tech companies to publish their gender pay gaps and commit to close them. Think Apple and Amazon, Microsoft and Expedia.  In the end, only two companies refused to be transparent and accountable to their investors—Google and Facebook.  And while Google is now being investigated by the Department of Labor for “extreme” gender pay disparity, shareholders will have a second chance to weigh in on the issue.  At the companies’ annual meetings this June, our clients’ gender pay equity proposals will go to a vote for the second time.


Similarly, shareholders of six of the world’s largest banks and credit card companies will also make their voices heard.  Starting in April, our clients’ gender pay equity proposals will go to a vote of at the annual meetings of Wells Fargo, Citibank, Bank of America, JP Morgan, American Express, and Mastercard.  We expect strong support and a fair amount of attention.  Already our engagements on Wall Street have been reported globally.  This exposure is essential, as it creates public pressure for change.


And while Wall Street’s reluctance is disappointing, it is not surprising.  Change takes time.  When we filed a first-of-its-kind gender pay equity proposal with eBay in 2015, the board opposed it outright, and it garnered only 8% of the shareholder vote.  Yet, as we expanded the campaign and peer company after peer company committed to fair pay, investors began to view it as a competitive issue—one keeping Big Tech companies from attracting and retaining top female talent.  As such, the second eBay proposal garnered 51% of the shareholder vote in 2016. And the CEO committed to fix the problem that very day.


2017 marks the first year Wall Street faces a fearless girl.  But it won’t be the last.


Natasha Lamb, Director of Equity Research & Shareholder Engagement

The opinions expressed herein are those of Arjuna Capital, LLC (“Arjuna Capital”) and are subject to change without notice. This material is not financial advice or an offer to sell any product. Arjuna Capital reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. Arjuna Capital uses Institutional Shareholder Services (ISS) to vote proxies on behalf of its clients. Arjuna Capital is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Arjuna Capital including our investment strategies, fees, and objectives can be found in our ADV Part 2, which is available upon request.


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