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US banks' #MeToo moment: Shareholders seek data on diversity, women's pay

The subject is also gaining attention as investors poured $4.7 billion last year into funds that evaluate companies on social criteria

metoo, #metoo, sexual harassment

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The #MeToo movement has put new momentum behind efforts to have companies, especially in finance, disclose details about their workforce diversity - data that could throw into sharper relief the slow pace of progress for women and minorities in the field.
Shareholder activists and corporate governance experts say they expect more support for disclosures such as the share of women and minorities in the senior ranks, or how equally they are paid.
Activists including Trillium Asset Management, Arjuna Capital and Calvert Research and Management are focussed especially on banks and financial firms where women often make up a large share of the workforce, but not in leadership.
The subject is also gaining attention as investors poured $4.7 billion last year into funds that evaluate companies on social criteria.
Jonas Kron, senior vice president of Trillium Asset Management, said the emergence of the #MeToo movement likely helped boost support to 51 per cent of votes cast in December for a shareholder proposal his firm sponsored calling for a diversity report at Palo Alto Networks Inc.
Counting abstentions, the measure was not approved, according to Palo Alto filings. Palo Alto Networks declined to comment.
Interest in the resolutions, Kron said, "Crested at the end of the year with the MeToo tidal wave, and I think it's carrying through" into the 2018 spring proxy season.
Last spring similar resolutions got around 30 percent support of votes cast, like one at First Republic Bank that got 33 percent support and which Trillium has refiled for this year.
A bank spokesman declined to comment on Trillium's resolution. He said of the bank's top 58 executives, more than half are women.
Executives across all industries are taking stock of an ongoing national debate on sexual harassment driven by what is known as the "#MeToo movement" on social media. Dozens of powerful men in politics, entertainment and business have been fired or resigned in the face of allegations they abused their power.
The U.S. Government Accountability Office said in November that while the representation of women and minorities in most parts of finance rose from 2007 to 2015, the gains were not even. Most American companies with more than 100 employees file a federal form tallying their employees by race and gender across all job categories. Though not required to make the data public, technology leaders and a number of top banks have done so or released detailed summaries including JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp and Wells Fargo & Co.
The figures do not always show progress. JPMorgan said women accounted for 24.7 per cent of its top ranks in 2016, versus 25.8 percent in 2015.
Asked about the figures, JPMorgan spokesman Andrew Gray said women make up nearly half the bank's 11-member operating committee and half of the direct reports of CEO Jamie Dimon. Gray said that "we strive every day to foster diversity and a workplace environment of respect and trust."
Even if change is slow, investors and recruiters say the details can be useful as a measure of a company's concerns.
"You are going to see more and more investors wanting to screen out those companies" that can't show a diverse workforce, said Victoria Fernandez, managing director at Crossmark Global Investments.
Although they have released diversity data, the major banks so far have not released detailed breakdowns of how women and minorities are paid within job categories.
Under pressure from Arjuna shareholder proposals, Citigroup and Bank of America each said this month that on average they pay women 99 percent of what they pay men in the United States and in other countries.
Arjuna Managing Partner Natasha Lamb said she would still like to see the banks release pay measures broken down by job level. Arjuna is still seeking pay ratio details from other banks this spring including Wells Fargo.
One goal is to show investors and job seekers whether women are being paid equally as they are promoted, she said. "Compensation has been in a black box for decades," she said.
Representatives of Citigroup and Bank of America declined to discuss Arjuna's further request.
A Wells Fargo spokeswoman declined to comment on Arjuna's current effort but noted language in its proxy filing last year when it opposed a similar resolution from Arjuna as being unnecessary because among other things the bank reviews pay equity annually.
"We are committed to ensuring that we do not discriminate on the basis of gender in our compensation programs," the filing states.

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First Published: Jan 31 2018 | 7:42 AM IST

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